Looks like I'll just be ignoring this until December to see if I need a tax loss:
Lender posts $335-million loss
By JEFF HARRINGTON
¸ St. Petersburg Times, published May 6, 2000
Despite IMC Mortgage Co.'s phenomenal crash,
the home equity lender rewarded its top
executives and outgoing officials handsomely.
TAMPA -- IMC Mortgage Co. lost a stunning $335-million
in 1999, cementing its legacy as one of the most
spectacular boom-to-bust stories among Tampa Bay area
public companies.
But that loss, which came to light in recent filings with
regulators, did not stop IMC's board from paying its top
incoming and outgoing executives handsomely.
George Nicholas, the departing chief executive at the home
equity lender, received a compensation package worth
$876,290 for 1999, up 47 percent from the year before,
the new filings with the Securities and Exchange
Commission show.
Nicholas' 1999 payout includes a $220,000 settlement for
leaving the company. But his base salary of $637,533 rose
11 percent from 1998's $574,750. He received no bonus
either year, unlike his $1.6-million bonus in 1997, when
IMC was in its heyday of making pricey home equity loans
to people with bad credit.
Nicholas' replacement, Dennis J. Pitocco, received
$259,000 in salary and other compensation in 1999 even
though he didn't become an officer of the company until
Nov. 16.
IMC closed 1999 by selling its core business to
CitiFinancial Mortgage for $100-million, selling off
almost all other assets to pay creditors and continuing to
fend off shareholders devastated over their fizzled
investments.
Losses for the year more than tripled from $100-million
in 1998 and are almost five times more than the
company's total earnings since going public in 1996.
Revenues plummeted to $165-million from $321-million.
Formed in 1993, IMC was a high-flying peddler of home
equity loans until mid-1998, when investors fled the
market for safer places to put their money. Compounding
the problem, IMC lost millions trying to hedge against
rising interest rates. Facing bankruptcy, it agreed last
November to sell its chief operations to CitiFinancial,
which was affiliated with its biggest equity lender.
The financial fallout from IMC's crash-and-burn was
spelled out in the recent filings with the Securities and
Exchange Commission after 11/2 years of terse financial
statements and "no comments" from IMC executives.
Throughout the debacle, a recorded message on IMC's
investor relations line steered callers to SEC filings.
The policy of reticence is being retained by the new
regime. Pitocco's assistant on Friday said her boss would
not comment beyond the public filings.
Pitocco, identified in filings as a 47-year-old bank
executive who ran IMCC International until last November,
is now the sole executive officer listed in financial
statements. He is acting as president, chief executive
officer, chief operating officer and chief financial officer.
He also is one of three directors up for election at the
company's annual meeting in Jacksonville next month.
Pitocco was put in charge of winding down the IMC
operation, with his salary winding down gradually.
According to the company's proxy released this week,
Pitocco will receive a salary of $250,000 in both 2000
and 2001, $187,500 in 2002 and $125,000 in 2003. He
also will receive quarterly bonuses between $12,500 and
$25,000 plus an incentive of 5 percent of any
distributions to shareholders.
Among departing executives, president and chief operating
officer Thomas Middleton last year was paid $689,583, up
43 percent; and chief financial officer Stuart Marvin
received $579,622, up 65 percent. Both figures were
inflated by a $220,000 settlement similar to the one
Nicholas received.
Under terms of their employment contracts, Nicholas,
Middleton and Marvin could have received up to
$8.5-million combined for leaving the company. But all
three agreed to the $220,000 payouts -- $100,000 now
and $120,000 over the next 12 months.
According to the proxy, the three were motivated by a
desire "to provide value to IMC creditors and potentially
some value to IMC shareholders."
It could well be a case of too little, too late. IMC common
shareholders received nothing from the CitiFinancial deal
and "the company believes that any payment to its
shareholders in the future is unlikely," according to the
filings.
Secured creditors and unsecured creditors, owed roughly
$750-million combined when CitiFinancial bought IMC,
were first in line to be paid.
IMC's net loss in 1999 includes an $85.4-million goodwill
charge it took after disposing of eight subsidiaries that
were not part of the CitiFinancial deal.
The company said it will not make any more loans and will
continue to dispose of loans and other assets on its books.
It said it could make no assurance it will not seek
bankruptcy protection in the future. |
