Briefs: Judge rules suit against CCA can continue

A federal judge says a prison violence lawsuit brought by 24 Idaho inmates against Corrections Corporation of America can move forward in court in Boise, Idaho.
U.S. District Judge B. Lynn Winmill says he can find no reason to prevent former Idaho Correctional Center inmate Marlin Riggs from modifying his lawsuit to seek class-action status and add more plaintiffs.

Riggs sued Nashville-based CCA last year, and in March several more inmates joined him. The group says the prison is so violent it's called "gladiator school." But CCA asked the court to reject the amended lawsuit, saying Riggs should go it alone in court and the rest of the inmates should file a new lawsuit. Winmill turned down the request, saying it was more efficient to deal with the claims together.

RelatedPrison company CCA asks court to toss Idaho lawsuitCCA’s biggest competitors to merge

— ASSOCIATED PRESS

Group selects student video winners

The National Association of State Boards of Accountancy has announced winners of the NASBA Center for the Public Trust-Ethics in Action Student Video Competition. Winners were: first place ($1,000 cash prize), Bobby Bracks, Fisk University; second ($500), Reggie Blair, Ben Carpenter and Jake Morgan, Lipscomb University; and third ($250), Libby Barker, Katie Hodges and Kelsey Woodrow, Lipscomb University.

The competition was designed to provide a fresh perspective on ethical issues in business. The NASBA Center for the Public Trust is a nonprofit organization.

— RANDY MCCLAIN

Court to allow class-action suit against Walmart on pay discriminationNonresidential Construction Industry Continues to Struggle

Obama nominates three for Fed board

WASHINGTON — Putting a bigger stamp on the Federal Reserve, President Barack Obama on Thursday chose Janet Yellen as vice chairwoman of the central bank and filled two other vacancies on the board, which has enormous power over Americans' pocketbooks.
The nominations are subject to Senate approval. If the Senate confirms all three nominees, Obama will have appointed five of the seven members of the Federal Reserve Board.

His moves come as the Fed, whose decisions influence economic activity, employment and inflation, is facing political and economic challenges.

Challenges ahead

The Fed is steering the economy out of the worst recession since the 1930s, and legislation to overhaul the financial system would eliminate some of the Fed's authority while giving it new responsibilities. Some lawmakers think the Fed overstepped its authority by bailing out some big financial firms during the 2008 financial crisis.

Fed interest rate decisions affect the rates consumers pay on home mortgages and other consumer and business loans. On Wednesday, the Fed ended a two-day meeting by sticking to its pledge to hold rates at historic lows for an "extended period" to help energize the recovery.

Yellen is president of the Federal Reserve Bank of San Francisco. As vice chair, the second-highest ranking Fed official, her duties would include helping build support for policy positions staked out by Fed Chairman Ben Bernanke, who has begun a second term.

Obama also nominated Sarah Raskin and Peter Diamond to the Fed board. Raskin is the Maryland commissioner of financial regulation. Diamond is an economist at the Massachusetts Institute of Technology.

"The depth of experience these individuals bring in economic and monetary policy, financial regulation, and consumer protection will make them tremendous assets at the Fed," the president said in a statement. "I am grateful they have chosen to dedicate their talents to serving the American people."

Yellen was a top adviser to President Bill Clinton and is considered a dove on monetary policy. That means she would be expected to be more concerned about high unemployment, currently holding at 9.7 percent nationally, than about rising inflation.

She would succeed Donald Kohn, who plans to depart at the end of June. Kohn has been a member of the Fed board since 2002.

Yellen and Diamond, who is an authority on Social Security, pensions and taxation, are Ph.D. economists. With Kohn's departure, the Fed would have just one professional economist, Bernanke. Of its other current members, Daniel Tarullo was a Georgetown University law professor, Kevin Warsh brought Wall Street experience and Elizabeth Duke was a banker. Warsh and Duke were nominated by President George W. Bush.

Raskin, who served as counsel to the Senate Banking Committee, would expand the Fed's expertise over financial regulation. That would include consumer issues, which are important to Obama and Congress as they seek to impose tighter oversight on the financial industry.

AP Economics Writer Jeannine Aversa contributed to this report.

Ask the HOA ExpertGreenspan defends Fed’s oversight of subprime mortgage market

Job losses, bailout fuel noisy crowd marching on Wall Street

NEW YORK — Thousands of workers and union leaders marched on Wall Street on Thursday to express their anger over lost jobs, the taxpayer-funded bailout of financial institutions and questionable lending practices by big banks.
The rally was organized by the AFL-CIO and an association of community groups. It included a diverse mixture of union workers, activists, the unemployed and homeowners threatened by foreclosure.

"These guys are like pirates," said small business owner Karen Casamassima, of New York, who called for "economic patriotism" and held up a jewel-encrusted skull with the words, "Financial Terrorists."

The protesters, carrying signs saying "Wall Street Overdrafted Our Economy" and "Reclaim America," rallied at City Hall Park, then marched down to the Merrill Lynch Bull statue to demand good jobs and accountability from banks.

"I think Wall Street is responsible for the collapse of our economy," said Bennett Silverstein, an attorney from Brooklyn who said his savings were depleted by the recession.

Earlier in the day, noisy protesters with signs took over two bank building lobbies on Manhattan's Park Avenue in a prelude to the rally.

More than 100 people entered a midtown building housing JPMorgan Chase offices. They handed a bank executive a letter requesting a meeting with the CEO, and chanted "Bust up! Big banks!" and "People power!"

A half-hour later, they were calmly escorted outside by officers, who remained expressionless as the protesters chanted, "The police need a raise!"

Pinnacle posts loss because of problem loansReal Estate Outlook: Faster Recovery?

American HomePatient deal may take company private

American HomePatient's largest lenders and its biggest stockholder — an investment fund managed by Highland Capital Management — agreed to a deal that should result in the home health company going private.
The transaction involving Brentwood-based American HomePatient comes after 10 agreements under which its lenders delayed taking action to collect a $226 million loan owed by the company. The money initially had been due August 1 last year.

A restructuring of American HomePatient's senior debt would follow the going-private transaction, through which the company would buy for 67 cents each all shares of stock not held by Highland-managed accounts.

Understanding Credit Scores and ReportsPinnacle posts loss because of problem loans

States drop ban on hidden insurance commissions

As Washington grapples with new financial regulations for Wall Street, the insurance industry has been moving in a different, surprising direction — less regulation.
Earlier this year, several states including New York reversed a 5-year-old settlement that forbade some of the nation's top insurance brokers from taking hidden commissions — private fees that insurance companies send to the brokers to steer the most profitable clients their way.

The fees can bring the nation's biggest brokers hundreds of millions of dollars a year in extra revenue. Several of the largest brokers say they won't bring back the hidden fees, but others could and thousands of smaller insurance agents nationwide already accept them, including many in Tennessee.

Now, New York's decision to remove legal roadblocks and once again allow hidden fees for the biggest brokers in the U.S. has touched off a national debate between those who think it's perfectly fine to take such back-door commissions and those who refuse to do it.

