NEW YORK -- Struggling online grocery chain Peapod Inc. is trying to determine if it can recover the $2.5 million it loaned its chief executive, who resigned suddenly in March, The Wall Street Journal reported in its online edition on Wednesday.
William Malloy was lured to the Skokie, Illinois-based company from AT&T Corp.'s (T) wireless business in September with a $2.5 million signing bonus plus a $2.5 million loan earmarked for the purchase of Peapod common stock. Under terms of the deal, the loan would become a gift after five years.
When Malloy, 47, resigned, citing health concerns, the unprofitable company lost a $120 million investment from four firms and its share price was halved.
Sources close to the company have said he was suffering from mental and physical exhaustion, the Journal reported. Malloy did not return calls from the Journal seeking comment.
The stock Malloy bought is now valued at about 25 percent less than he paid but company officials believe he may be liable for the full amount. The hitch is that terms of the loan made it forgivable if Malloy left the company "for a good reason," the Journal reported.
On Tuesday, Peapod (PPOD) closed up 9/16 at 3-1/4. Its 52-week high of 16-3/8 was set on Nov. 5.
