NEW YORK (CNNfn) - iVillage, a collection of Internet sites targeted to women, and on the verge of its initial public offering, stands accused of "inappropriate" accounting practices by a former chief financial officer, according to report published Wednesday.
The New York Times said Joanne O'Rourke Hindman, who joined the New York-based company as CFO in 1997, made the allegations in a sworn declaration that's part of a suit filed by a former iVillage employee. That employee, Todd Kenner, accuses iVillage of reneging on promised stock options.
According to the Times, Hindman testified that she told iVillage chief executive Candace Carpenter about her belief that the company was recognizing revenue prematurely. Shortly after that, Hindman said she was demoted to head of the company's Better Health unit, and then dismissed another two months later.
Hindman and another former iVillage employee, Steven Carter, have also accused the company of not delivering on stock-option promises, the Times said.
The suit was filed in Nashville, Tenn., where Kenner lived before moving to New York to work for iVillage. The Times said the declaration was filed in an unusual legal maneuver, with arguments still pending over whether the case should be heard in Tennessee or New York.
Both Kenner and Hindman are represented by the same attorney, Paul Yetter of Houston. Yetter wasn't immediately available for comment.
Officials for iVillage were also not immediately available for comment.
iVillage has filed with the Securities and Exchange Commission for an offering of 3,650,000 shares at an estimated price of $14 each. The offering, delayed for the past several weeks, is expected to be priced next week; investment bankers told the Times that they don't expect the suit to affect the pricing.
The Internet site operator bills itself as the "Women's Network." Among its affiliated sites are the Parent Soup and ParentsPlace parenting Web sites, as well as sites dedicated to food, fashion and working at home.
Late last year, NBC announced an investment in iVillage as part of a marketing agreement. Other companies invested in iVillage include America Online (AOL), the Tribune Company (TRB) and Tele-Communications Inc., which has been merged with AT&T (T).