Under revised rules, the nation's biggest brokers, Marsh, Aon Corp. and Willis Group Holdings, which control more than 60 percent of the insurance brokerage market, have to disclose commissions to clients only if they ask about it.

But the companies themselves are taking different approaches to the looser rules — each trying to brand itself as doing what's best for customers.

Willis, which employs more than 630 people in Nashville, has said it won't take the commissions worldwide, despite the more lenient rules. Willis' executives say taking the money — known as contingent commissions — works against a customer's best interests.

A Willis competitor, Marsh Insurance, has also jumped on board and says it won't take contingent commissions, either.

Others, however, have disclosed that they will take commissions. Arthur J. Gallagher & Co. told shareholders in its annual report that it expects to make $10 million in annual revenues from the commissions by 2011, a tiny fraction of its 2009 revenues of $1.7 billion.

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Hard Times for HOAs Could Mean Fewer Home Sales Due to Delinquent FeesDo-it-yourself investors avoid brokers

Debt crisis fuels clash of cultures in Europe

ATHENS — It's known as the cradle of Western civilization, but these days cash-starved Greece is viewed as more of a miscreant.
This nation where ancient infuses the modern, where buses and motorcycles whiz past stone remnants from classical times, has become a symbol of fundamental cracks in European unity.

At the opposite pole lies Europe's economic engine, Germany, whose people vehemently oppose bailing out the Greeks.

The turmoil over Greek debt has hammered the markets, hinting at another round in the global financial crisis just as it seemed to be fading. It also raises fears that troubled Portugal and Spain are next, highlighting a North-South divide in Europe that challenges the viability of the European Union and its common currency.

RelatedEurope offers Greece $41B

Even if Greece avoids the worst — no sure thing, with some predicting it will be forced to restructure debt even after a multi-billion dollar infusion of European and IMF funding next month — the cultural rift will stay. Germany and France are European Union linchpins; Greece is generally viewed as problematic, relying on its partners' largesse and loose with statistics.

"They apparently treated their capital like waste," said Ilona Reichelt, a German retiree standing Wednesday near the Brandenburg gate, the Berlin landmark. "It's not like they've suffered an earthquake or a natural disaster. It's a man-made disaster."

Greeks, Germans clash

Modern Greeks take pride in their ancestors, pioneers of law and politics that shaped Western society, while also relishing a good life of carefree spending, lax enforcement and early retirement.

The retirement age in Greece is 65 for men and 60 for women — similar to Germany, where it's 67. But the Greeks shave off an extra 10 years for a wide range of jobs considered physically strenuous or hazardous. These include miners and port workers, as well as hairdressers (they have to stand all day and are exposed to potentially harmful chemicals), musicians, bakers and radio presenters.

In trying to explain how Greeks think, some point to Zorba the Greek, the fictional, free-spirited figure of dance. He's not the type to get his finances in order.

"I wouldn't say that all Greeks are Zorba, but part of every Greek is this love of life and this love of enjoyment," said Nikos Dimou, a 75-year-old Greek author. "The Greeks have a rather negative view about the Germans because they work too much."

Dimou attributes the differences between southern and northern Europe to the lack of a "Protestant work ethic" in the south — as well as the sun-splashed Mediterranean climate, which slows the pace and encourages corner-cutting.

Associated Press writers Juergen Baetz, Verena Schmitt-Roschmann, Daniel Woolls, Shawn Pogatchnik, Colleen Barry and Bradley Klapper contributed to this report.

Understanding Credit Scores and ReportsTN firms feel impact from volcanic eruption

Do-it-yourself investors avoid brokers

SAN FRANCISCO — Joey Windham used to have a stockbroker, but no longer. Instead he has relied on a history professor, an accountant and a doctor who post their trades online.
Windham, the owner of a manufacturing company in Dallas, is part of a small but dedicated band of investors who have bid their brokers and financial advisers goodbye and have turned to the Internet to handle investment decisions themselves.

Do-it-yourself-investing websites, such as Covestor, kaChing and MarketRiders, hold particular appeal for people who are frustrated and fed up after two bear markets that lost them more money than they've made.

For these investors, the traditional brokerage model is broken. They want no part of actively managed mutual funds that disclose portfolio holdings only four times a year and charge high fees for mediocre results. Moreover, they feel boxed in: Many of them are wealthy by most standards but don't necessarily have a spare $250,000 that many independent money managers require to open an account.

On sites such as Covestor and kaChing, investment results and trading are transparent. Customers can copy the moves of professionals and amateurs, or open a brokerage account and tag along with a chosen investor in model portfolios that automatically mirror trades within seconds of their execution.

"They put the performance up on the screen for everybody to look at, and there's competition" among the investment managers, said Windham, who has put his money in a brokerage account with Covestor Investment Management, a service of Covestor.

"I love the competition factor," Windham said. "Plus, they have to invest their own money. It would seem to me that they'll be more disciplined about the research and a lot less likely to promote a product."

At Covestor Investment Management, a $10,000 minimum investment provides access to about 60 different managers, about two-thirds of whom are individuals, such as John Mooney, a University of Oklahoma history professor with no formal investment training, and Robert Freedman, an optical surgeon in Wisconsin who describes himself as having 40 years of investing experience. Other non-professional managers are closer to the financial business.

Access to managers — individual or institutional — can be pricey. Fees on a $10,000 account range between $75 a year for a low-maintenance ex-change-traded fund portfolio to as much as $230 for a specialized opportunistic strategy where the manager trades frequently. Trading costs are separate. Most of the model managers require a minimum investment of $5,000 and charge about 1.5 percent. That's comparable to an actively managed diversified U.S. stock fund, where fees average about 1.4 percent.

Perry Blacher, Covestor's chief executive, said the firm aims to "deinstitutionalize" money management. "People say, 'Just because I gave money to this big firm, are they necessarily the best place?' What speaks is actual credentials and that they have their own money in the model."

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Court to allow class-action suit against Walmart on pay discrimination

SAN FRANCISCO — A sharply divided federal appeals court on Monday exposed Wal-Mart Stores Inc. to billions of dollars in legal damages when it ruled that a massive class-action lawsuit alleging gender discrimination over pay for female workers can go to trial.
In its 6-5 ruling, the 9th Circuit U.S. Court of Appeals said the world's largest private employer will have to face charges that it pays women less than men for the same jobs and that female employees receive fewer promotions and have to wait longer for those promotions than male counterparts do.

The retailer, based in Bentonville, Ark., has fiercely fought the lawsuit since it was first filed by six women in federal court in San Francisco in 2001, losing two previous rulings in the trial court and again in the appeals court in 2007.

Walmart persuaded the appeals court to revisit its 2007 ruling made by a three-judge panel with a larger 11-judge panel, arguing that women who allege discrimination should file individual lawsuits.

Independent stores

Walmart, which has 2.1 million workers in 8,000 stores worldwide, argued that the conventional rules of class-action suits should not apply because each outlet operates as an independent business. Since it doesn't have a companywide discrimination policy, Walmart argued that women alleging gender bias should file individual lawsuits against individual stores.

Finally, the retailer argued that the lawsuit is simply too big to defend.

