Here's a great story about one of my favorite corporate governance outhouses, Reddy Ice (NYSE: FRZ).

Yesterday, the company announced that it had hired a new chief operating officer. Then, in a stunning display of corporate spin, the company buried this bombshell at the bottom of the 8-K disclosing the new COO:

Effective September 13, 2008, Ben D. Key, the Company's Executive Vice President - Sales & Marketing, has been placed on a paid leave of absence and relieved of his duties at the direction of the Special Committee of the Company's Board of Directors (the "Committee"). The Committee found that Mr. Key has likely violated Company policies and is associated with matters that are under investigation. The Committee's investigation is ongoing and no conclusions have been reached that any illegal conduct occurred. Further action may be taken by the Committee prior to or following the conclusion of its investigation.

That'll teach him! Violate company policies? You're going on a paid vacation! The move is believed to be related to an investigation by federal prosecutors and attorneys general in 19 states into alleged price fixing. The company also announced that it was suspending its dividend, and the stock closed down nearly 14% on Monday.

Obviously that's a lot of bad news for one day but what's most troubling to me is the company's efforts to bury bad news in regulatory filings.

MOST NOTEWORTHY: U.S. Auto Parts, DealerTrack and AspenBio Pharma were today's noteworthy downgrades:

• Piper downgraded shares of U.S. Auto Parts (NASDAQ: PRTS) to Neutral from Buy following the company's Q4 results.
  
• JMP Securities cut DealerTrack (NASDAQ: TRAK) to Market Perform from Strong Buy as they believe future market share losses to RouteOne are more significant than previously believed.
  
• Oppenheimer has concerns that most of AspenBio Pharma's (NASDAQ: APPY) market value is tied to the AppyScore test for appendicitis, while available clinical data may not be sufficient to drive adoption. The firm lowered APPY to Perform from Outperform.

OTHER DOWNGRADES:

• Wachovia cut Reddy Ice (NYSE: FRZ) to Market Perform from Outperform.
  
• Deutsche Bank lowered its rating on Valspar (NYSE: VAL) and Airgas (NYSE: ARG) to Hold from Buy.
  
• Goldman downgraded Orbitz Worldwide (NYSE: OWW) to Neutral from Buy.

Back in early July, Reddy Ice Holdings Inc. (NYSE: FRZ) announced a $1.1 billion going-private transaction with GSO Capital Partners. Reddy is a manufacturer and distributor of packaged ice, serving about 82,000 locations in 31 states.

However, because of adverse weather, especially in Texas and Oklahoma, the company has experienced some softness in its results.

Well, an activist fund, Shamrock, is not convinced and thinks the price tag is "grossly inadequate." In fact, the firm plans to vote "no" on the deal.

Shamrock thinks Reddy is worth about $42 to $44 per share. Keep in mind that the current buyout offer is $31.25.

Reddy Ice (NYSE: FRZ) distributes about 1.9 million tons of ice every year. According to the company: "Wherever there is a need for ice, from the picnic cooler to the wedding ice sculpture; from major league sports events to fishing fleets; from holiday parties to areas affected by disaster, Reddy Ice has ice products to fill the need."

But it will now do so as a private company. This week, Reddy Ice agreed to a $1.1 billion buyout. The suitor is GSO Capital Partners and the debt financing will come from Morgan Stanley (NYSE: MS).

Reddy Ice also provided revised guidance for 2007. Basically, the terrible weather is having an adverse impact on the company – such as in Texas and Oklahoma.

The company expects revenue of $350-$360 million and net income of $16.3-$20.4 million. As for adjusted EBITDA, it is forecasted at $90-$95 million.

On the news of the deal, the stock price increased 6.86% to $30.48. The buyout price is $31.25 per share.

Tom Taulli is the author of various books, including the Complete M&A Handbook and the EDGAR-Online Guide to Decoding Financial Statements.