The Limited’s real estate bailout…

September 11, 2007

images-11.jpegWhile the debate over whether the subprime mess is worthy of a bailout to protect the overall economy continues to dominate the news, it’s interesting to note that one small sub-sector of the economy doesn’t have to worry about this sort of thing: top executives at publicly traded companies. That’s because companies continue to bail executives out of their upside-down real estate deals.

Just take this agreement filed late yesterday by Limited Brands (LTD) which provides details on soon-to-be former COO Leonard Schlesigner’s housing arrangements. According to this article, Schlesinger is losing his job as part of the company’s efforts to cut costs, which of course, explains why Limited will plunk down around $3 million to buy Schlesinger’s home near Limited’s headquarters in New Albany.

While the company never spells out how much it expects the bailout to cost, it does provide an address, which according to Zillow is a 6,200 square-foot home worth $2.9 million. And that’s before Limited pays to “relocate the Executive’s household goods to any city in the United States”. Of course, the real estate deal is just part of a larger package, which the company oddly announced in an 8-K and then provided the exhibit in the Q, both of which were filed on the same day.

Speaking of the real estate mess, I found this article that ran in the NY Times’ real estate supplement over the weekend to be worth a read. (If you read it online, you can avoid all of those breathless ads for fabulous apartments). Maybe it’s just me, but it reminds me of the old days back in Florida. Some of the players may have changed since the time I covered the S&L mess down there, but it’s starting to smell a lot like 1991.

Posted in: Disclosures, M&A, Operations

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