"Although the size of this class action is large, mere size does not render a case unmanageable," Judge Michael Daly Hawkins wrote for the majority court, which didn't address the merits of the lawsuit, leaving that for the trial court.

Judge Sandra Ikuta wrote a blistering dissent, joined by four of her colleagues.

"No court has ever certified a class like this one, until now. And with good reason," Ikuta wrote.

Ask the HOA ExpertEconomy blamed for U.S. birth rate decline in 2008

Ruling near on closure of Springfield companies accused of insurance fraud

Chancellor Ellen Hobbs Lyle intends to make a final ruling by Wednesday on whether the state can permanently close a pair of Springfield businesses accused of selling bogus health-insurance policies to thousands of consumers nationwide.
Hobbs took testimony on the financial condition of the unlicensed insurance operation on Monday, hearing from state regulators who raided the American Trade Association and Smart Data Solutions LLC in late March.

The state has since taken control of the companies' operations and bank accounts.

The Davidson County chancellor had already ruled after an April 6 hearing that the two companies, owned by Springfield residents Bart and Angie Posey, would be liquidated, but she postponed the order's effective date until she could hear from both sides on whether the companies are broke.

RelatedSpringfield insurance fraud ruling won't come this weekWhy health insurer's staff lied to sick peopleState took its sweet time seizing insurance firmTN regulators seize Springfield insurance office

During Monday's testimony, state insurance department officials said they found that more than $7 million in medical claims remain to be paid to consumers in all 50 states, but that the companies have only about $2 million in the bank.

Certified public accountant Paul Eggers, appointed by the state to serve as receiver for the seized companies, said that when the state took control, he found hundreds of unpaid medical claims in file cabinets and in boxes on the floor throughout the firms' offices, "even in the reception area."

Some of the claims were at least six months old, and an examination of the companies' books suggested there "had not been enough money to pay claims for a number of months" before the state's raid, Eggers said.

David White, a state insurance department financial auditor, said he found that nearly $22 million was deposited into SDS and ATA bank accounts from consumers' premium collections from Jan. 1, 2008, until the state took over last month, and that only about $7 million of that had been paid out in health-care claims.

Couple miss hearing

Attorneys for the Poseys asked the court to dismiss the couple as personal defendants in the state's case against the insurance operation. If that happens, such a decision could exempt their personal assets from being seized to help pay medical claims and other business expenses.

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Understanding Credit Scores and ReportsInsurer charges Toyota for claims

03/03/2010: TNInvestco tax credit documents will stay sealed

Government documents surrounding a $120 million state venture capital program will not be made public for five years after a Davidson County chancellor ruled Tuesday that the material is sensitive and should remain under wraps.
That means a Franklin-based venture capital firm shut out of the program won't immediately get to see how the state rated 25 firms that applied for tax credits under the state's TNInvestco program or view the winning scores of six firms chosen to participate.

The ruling drew far different reactions from would-be investors whose applications were rejected and state economic development officials who say the ruling safeguards the government's right to handle business discussions in private.

"What we're talking about is a fundamental right to see what the government is doing," said Larry Coleman, president of Coleman Swenson Booth, an early-stage venture capital fund. His firm, which has invested more than $63 million in Tennessee-based companies in the past 26 years, was not selected to participate in the tax credit program.

Waiting five years to see the documents doesn't help, Coleman said, adding that he plans to appeal Chancellor Russell Perkins' ruling. "If we can't shine a light on how appointees are spending taxpayer money, it offers opportunity for rascality," Coleman said.

But Matt Kisber, commissioner of the state's Economic and Community Development Department, disagreed.

"I'm pleased by the court's ruling that our department clearly followed the law and was within its right to protect confidential information provided by companies investing in the state of Tennessee," Kisber said in a prepared statement.

"We fully understand the need for open government, and we are committed to upholding that principle while balancing the need of our state to maintain a competitive posture as we seek to attract new investment and create jobs for the people of Tennessee," Kisber said.

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Understanding Credit Scores and ReportsBUSINESS BRIEFS: Ingram Content Group works with Apple on iPad

Local incomes show modest growth

The recession has hurt incomes more severely in Nashville than in the surrounding suburbs, new figures from the Bureau of Economic Analysis show.
Total personal income grew just 2.2 percent in Davidson County to $27.8 billion in 2008 from the year before, the latest figures available from the federal agency.

Williamson County had nearly double that rate, at 4.3 percent.

"I think you're seeing the differential impact of the recession,'' said David Penn, an economist who tracks local conditions for Middle Tennessee State University.

Williamson County, the richest in the state, has maintained one of the lowest levels of unemployment throughout the recession. In March, just 8.1 percent of its labor force was unemployed, compared with 10.6 percent for the state as a whole and 9.1 percent in Davidson County.

"Executives, professionals, doctors and lawyers, those groups are experiencing the lowest levels of unemployment right now,'' Penn said.

The figures reflect a variety of income sources such as wages, investment dividends and benefits such as health care. The income numbers aren't adjusted for inflation.

Aimee Punessen, senior vice president of marketing and investor relations for Williamson County's Franklin Synergy Bank, said the area has been attracting high-income earners for years with low tax rates and good schools.

Cities such as Brentwood also have been restricting developers to large lot sizes, which some have criticized as keeping out moderate- and low-income families.

"If you go to a restaurant around here, you can't get a seat,'' Punessen said. "I feel like saying, don't you people know we're in a recession?" she said.

Other area counties saw modest income growth in 2008, including: Wilson: 3.5 percent; Sumner: 3 percent; Rutherford: 4.1 percent; Cheatham: 1.7 percent; Dickson: 2.4 percent; Robertson: 5.4 percent; and Maury: 5.9 percent.

Contact banking and residential real estate reporter Naomi Snyder at 615-259-8284 or nsnyder@tennessean.com.

Real Estate Outlook: Positive TrackConsumer confidence nearly doubles locally

Nashville-area business bankruptcies

BUSINESS BANKRUPTCIES
Rivers Edge of Rutherford Inc., Murfreesboro

Estimated assets: $1 million to $10 million

Estimated liabilities: $1 million to $10 million

Manchester JBJ J.V., Murfreesboro

Estimated assets: $1 million to $10 million

Estimated liabilities: $1 million to $10 million

Hicks Road LLC, Bartlett

Estimated assets: $1 million to $10 million

Estimated liabilities: $500,000 to $1 million

The Granite Shop Inc., Franklin

Assets: $0

Liabilities: $138,111

Alliance Recycling & Waste Inc., Smyrna

Assets: $19,934

Liabilities: $2.86 million

FILED APRIL 21

SFW Management Inc., Old Hickory

Assets: $50

Liabilities: $354,906

RK Industries LLC, Old Hickory

Assets: $400

Liabilities: $48,350

FILED APRIL 22

Chefs' Repertoire Inc. (doing business as Savory Secret), Nashville

Assets: $30,650

Liabilities: $224,145

SOURCE: U.S. Bankruptcy Court

Nonresidential Construction Industry Continues to StruggleTennessee Commerce Bancorp makes a profit, despite bad loans

Nashville People in Business

Andreas Ritchie is treasurer of the Tennessee Chapter of the German American Chamber of Commerce of the South. Ritchie is director of procurement at V. Alexander.
Elaine Wood is the executive director of the Tennessee Association of Craft Artists.

