Michael C. Gilliland: Sunflower Farmers Market CEO resigns after child prostitution bust

Big pic below.

As of last week, the worst PR Boulder-based Sunflower Farmers Market faced had to do with New Mexico employee Anthony Garcia allegedly putting semen into a customer's yogurt. But that's a minor hit compared to the resignation of company founder and CEO Michael C. Gilliland's following an arrest in Phoenix on suspicion of felony child prostitution.

The details come to us from the Arizona Republic, which reports that Gilliland was busted at a hotel, where he allegedly expected to meet an underage girl he encountered online. He was among eight suspected johns swept up in a week-long sting operation.

Gilliland has a home in Arizona, but he first made his business mark in Boulder with the 1987 founding of Wild Oats. He subsequently sold that company and launched Sunflower, whose corporate HQ remains in Boulder.

A Sunflower statement about Gilliland's resignation shares his assertion that he'll ultimately be cleared in the case. In the meantime, company execs will have to hope the chain will remain better known for "Serious Food... Silly Prices" than for the latest pair of headline-making incidents.

Look below to see the Sunflower press release and a larger version of Gilliland's mug shot:

PHOENIX, Feb. 12, 2011 -- Sunflower Farmers Market said today that its board of directors has named Chris S. Sherrell as Acting Chief Executive Officer, following the resignation of former chairman and CEO Michael C. Gilliland earlier today from his executive positions and from the company's board of directors.

Mr. Sherrell continues to hold his prior positions of President and chief operating officer. He has been with Sunflower Farmers Market since the company was formed in 2002.

Bennett Bertoli, a member of the board of directors from the company's outset, was elected chairman by the company's board.

"Sunflower appreciates the respect that Mr. Gilliland has shown for the company by his action, so that his personal affairs will not affect the company," Mr. Sherrell said.

Mr. Gilliland was arrested Thursday by Phoenix police on felony charges. He has informed the company that he believes he is not guilty of the charges brought against him, and that he expects to be exonerated.

The change in management will not affect the company's operations or its plans for continuing expansion, Mr. Sherrell said.

About Sunflower Farmers Market

Sunflower Farmers Market (http://www.sfmarkets.com) is a rapidly growing chain of full-service grocery stores offering consumers the highest quality of natural and organic products at the lowest possible price. The company, founded in 2002, is a pioneer in the emerging value segment of the natural and organic foods retail industry. The company has 32 retail stores located in Colorado, Arizona, New Mexico, Nevada, Utah and Texas.

Michael C. Gilliland.

More from our Follow That Story archive: "Sunflower Farmers Market keeps blooming."