• by Paul Gough , March 5, 2004

Martha Stewart Friday afternoon vowed to appeal a jury's verdict that she made false statements and obstructed justice in connection with the sale of ImClone stock in 2001.

"I will appeal the verdict and continue the fight to clear my name," Stewart wrote in a statement posted on her Web site (www.marthatalks.com) less than an hour after the verdict was announced. "I believe in the fairness of the judicial system and remain confident that I will ultimately prevail."

Stewart was convicted of four charges and her former broker, Peter E. Bacanovic, was found guilty of four of five charges in U.S. District Court in lower Manhattan. She faces up to 20 years in prison and Bacanovic faces up to 25 years, though both could be sentenced to as little as a year in prison under federal sentencing guidelines.

Stock in Stewart's company, Martha Stewart Living Omnimedia, rose more than $2 a share in mid-afternoon after TV reports said a verdict had been reached but without further details. The New York Stock Exchange stopped trading for a time when the verdict was announced but soon resumed. The stock, which had been trading as high as $17, a 52-week high, opened the day at $13.70. It fell $3.17 a share to $10.86 by the time the market closed at 4 p.m.

On Thursday afternoon, Martha Stewart Living Omnimedia told investors and reporters it had a contingency plan for the verdict, regardless of the verdict. Executives wouldn't say what the plans were but said it would take a while to implement even if the outcome was positive. In a statement released soon after Friday's verdict, the company once again declined to identify specifics.

"Our board of directors will meet promptly to carefully evaluate the current situation and take actions as appropriate. In the meantime, we are confident that our assets -- our senior management team, our talented employees, our quality brand labels, our omni business model and infrastructure, and our financial strength reflecting $169 million cash in the bank and no debt -- are more than sufficient to continue MSO's development as a leading 'how to' brand-building company."

Stewart founded the company, which publishes Martha Stewart Living and other titles, produces her television show and licenses with Kmart for the Martha Stewart brand of home products. She resigned her position as chairman when she was indicted but remained on the board and was the company's chief creative officer. The Securities and Exchange Commission could have a say about that, forcing her to resign or be fired from either or both positions.

"The company believes, in spite of this disappointment, it is important to recognize the significant contributions that Martha has made to advancing the domestic arts and improving the quality of life in and around our homes," the statement said.

Stewart will be sentenced June 17.