Dr. Wayne J. Riley has been elected to the Society of Medical Administrators. He is president and CEO of Meharry Medical College.

Dr. W. Charles Penley was elected to the board of trustees of the Association of Community Cancer Centers. Penley practices medical oncology and is a partner at Tennessee Oncology PLLC.

Dr. Charles Eckstein is chairman of the Tennessee Medical Association board of trustees. He is president of Urology Associates PC.

Awards

Nashville-based Paradigm Group ranked No. 10 of 50 firms on Outside magazine's latest list of "Best Places to Work." It was the third year in a row that Paradigm, an employee benefits, human resources consulting firm, made the list.

Teresa Corlew is the 2010 Hercules Award winner from the Nashville Chapter of the Public Relations Society of America. She is vice president and chief customer care officer at Nashville Electric Service.

Mike Carlton received the 2010 Friends of Radnor Lake Environmental Award. He is a Tennessee state parks assistant commissioner.

Clare Thomson-Smith has been selected as a 2010 Fellow of the American Academy of Nurse Practitioners. She is director of the Center for Advanced Practice Nursing and Allied Health.

Dr. Bruce Roth has been honored with the American Society of Clinical Oncology Statesman Award. He is a professor of medicine and urologic surgery at Vanderbilt-Ingram Cancer Center.

Construction

Nashville Convention Center Authority announced the project management team for the Music City Center:

Larry Atema is senior project and development manager.

Roxianne Bethune is manager of diversity business enterprise.

Scott Black is manager of budget, finance and administration.

Steve Curtis is manager of design, engineering and construction.

Debbie Frank is project manager of features, programs and systems.

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Hard Times for HOAs Could Mean Fewer Home Sales Due to Delinquent FeesNashville People in Business

Colliers International returns to Nashville

The commercial real estate brokerage firm known as NAI Nashville is now Colliers International after swapping national brands. The move marks the return of the Colliers' brand to Nashville.
"It's the second-most recognized commercial real estate brand — that's the reason we're glad to be part of that family," said Bert Mathews, a principal in Mathews Partners LLC. Mathews Partners had done business as NAI Nashville through an affiliation with the NAI Global network.

Colliers International's former Nashville affiliate, once known as Colliers Turley Martin Tucker, became Cassidy Turley last month after joining with several other firms nationwide to launch a new company.

Colliers International's new Nashville office will be led by Mathews, Nate Greene, Terry E. Smith, Tony Vaughn and Thomas Davis, all principals in Mathews Partners.

— GETAHN WARD
THE TENNESSEAN

Building Credibility and TrustCommercial real estate is turning around

Consumer confidence nearly doubles locally

The consumer confidence rating in Middle Tennessee has nearly doubled since February, Middle Tennessee State University’s Office of Consumer Research reported today.
The local population felt better about almost all aspects of the economy this month than they did earlier this winter, although they still have negative feelings about the current economy, particularly about the job market.

Most consumers, 55 percent, think “jobs are hard to find,” according to the telephone poll, which involved 421 randomly selected adults in Davidson, Rutherford and Williamson counties on April 19 and April 21. That’s down from 61 percent in February who thought jobs were hard to find.
The percent of consumers who think they’re better off financially from a year ago went from 12 percent in February to 15 percent in April. Now, 45 percent think they’ll be better off in a year than in February, when only 34 percent thought that.
“A key question for local retailers is whether or not this increase in consumer confidence can have a positive effect on consumer spending,’’ said MTSU marketing professor Timothy R. Graeff in a statement. “Unfortunately, negative views of the current economy, fears about the current job market, and concerns about current personal finances suggest that even if some consumers decide to increase their level of spending, many consumers might opt for a “wait and see” approach.”
As for politics, more than half, or 54 percent, think the health care bill will have a negative impact on the economy. And fully 64 percent believe they’ll be forced to pay higher taxes overall in the next year, according to the survey.
Such expectations could dampen consumers’ willingness to spend, Graeff said.

Real Estate Outlook: Positive TrackEconomy picks up with service sector growth, more home contracts

Nashville Business People

Chrysalis Music Group has named Dale Bobo executive vice president, Chrysalis Music Nashville. Bobo had been senior vice president/general manager of Warner/Chappell Nashville.
Mike Johnson of Mike's Custom Painting has been trained as an EPA lead certified renovator.

Karen Cornelius is an accountant with Storage Systems Unlimited. She had worked at MB Steel in Illinois.

Dan Triscritti is an area controller for Advanced Disposal Services' Mid-South market area. He was an area controller for Republic Waste Services of Texas.

Landlords Get Help With Managing RentalsNashville People in Business

BlueCross subsidiary leases space

A subsidiary of BlueCross BlueShield of Tennessee has leased 25,000 square feet of office space near the Mall at Green Hills with plans for 100 employees.
The new lease would boost occupancy of the Green Hills Office Building — owned by developer John Rochford's Battleship Partners — to 100 percent.

Most new hires will be associate care coordinators with medical backgrounds and care coordinator assistants to handle clerical tasks for CHOICES, the state's long-term care program.

BlueCross is one of the three managed-care companies with contracts to handle long-term care needs of beneficiaries on TennCare.

RelatedBlueCross gives break to young adults

Last year, a lease under which Vanderbilt University Medical Center said it would take up 70,000 square feet of space in the same building was among Nashville's biggest lease signings for 2009.

In recent months, restaurant Table 3 has become a building tenant.

Rochford also is key owner of the nearby Green Hills Commons Building that in recent months added causal dining eatery Yolo and a nail salon.

Getahn Ward covers commercial real estate. He can be reached at 615-726-5968 or gward@tennessean.com.

Pinnacle posts loss because of problem loansBuilding Credibility and Trust

Americans' love for U.S. cars rises

WASHINGTON — America's love affair with the automobile has a new spark — a renewed affection for U.S.-made cars after a long dalliance with foreign automakers.
Slightly more Americans now say the United States makes better-quality vehicles than Asia does, with 38 percent saying U.S. cars are best and 33 percent naming autos made by Asian countries, according to an Associated Press-GfK Poll.

The survey suggests those numbers are largely fueled by a plunge in Toyota's reputation and an upsurge in Ford's. The poll was conducted in March, as Toyota was being roiled by nightmarish publicity over its recall of more than 8 million vehicles around the globe and allegations that it responded sluggishly to safety concerns.

Though the U.S. advantage is modest, it marks a significant turnabout for American automakers battered by recession and relentless competition from foreign manufacturers.

RelatedGM pays back loans, will invest in 2 plantsChrysler is out $3.8 billion, but signs encourage CEO

When the same question was asked in a December 2006 AP-AOL poll, 46 percent said Asian countries made superior cars, while just 29 percent preferred American vehicles, reflecting a perception of U.S. automotive inferiority that began taking hold about three decades ago.

