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CEO quits over topless club bill

St. Louis- Robert McCormick, Savvis Inc.’s chairman and chief executive, on Wednesday kissed his titles good-bye in the wake of an investigation into the $241,000 topless-club bill charged to his corporate American Express card. The disputed bill made him and Savvis the targets of a lawsuit and jokes.

In a statement, Savvis said its directors accepted McCormick’s resignation after the completion of an independent investigation conducted by its audit committee.

The company, which provides corporate networking services, said Jack Finlayson will continue as acting chief executive. Finlayson has served as Savvis’ president and chief operating officer and a director of the company since January 2000.

“The board has determined that it is in the best interest of the company to accept Mr. McCormick’s resignation,” said Clyde Heintzelman, head of the audit committee at the Town and Country-based company.Advertisement

Savvis didn’t say whether McCormick would receive any severance.

Heintzelman said Savvis’ audit committee conducted a thorough review of the matter and was confident that the board’s actions were “appropriate.”

Savvis had no further comment.

McCormick was paid $607,500 in salary and bonus last year. In September, the board approved a raise, boosting his salary to $550,000 and his target bonus to 75 percent of that amount, or $412,500.

McCormick, 40, of Clayton, had said previously through a lawyer for Savvis that he is the victim of fraud.

The scandal over the October 2003 bill became public last month, when American Express filed a lawsuit demanding payment from Savvis and McCormick in a New York state court. American Express said it conducted its own investigation before filing the lawsuit.

Shortly afterward, Savvis put McCormick on unpaid leave while it investigated the charges run up at the Scores strip club in Manhattan. Meanwhile, Savvis has been fighting the suit, arguing that the bill was not a business expense and that McCormick had planned to pay it personally.

Savvis said its investigation reconfirmed that McCormick didn’t submit the Scores charges to the company for reimbursement and that the company has made no payment to American Express related to the charges.

The tabloids in Manhattan have had a field day with the dispute, with the Daily News calling McCormick a “lap dunce” and the New York Post running the headline: “Biz Boob Busts Bank for Babes.”

Last week, Savvis filed papers seeking dismissal of the suit. Savvis included a letter written by its former chief legal counsel that showed he contacted both Scores and American Express challenging the bill on behalf of McCormick.

Savvis acknowledged in court papers that McCormick ran up a bill at Scores but said it should have been $18,000 to $19,000.

The letter stated that McCormick visited Scores with three business acquaintances and that he was offered a private room, was told the fee was $1,000 an hour and that dancers charged $400 an hour apiece.

It said that McCormick rented the room “for not more than six hours, during which time between four and six dancers were in the room with McCormick and his guests.” It also said he bought drinks for his group but that charges for $240,000 “clearly” were invalid.

In trading Wednesday, shares of Savvis gained 2 cents to close at 74 cents. They’re off 42 cents, or 36.2 percent, for the year.

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