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2009’s Worst Disclosures Buried in Footnotes

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By Barry Ritholtz - December 21st, 2009, 8:45AM

Around this time each year, my friend Michelle Leder at footnoted tries to come up with the worst SEC disclosures of the past 4 quarters.

She asks her readers to cast their votes and this year, and that tradition continues: She is asking her readers to vote on the stinkiest disclosures of 2009.

Despite –or perhaps because — the economy was (shall we call it) “soft,” there was plenty of material to choose from; So much so that it was actually difficult to winnow down the list to just five. But here’s what Michelle came up with (with the links to the actual posts):

  1. Martha Stewart getting a $3 million retention payment for remaining at Martha Stewart Omnimedia (MSO).
  2. Chesapeake Energy disclosing it spent $12.1 million to purchase Aubrey McClendon’s antique map collection.
  3. InfoGroup saying the cost of the yacht for former CEO Vinod Gupta was really $873,078 instead of the zero that it had previously reported.
  4. Freddie Mac, which took more than $50 billion in money from the government to stay afloat, giving its new CFO a $1.95 million signing bonus in addition to other goodies.
  5. Ross Perot Jr. asking for — and getting — a $1.1 million tax gross up after collecting over $950 million by selling Perot Systems to Dell.

You can cast your vote for the worst footnote here. Voting will remain open through Dec. 30 and the results will get posted on Dec. 31.

PERMALINK

8 Responses to “2009’s Worst Disclosures Buried in Footnotes”

  1. jc Says:
    December 21st, 2009 at 9:00 am

    OT, Adam Sharp on unfolding CITI disaster.Tiny Tim holding for an eyewash paper gain on CITI while his IRS Dept takes $35B hit on special tax treatment for CITI. I really mean US taxpayers are taking $35B hit on CITI

    http://seekingalpha.com/article/179086-citigroup-take-the-loss-tim?source=email

  2. KevinM Says:
    December 21st, 2009 at 9:40 am

    What is a “tax gross up”?

  3. Advocatus Diaboli Says:
    December 21st, 2009 at 9:51 am

    Maybe we have to change the way society sees money. Most scams, like fineprint BS, are made possible by a zero sum view of the world.

  4. Mannwich Says:
    December 21st, 2009 at 10:01 am

    @KevinM: It’s when the company basically increases or “grosses up” one’s gross payment to, in effect, pay the taxes on what that person would have been responsible for themselves.

    The result would be Ross Perot Jr. receiving a NET payment of $1.1 million instead of a gross payment of that same amount with net being much lower due to tax deductions.

  5. Mark E Hoffer Says:
    December 21st, 2009 at 10:16 am

    “A library book lasts as long as a house, for hundreds of years. It is not an article for mere consumption, but fairly of capital, and often in the case of professional men, setting out in life, it is their only capital.”
    — Thomas Jefferson

    http://www.goodreads.com/author/quotes/1673?page=1

    note: kindle e-books and SEC reports in XBRL need not apply..

  6. catman Says:
    December 21st, 2009 at 10:22 am

    OK I needed that gross up explaination too. Now how about a loose translation of chaza. Clicked thru the Chesapeake link since Aubrey is a neighbor of a friend and found the poor sap had to sell his 9000 bottle wine collection. That’s 24 years worth at one a day. Oink.

  7. ToNYC Says:
    December 21st, 2009 at 3:37 pm

    Schadenfreude postpones compassion. We all wish our profits were grossed up; but why isn’t that taxed at 100% to keep it real?

  8. The Worst Footnote Disclosures of 2009 : Wiley Accounting Updates Says:
    December 28th, 2009 at 6:45 pm

    [...] SOURCES: Ritholtz, B. (2009). 2009’s Worst Disclosures Buried in Footnotes, BNET.com, December 21 (Retrievable online at http://www.ritholtz.com/blog/2009/12/2009s-worst-footnote-filings-with-the-sec/) [...]