"Toyota's problems are not to be minimized here," David Williams, dean of the business administration school at Wayne State University in Detroit, said in explaining the attitude shift.

In both AP polls, Japan — home to brands such as Toyota, Honda and Nissan — was by far the dominant Asian nation volunteered as producing the best cars. European autos — which include BMW, Mercedes Benz and Volkswagen — were called top quality by 15 percent last month, about the same as four years ago.

Williams and others also cited a fresh look Americans are giving U.S. automakers, especially Ford and General Motors. GM has revamped its lineup with more fuel-efficient and crossover vehicles. Analysts say Ford revived its reputation by not accepting the taxpayer bailout and improving its vehicles' gasoline mileage.

Associated Press Polling Director Trevor Tompson, AP News Survey Specialist Dennis Junius and AP writer Ken Thomas contributed to this report.

Mortgage Rates Ease a Bit This WeekSweet incentives lift auto sales in March

Business briefs: Community Health's profits increase

Franklin-based Community Health Systems, which operates a chain of hospitals, said quarterly profits rose as total admissions increased 4.7 percent as a result of acquisitions.
First-quarter net income was $84.9 million, or 75 cents a share, compared with $72.9 million, or 65 cents a share, a year ago. Analysts on average expected 74 cents a share.

First-quarter operating revenue rose 8.5 percent to $3.2 billion, the company reported.

The stock fell 58 cents per share to close at $40.82 in New York Stock Exchange trading on Wednesday.

— STAFF REPORTS

Tractor Supply's net sales rise in quarter

Tractor Supply, the Brentwood-based retail chain said net sales in the first quarter increased 9.3 percent to $710.9 million, and same-store sales went up as well — although not as much as they did in the prior year.

Same-store sales increased 2.8 percent in the first three months this year (the quarter ended on March 27) led by heating products, insulated clothing and products related to feeding pets and animals. Tractor Supply opened 19 new stores and closed one store in the first quarter compared to 28 new stores, one closure and one relocated store a year ago.

The company anticipates net sales up to $3.5 billion for the full fiscal year and same-store sales to range between gains of 1 percent and 3 percent.

Earnings were released after the market had closed Wednesday. On the day, Tractor Supply shares gained $1.25 to close at $69.18 a share in Nasdaq trading.

— RANDY MCCLAIN

Tractor Supply shares up on higher 2010 earnings outlookReal Estate Outlook: Faster Recovery?

Buffett's parrot gets OK for downtown Nashville cafe

Margaritaville Café, a Jimmy Buffett-themed bar and restaurant planned for Lower Broadway, is coming to fruition after all, parrot head sign included.
Plans for singer and beach lover Buffett's Margaritaville project will move forward with its signature parrot logo perched atop a 16.5-foot sign along downtown's honky-tonk row.

The $10 million restaurant also will get windows that open to let in fresh air, despite earlier concerns by preservationists that such a design wouldn't be historically accurate for the area.

On Wednesday, the Metropolitan Historic Zoning Commission, accepting most of its staff's recommendations, approved the façade of the beach-themed restaurant at 322 Broadway.

RelatedMargaritaville Cafe may be allowed to open storefront windowsMargaritaville hinges on a windows compromiseNashville Margaritaville's plan for 'Key West' open windows rile history groupJimmy Buffett’s Margaritaville Café to open in NashvilleMargaritaville designs for Lower Broadway location

Commissioners also allowed a key sign planned for the corner of Fourth Avenue South and Broadway to rise a foot higher than under normal design guidelines.

"We're very pleased," said Larry Papel, a partner in Corner Partnership, owner of the building that had housed Global Café, and even earlier a Planet Hollywood.

Earlier this year, Buffett's Orlando-based Margaritaville Holdings leased the 18,000-square-foot site from Corner Partnership with plans to open a restaurant by December.

Developers initially had proposed to the commission's staff a height of 25 feet for the sign. They later scaled that back to 16.5 feet. The staff recommended a foot less, but Buffett and company got those 12 inches back in the end.

"There's still a concern that it sets a precedent, but we tried to craft our motion so that we were as specific as can be," said Ann Nielson, chairman of the commission that governs the look of buildings in the city's historic district.

The staff also felt that letters that light up one at a time on a sign didn't meet the Broadway Historic District guidelines. But commissioners said the sign is OK since there are other brightly lit signs in the district.

Developers had insisted that windows that open to catch an occasional breeze were critical to the restaurant's image and Buffett's plans.

Getahn Ward covers commercial real estate. He can be reached at 615-726-5968 or at gward@tennessean.com.

Pinnacle posts loss because of problem loansCan You Feel the Optimism Shift in Builder Mentality?

Tennessee Commerce Bancorp makes a profit, despite bad loans

Tennessee Commerce Bancorp, Inc. made $1.35 million in profits during the first quarter of the year, or 24 cents per share, compared to a loss of $2.7 million during the same quarter a year ago, the bank reported today.
The Franklin-based business bank’s bottom line benefited from cutting its provision for loan losses nearly in half to $4.6 million and it net-charge offs for bad loans declined by one-third from a year ago to $4.4 million.

Although bad loans, or non-performing assets, edged upward to a record high of $41.5 million during the quarter, compared to $39 million a year ago, and past-due loans also increased, the bank has been increasing its portfolio of loans to $1.2 billion and its profit margins have been improving.

“This represents the fifth consecutive quarter of net interest margin expansion and is a direct reflection of our continued focus on driving down the cost of funds and maintaining loan yields," stated Mike Sapp, President and Chief Executive Officer of Tennessee Commerce Bancorp.

The company had make a profit of $1.3 million in the fourth quarter of last year.

The bank’s stock edged up 6.4 percent to $9.23 per share on the Nasdaq in trading this morning. The stock price has more than doubled from a low of $4.29 per share at the end of last year.

Real Estate Outlook: Faster Recovery?Streamlined First Tennessee narrows loss

Pinnacle posts loss because of problem loans

Nashville-based Pinnacle Financial Partners lost $5.4 million during the first quarter of the year, a sign that smaller banks are still wrestling with the aftermath of real estate loan losses.
Pinnacle's stock fell nearly 7 percent Tuesday to close at $16.74 on Nasdaq after trading as much as $1.20 per share lower than that earlier in the day.

Pinnacle, whose flagship downtown Nashville office building recently opened, has doubled its allowance for loan losses since the first quarter of last year to $90 million in the most recent quarter; and it tripled its net charge-offs for bad loans since last year to $15 million.

Many of its problem loans are in residential construction or real estate.

RelatedFirst Horizon shareholders grill executives over payRegions sees 5th loss in six quarters

"Real estate prices are down and things are moving slowly,'' said analyst Stephen Moss with Janney Montgomery Scott. "It was a tough quarter.''

Moss kept a neutral rating on the stock. He predicts Pinnacle won't be profitable until the second quarter of next year.

Two other analysts downgraded the stock on Tuesday. Mike Rose of Raymond James cut his outlook for Pinnacle down to "market perform" from an earlier rating of "strong buy," and Wunderlich Securities' analyst Kevin Reynolds downgraded the stock to "hold" from "buy."

