ST. LOUIS –- In his wrongful-termination case, former Enterprise Rent-A-Car controller Thomas P. Dunn testified in March that the company fired him because he refused to carry out illegal accounting practices in preparation for a planned initial public offering.

The trial, held in a St. Louis County Circuit Court, is now in its third week. Earlier this week, Judge Jack Koehr denied Enterprise attorneys' request that the case be thrown out because Dunn failed to prove his case in testimony thus far.

Dunn, who is seeking a minimum of $5 million in damages from Enterprise, drew an annual salary of $650,000 when he was fired in January 2001.

In particular, Dunn last month testified he objected to senior management's request to use an excessively high depreciation rate to calculate residual value of fleet cars. Those favoring the high depreciation rate, Dunn said, included Enterprise founder Jack Taylor and CEO Andrew Taylor. Dunn added he also opposed lumping used car sales in with rental car business in financial statements, according to court documents and trial accounts in The St. Louis Post-Dispatch.

Since Dunn filed his suit four months after his firing, Enterprise has repeatedly denied any wrongdoing. The company has said Dunn was fired solely because of complaints about his management style and behavior toward other employees. Dunn, 42, was with the company for 14-and-a-half years.

According to Post-Dispatch trial coverage, Dunn testified that by using a depreciation rate exceeding historical averages, Enterprise could generate millions of dollars in paper gains. This extra dollar value, he said, could be manipulated to make the company's financial performance appear more stable in financial reports.

Dunn also said he pointed out to management that if Enterprise went public, its financial statements needed to disclose gross -- not just net -- used car sales. What's more, Dunn accused Enterprise of labeling part of its rental fees as a surcharge, even though the charge wasn't government-imposed, and of selectively licensing cars in states with lower licensing fees rather than in the states where the cars would be based.

In 1999 and 2000, Dunn said, Enterprise considered a number of IPO strategies, including selling shares representing 20% of the company to outside investors for $1 billion. That would have left the Taylor family and a small group of senior managers holding the remaining 80% of the company, valued at $4 billion. Plans for an IPO, however, were eventually scrapped, with the company citing poor market conditions.

During cross-examination by Enterprise attorneys, the Post-Dispatch reported, Dunn testified that he never violated any laws at Enterprise and never signed any false financial statements. Dunn also acknowledged that he never filed complaints with any government agency, and never expressed his concerns in detail with outside accountants, attorneys or investment bankers involved in the IPO project.

Dunn also testified that outside accountants hired by Enterprise, Steven Brackney of Ernst & Young and Byron Trott of Goldman Sachs & Co., worked with him on the IPO and shared many of his concerns about the company's accounting practices. But Brackney, who eventually replaced Dunn at Enterprise, testified that Enterprise expressed a willingness to change accounting practices if the company went public.

According to the Post-Dispatch, Brackney testified that Enterprise Chief Financial Officer John O'Connell assured him that the company would lower depreciation rates and change its way of reporting used car sales in the event of going public. What's more, Brackney said, O'Connell agreed to report rental, leasing and used car sales revenue and earnings separately in financial statements upon issuing an IPO. Dunn had testified earlier that O'Connell and Andrew Taylor were vehemently opposed to making such accounting adjustments.

Earlier this week, testimony by some of Dunn's former staff members supported the company's claims that Dunn's management style had alienated other employees.

Former employees Clint Barr and David Byrd both testified they left the corporate accounting department because Dunn's approach to managing his staff created an uncomfortable work environment and hindered chances for their advancement. Barr transferred out of Dunn's department in 1996 and eventually left the company in 1998.

Byrd, who left Dunn's department in 1997, described Dunn as an opinionated micro-manager.

Steve Kluesner, an assistant vice president in the company's accounting department, testified that Dunn often criticized other employees and clashed with other department heads. Kluesner said that in 1999, he complained about Dunn in a memo to O'Connell and asked for a transfer.