Maintaining Optimism in the Face of Reality. Occasional observations on the state of the world, society, business and politics. Usually anchored by facts, always augmented by opinion.

Bad Day for Transparency at Buca  | e-mail post

Most readers outside the Minneapolis area might not know that Buca restaurants are headquartered here in the Twin Cities. It's actually kind of ironic, given that you don't really run into a lot of Italians here in this enclave of far northern European heritage. With my freckles and auburn tinged hair, I even feel ethnic in Minnesota.

In any event, I noticed in the Star Tribune yesterday an interesting article about Buca's most recent quarterly SEC filing [PDF link]: their former CEO Joseph Micatrotto actually paid Buca a severance package. That's right, he paid Buca about $582,000, agreed to facilitate the transfer of title to an Italian property, and didn't take any of the two years of salary his employment contract may have entitled him to if he had left for health reasons, as he has claimed.

According to his severance agreement, this $582,031.08 is "further consideration to the company to resolve certain matters." Huh?

This sort of thing just doesn't happen very often. Normally departing executives get the golden handshake/parachute/pink-slip; paying one's former employer is pretty uncommon. Given the relatively unusual nature of such goings-on, some people would like to know: WTF?

Well, when asked by reporters, the answers included:
"The [SEC] filing speaks for itself."
- Laura Anders, Buca Spokesperson

"You'd really have to talk to Joe about that. We're not prepared to comment."
- Sidney Feltenstein, Buca director
The original Dow Jones reporter couldn't get either Micatrotto or his predecesor on the phone before he went to press. Now, in preparing today's Strib story, the reporter actually did get in touch with Micatrotto. What did he have to say about the $582,000 he paid back? "I have nothing to say about that." Alrighty then.

Unfortunately, Buca isn't covered as well as a company like, for example, Wal-Mart, so information is hard to come by on this sort of thing. I did find that Nation's Restaurant News reported last year about the Italian property, Villa Sermenino, that was acquired by Micatrotto and Buca's vintner "on behalf of" Buca. It also mentions Micatrotto seeking Italian citizenship to ease the process of Italian landownership.

Now, looking at their SEC filings, Buca's already in pretty rough shape. As of June they were in default for multiple reasons on their credit facilities, low carb diets are hurting pasta-based dining, and, in my opinion, their food is at best adequate, although I know many who would say it is quite good. They do have a salad that I like, however. Add to this that according to an attorney quoted in the more recent Strib story, Buca may be exposing itself to additional liability by not disclosing material information about this whole Micatrotto affair.

The bottom line is that I am pretty curious about this. It might be (and probably is) nothing much, but the unanswered questions are always the ones that stick in your head. If anyone does have any genuine information about this matter, I'd love to know. If it isn't for public consumption, I can assure you it won't show up here, but drop me a line at feedback.hopefulcynic@gmail.com and let me know.

Oh, and not to make any wisecracks (having gone to a Catholic high school that was about 80% Italian), but if this is my last entry...someone should really follow-up on this story. [I am completely joking about this, so no e-mails about ethnic stereotypes...I'm Irish and anger easily, so just don't go there.]

e-mail post | Link Cosmos | [Permalink]  |  | Wednesday, August 18, 2004
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