Peyton Green, an analyst with Sterne, Agee & Leach, kept a buy rating on the stock, though, and said the long-term prospects for the bank appear good. Green said the bank is gaining low-cost checking and savings accounts and will be able to put that money to work in the form of loans as the economy rebounds.

"Right now, there's not much demand for money,'' Green said. The bank's loan portfolio fell by $84 million during the quarter to $3.48 billion, much of that as a result of reducing loans to builders and developers.

Contact Naomi Snyder at 615-259-8284 or nsnyder@tennessean.com.

Streamlined First Tennessee narrows lossReal Estate Outlook: Faster Recovery?

First Horizon shareholders grill executives over pay

A handful of investors demanded answers Tuesday about pay increases for executives of Memphis-based First Horizon National Corp., the parent company of First Tennessee Bank.
Bank Chairman Michael Rose fielded questions about pay in the face of the bank's third straight year of losses during the company's annual shareholders meeting at the Gaylord Opryland Resort & Convention Center in Nashville.

First Horizon lost $269.8 million last year. It increased compensation for executives by
$7.7 million more last year, mostly to Chief Executive Officer Bryan Jordan, who was promoted from chief financial officer in 2008, and to Frank Gusmus, who heads the profitable trading division for the bank, FTN Financial.

As part of its pay plan this year, the bank also decided to pay executives with millions in stock units that turn into cash in 2011, following new federal rules that forbid cash bonuses at banks that took federal aid under the Troubled Asset Relief Program, or TARP.

RelatedPinnacle posts loss because of problem loansRegions sees 5th loss in six quarters

Rose defended the pay levels on Tuesday, saying most of the executives who will benefit are new to the bank and didn't formulate the bank's past losing strategy of making so many real estate loans outside Tennessee.

That strategy, which has since been abandoned, caused a lot of the bank's problems over the past three years.

First Horizon has spent the past two years selling its mortgage offices outside of Tennessee, laying off staff and investing instead in Tennessee bank operations.

"We looked for opportunities to cut costs and increase productivity and efficiency, taking steps to save up to $100 million (in 2009),'' CEO Jordan said. "We are reinvesting some of those savings in technological innovations to enhance customer experiences and build more efficient processes and practices over the long term."

Rose said most banks have suffered during the real estate crisis. "We haven't had anything comparable since the Great Depression,'' he said.

At Tuesday's meeting, things got testy between Rose and shareholder Bettye Jones, who said she had driven from Memphis.

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Streamlined First Tennessee narrows lossReal Estate Outlook: Faster Recovery?

Nashville Business People

Reba Adams has been named vice president of Robertson Taylor here. The company is a London-based insurance broker.
The Crichton Group said:

Tom Connally is an account executive in its risk management department. He had been a senior broker with Aon Risk Services.

Jennifer Lynn Sterrett is an account manager in risk management. She had been a client manager with Commercial Insurance Associates.

Business plan matters, but other steps come firstLandlords Get Help With Managing Rentals

Nashville recycler PSC Metals makes recovery

Many Nashville residents consider the scrap yard on the east bank of the Cumberland River an eyesore, but it's also increasingly a moneymaker again as the economy and scrap metal prices stage a comeback from recession.
Mike Bowling, who runs the site for PSC Metals recyclers, calls the pile of crushed cars and discarded soda cans near the river "a beautiful view."

PSC is coming off a bad year in 2009 as profits plummeted amid weak prices for scrap, poor demand for most recycled metals and a lack of commercial construction nationally.

In recent weeks the scrap business has picked up along with better demand for steel and at least a doubling of prices for some other types of metals such as copper and cast aluminum.

RelatedNashville renews effort to move scrap yard from riverfrontNashville skyline over the yearsPSC Metals

PSC Metals posted a loss of $51 million before interest and taxes last year, compared with income before interest and taxes of $103 million in 2008.

Starting in the final three months of last year, though, PSC Metals saw its revenues take a turn for the better as volumes and prices of some of its recycled metals improved.

For instance the price of No. 2 cooper scrap that processors deliver to end-users is around $3.10 per pound today, up from about $1.26 a pound in December 2008, industry data show. For scrap cast aluminum, the price has risen to 75 cents a pound from less than half that.

Other scrap metal prices are $100 per ton above what they were selling for at year-end, industry data show.

"The steel industry uses iron ore, scrap metals and energy and all these inputs have increased substantially this year. That has helped pushed the price of finished steel up as well," said Bob Garino, director of commodities at the Institute for Scrap Metal Recycling Industries in Washington, D.C.

"This is a commodity business and commodity businesses are based on supply and demand," Bowling said.

Still, the total volume of scrap processed at PSC Metals' site near downtown remains about 40 percent below peak levels seen in 2008.

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Real Estate Outlook: Positive TrackAirline merger talks boost stocks

A healthier America starts with shared commitment

Start — a single word with more than one possible meaning.
Our nation and Nashville's health-care industry are starting to get their arms around the implications of health reform. The initial reaction is one of complexity and confusion. March 23, the day that President Barack Obama signed the health reform bill into law, will become a date that lives on in infamy to some and a glorious beginning to others.

The differences will be difficult to overcome, but two national goals are clear. We need a healthier America, and we need a strong, healthy economy. Both will require the commitment of individuals and communities, churches and schools, employers and employees. On better health, there should be no partisan divide.

One early required action of reform — to provide preventive services without cost to the employee — takes effect in September. Many employers are moving quickly to embrace an active role in employees' health and well-being.

Nashville companies large and small are leading the way to better health. In terms of revenue, Nashville's largest company is Nissan North America. With 11,000-plus employees and 40,000 covered lives, director of human resources Marlin Chapman's responsibilities are as broad as his shoulders.

Nissan has actively encouraged its employees to engage in their own health and well-being. The Nissan "LiveWell — Your Health" program is a national model. Nissan challenged its employees to walk to better health. Last year, more than 7,000 Nissan employees accepted the challenge and took more than 2.4 billion steps.

HealthStream CEO Bobby Frist motivates his high-tech work force in other ways. Birthdays are now celebrated with fruit, not birthday cakes. Employees have also been encouraged to become active and creative. For instance, try the HealthStream pingpong tournaments (via Wii) instead of your next coffee break.

Exercise is a 2-for-1 deal

The Start! Heart Walk is another rallying point for many Nashville businesses. It is conducted under the auspices of the American Heart Association, and Subway and Wal-Mart are national cause sponsors.

Mark Emkes, former Bridgestone chairman and CEO, has engaged more than 100 Nashville employers to start on employee health and wellness. It is a two-for-one deal. You get two minutes of longer life for every minute of exercise. See www.heart.org/start for more details.

Healthways' CEO Ben Leedle has challenged Nashville to become one of the world's "Blue Zones" — measuring our health status in terms of longevity and healthy lifestyles. Let's hope Nashville leads the nation in employee health and wellness.

Dick Cowart is chairman of the health law and public policy departments of the Baker Donelson law firm and a past president of the American Health Lawyers Association. Reach him at dcowart@bakerdonelson.com.

