It’s no secret that housing prices in places like Riverside County, Ca. have fallen sharply, in part due to a wave of foreclosures that at least according to this article has one out of every eight homeowners facing foreclosure. Indeed, the county is working hard to avoid more foreclosures.
Still, the 8K that Circor (CIR) filed yesterday, which was brought to our attention by the folks at Equilar still seems a bit surprising. In the filing, Circor says it will spend over $500K to bail out executive Christopher Celtruda, whose home in Corona, Ca. is seriously underwater. Here’s a snippet from the filing:
Due to market conditions beyond his control, the value of Mr. Celtruda’s residence in Corona, California has diminished approximately 50% since it was purchased by Mr. Celtruda at the time of his relocation. At the same time, market conditions have prevented Mr. Celtruda from successfully selling his family home in Phoenix, Arizona. Under the Agreement, the Company has agreed to purchase Mr. Celtruda’s home in Corona, California at its current fair market value and to make payment on Mr. Celtruda’s behalf of an additional approximately $488,000 to payoff the outstanding mortgage on the Corona property. The Agreement also provides for the Company to pay such amounts to Mr. Celtruda as are necessary to cover all federal and state income taxes pertinent to this transaction on a grossed-up basis.
As surprising as the filing is, you just have to wonder how many other companies are taking similar steps, but not disclosing them in an 8K or some other filing, because they don’t judge it to be material. A quick skim of filings doesn’t turn up lots of other examples, yet this has to be happening to other executives at other companies. Any suggestions for finding more of these, even if they’re not material?
Image: Vikte Kukis