Health reform means big changes for businessesNonresidential Construction Industry Continues to Struggle

Commercial real estate is turning around

Doug Brandon runs the Nashville area's largest commercial real estate operation, which just joined several other firms to form Cassidy Turley Commercial Real Estate Services. The newly named company has several offices, with a headquarters in St. Louis, and plans to expand more nationally.
Commercial real estate has been hit hard by the U.S. recession, causing reduced demand for offices and industrial and retail space and a tougher climate in which to win financing to buy and sell existing properties.

Brandon, who worked 15 years in the securities industry (including a dozen with the former J.C. Bradford & Co. brokerage house), switched gears to commercial real estate four years ago. He spoke with Tennessean reporter Getahn Ward about what's ahead in sales and leasing activity here.

How does Nashville's commercial real estate market stack up with other cities' at this point?

It's in much better shape than a lot of cities our size nationally and larger. We don't have one industry that dominates the economy here. Relative to the big picture, Nashville is in much better shape than a lot of cities … whether it's Charlotte or Austin or an Atlanta.

You're going to see Nashville grow a lot faster than our peer cities, mainly because Nashville … doesn't generally have the big peaks and valleys like a lot of cities do. It's either a gradual decline or a gradual increase. We're seeing signs already of things starting to turn around.

For our firm, the first quarter this year in Nashville was probably 150 percent better than the first quarter 2009 from a revenue standpoint, and we're starting to see some activity that will turn into deals probably in the third and fourth quarters.

What's one of the big concerns in the commercial real estate scene here over the next couple of years?

One thing, long term — I'm talking a year or year and a half — is that if we don't start seeing some new projects getting started, the office market could get squeezed a little bit over the next couple of years … and (that) would put upward price pressure on the inventory that we do have out there.

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Nonresidential Construction Industry Continues to StruggleTrailways offers bus to Amtrak stop

Trailways offers bus to Amtrak stop

MEMPHIS — A cross-state bus ride will connect Memphis' Central Station, Nashville International Airport and 17 points along the way starting April 26.
TDOT awarded Anchor Trailways a $2.5 million grant to subsidize service to rural areas that lost Greyhound stops from 2005 to 2007. The contract runs through Dec. 31, 2011.

To read this report in its entirety, see The Commercial Appeal.

Contact Wayne Risher at 901-529-2874 or risher@commercialappeal.com.

Top 10 Home Buying MistakesGM expects to pay off loans years early

Clothing designer finds the right fit

Growing up in Middle Tennessee, Jeff Garner didn't feel like he fit in. His friends liked to hunt and fish. He liked to draw in his room.
They played musical instruments; he loved colors and fabrics. He wore his hair long and his dad called him "daddy's little girl." Garner dressed like Abercrombie & Fitch before Abercrombie & Fitch was hip, then discarded the tattered hats and T-shirts when they became mainstream, said his childhood friend and Christian music star Jaci Velasquez.

"He was a cool-looking surfer boy who looked like he should have been in Malibu," Velasquez said.

These days, Garner feels more like he fits in. The 30-year-old clothing designer from Nashville is making a name for himself here and abroad — including being one of the few chosen to walk the catwalk at London Fashion Week in February.

Related'Green' designer Jeff Garner

His clothing line, Prophetik, is sold in nearly 60 stores, including Nashville's Posh Boutiques and Franklin's Ivey on Main, but the highest concentration is in California. There's a smattering of stores in the United Kingdom, Switzerland and Japan.

It hasn't always been easy. Fashion can be a brutal industry in which to make a living. In fact, last year Garner thought he wouldn't make it through another season.

Garner's recent success seems to be based on a foundation that has been years in the making: both the fact that eco-friendly clothing is taking off here and in Europe, and also because he got a start in the entertainment industry in Los Angeles, making friends who have helped him along the way.

"If someone had told me the statistics of the number of people who are successful in fashion, I probably wouldn't have done it," he said.

Garner is feeling a little more encouraged this year, after years of trying to make a name for himself as an organic and sustainable clothing designer in the ultra-competitive world of haute couture. Lately, he has been featured in The Times of London and Vogue magazine.

He didn't want to discuss sales figures but said his revenue has climbed on average 20 percent during each of the past two years. He has made friends with the likes of Jimmy Choo and Avatar film director James Cameron and his wife, Suzy Amis Cameron.

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Top 10 Home Buying MistakesFirst-time jobless claims in Tennessee drop

Nashville People in Business

Suzanne Nahay has been hired as client services manager and copywriter with Delevante Creative. She had been project manager for Tower Investments.
Deborah Varallo received the Jack B. Turner Regionalism Award from the Leadership Middle Tennessee Alumni Association. She is president of Varallo Public Relations.

Association

The Nashville Entrepreneurs' Organization announced new officers:

Clint Smith of Emma Inc. is president.

Arnie Malham of cj Advertising is past president.

Sonny Clark of Advanced Network Solutions is finance chairman.

Debbie Gordon of Snappy Auctions is learning chairwoman.

Rebecca Donner of Inner Design Studio is social chairwoman.

Charles Robert Bone of Bone McAllister Norton is sponsorship chairman.

Charles May of Bytes of Knowledge is sponsorship co-chairman.

Joe Freedman of American Legal Search LLC is membership chairman.

Dan Hogan of Doctor's Associates Home Health is membership co-chairman.

Coco Kyriopoulos of Coco Bonbons is communications chair.

Andy Bailey of NationLink Wireless is member benefits chairman.

Hunter Ingram of Hometownquotes.com is forum chairman.

Benjamin Goldberg of Strategic Hospitality LLC is forum co-chairman.

Construction

Crispin Mathias + Fisher has earned associate and professional certification in Autodesk REVIT 2010. She is with Street Dixon Rick Architecture PLC.

Daley Smith has been certified as a construction document technologist. She is with Barge Waggoner Sumner & Cannon engineers.

Entertainment

The Orchard, a publicly traded London and New York-based digital music and video distributor, has opened an office on Music Row headed by Nashville music executive David Kastle, who previously served as vice president of Buddy Killen Music Group.

Can You Feel the Optimism Shift in Builder Mentality?Nashville People in Business

TN firms feel impact from volcanic eruption

Nashville's Jim McEvoy was scheduled to arrive in Munich today to attend a major industrial trade show.
But with the airport there and others across Europe closed by the after-effects of Iceland's volcanic eruption, the chief executive for North American operations at The Wirtgen Group, a German road-building equipment maker with a headquarters in Antioch, can only hope that he'll be able to take an international flight through clearer skies by Tuesday.

"There's still concern that there'll be issues over Germany through the weekend and on Monday, which would push everything (back) further," McEvoy said.

The eruption of a volcano in the tiny, isolated island nation of Iceland is threatening to turn into a major headache for businesses across Europe — and as far away as the U.S. and Middle Tennessee — as the spreading ash cloud closes more European airports.

RelatedFallout from volcano ripples across interconnected world

Airlines are already counting the cost of grounded planes, and there's a growing fear about the transportation of food supplies and other essential goods should the flight disruptions persist for several days or longer.

For Wirtgen Group, the once every three years trade show, Bauma 2010, provides an opportunity to entertain customers and show off new equipment. "The financial impact is that we've put deposits down for hotel rooms and guaranteed events — booked venues, dinners, tours associated with this trip — and I'm unsure I will get refunded," said McEvoy.

Raoul Russell, who works for sewing machine manufacturer SVP Worldwide in La Vergne, spent much of Friday monitoring air travel across Europe to see if his flight to Germany on Monday would be canceled. Already, several of Russell's colleagues have seen flights delayed or scrapped.

"It looks like the earliest that the flights are going to resume is Saturday, possibly Sunday," said Russell, director of global transportation with SVP, which has a big sales and distribution center in Germany.

Mark Elliott, a Nashville folk singer and songwriter, expects to lose about a quarter of what he would have earned on a music tour through the United Kingdom. He was set to fly out of Nashville Thursday, but now is scheduled for a later flight set to leave Wednesday for London's Heathrow Airport.

Elliott will miss a promotional appearance on a BBC radio show because of the delay. "This time was only a 10-day tour, so it's a bigger impact," Elliott said. He toured longer in Europe last year.

Eurocontrol, the European air traffic agency, said some 16,000 flights were canceled on Friday, more than half the 28,000 that usually operate. Delays and cancellations will continue today as the ash cloud from the eruption of the volcano glacier moves south and east. The flight ban was imposed because of concerns about pilot visibility and jet engine failure from the ash.

Overall, there have been relatively few early reports of major impacts on exports and imports, but analysts stressed that the stakes will rise each day that airlines don't fly.

The Associated Press contributed to this story.

Nashville People in BusinessNonresidential Construction Industry Continues to Struggle

Streamlined First Tennessee narrows loss

After more than a year of shedding bad loans and closing offices outside Tennessee, the parent company of First Tennessee Bank reported Friday that losses narrowed in the first quarter of the year.
The net loss available to shareholders was $27.7 million, or 12 cents a share, compared with a loss of $82.8 million, or 37 cents a share, a year ago. Still, it was the eighth straight quarter of losses for First Horizon.

Analysts had expected a loss of 15 cents a share, according to Thomson Reuters. The bank's stock fell 8.5 percent in trading Friday on the New York Stock Exchange, closing at $14.02 a share.

Stock analyst Bob Patten of Morgan Keegan & Co. downgraded First Horizon's stock to "market perform," saying investors had already priced in the bank's recent improvements and there was little chance of short-term growth.

Patten feared investors were selling the stock to lock in profits. The stock price had reached a 52-week high as of this week.

But Kevin Reynolds of Wunderlich Securities in Memphis kept a "buy" rating on the stock Friday. Reynolds said in a note to investors that he expects the bank will return to profitability in the second half of this year, hit a $17-a-share stock price, and repay the government's TARP money in the next 12 months.

Memphis-based First Horizon National Corp. has been hard hit by construction loans and bad mortgages outside Tennessee, but it has been retrenching back into its home state.

Since late last year, it has added 16 or 17 new hires in the Nashville area, according to Middle Tennessee Market President Doyle Rippee.

"We have had a lot of good growth in households and in consumer and business,'' Rippee said. "We think the economy is beginning to look more positive."

Bad loans decline

The number of bad loans is declining on the company's books. Nonperforming assets, or bad loans, have fallen 17 percent from a year ago. The provision for loan losses fell by more than 60 percent to $105 million in the first quarter.

"I'm very encouraged by the progress we're making,'' CEO Bryan Jordan said Friday in an interview. "We have a lot of momentum."

He said that loan losses were narrowing in home equity loans and that he expects commercial real estate to remain under stress but not get worse.

A lot of the bank's trimming of loan losses has come by reducing lending, particularly for developers or builders. The company has cut its portfolio of residential construction loans to builders by more than $3.6 billion in more than two years.

Total loans are down 15 percent from last year to $17.5 billion.

Contact banking and real estate reporter Naomi Snyder at 615-259-8284 or nsnyder@tennessean.com.

Tractor Supply shares up on higher 2010 earnings outlookNo Need to Hit the Panic Button Yet - Added Jobs Push Mortgage Rates Up

SEC fraud probe leads to Goldman Sachs

WASHINGTON — The government has accused Goldman Sachs & Co. of defrauding investors by failing to disclose conflicts of interest in mortgage investments it sold as the housing market was collapsing.
The Securities and Exchange Commission said in a civil complaint Friday that Goldman failed to reveal that one of its clients helped create, and then bet against, subprime mortgage securities that Goldman sold to other investors.

The SEC said the fraud, a blow to the reputation of Wall Street's most powerful firm, was orchestrated in 2007 by a Goldman vice president then in his late 20s. The employee, Fabrice Tourre, has since been promoted to executive director of Goldman Sachs International in London.

Tourre, the SEC said, boasted to a friend that he was able to put such deals together as the mortgage market was unraveling in early 2007.

In an e-mail to the friend, he described himself as "the fabulous Fab standing in the middle of all these complex, highly leveraged, exotic trades he created without necessarily understanding all of the implications of those monstrosities!!!"

A call to a lawyer for Tourre, Pamela Chepiga at Allen & Overy LLP, wasn't returned.

Two European banks that bought the securities lost nearly $1 billion, the SEC said. The agency is seeking to recoup profits reaped on the deal.

Goldman Sachs denied the allegations. In a statement, it called the SEC's charges "completely unfounded in law and fact" and said it will contest them.

Goldman, founded more than 140 years ago, built a reputation as a trusted adviser to investment banking clients and for sending top executives into presidential Cabinet posts.

In recent years, it shifted toward taking more risks with its clients' money and its own. Goldman's trading allowed the firm to weather the financial crisis better than most other big banks. It earned a record $4.79 billion in the last quarter of 2009.

Financial analysts said the charges dealt a setback to the firm's standing.

"It undermines their brand," said Simon Johnson, a professor at the Massachusetts Institute of Technology. "It undermines their political clout. I don't think anybody really values being connected to Goldman at this point."

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Dickson woman charged in ex-boss’ scamUnderstanding Credit Scores and Reports

Companies can pay for ads on Twitter

SAN FRANCISCO — Twitter announced Tuesday that it is introducing advertising by allowing companies to pay to have their messages show up first in searches on its site.
The debut of "Promoted Tweets" comes as Twitter increasingly faces questions about how it can turn its wide usage into profits.

The ads apparently won't bring in much money during the experimental phase of Twitter's commercial push. Virgin America, one of the advertisers that Twitter invited to test the concept, isn't paying for its first burst of promotional messages, according to Porter Gale, the airline's vice president of marketing.

"I would expect that it would turn into a paid model in the future," Gale said.

Twitter declined to comment when asked whether it's charging the test group of advertisers. In addition to Virgin America, Twitter identified Best Buy Co., Sony Pictures and Starbucks Corp. among the other companies using Promoted Tweets.

Rolled out gradually

The ads will be rolled out gradually, with fewer than 10 percent of Twitter's users likely to see them Tuesday. The company says the ads should be appearing in all relevant searches within the next few days. Twitter has grown quickly in popularity since it started in 2006, with celebrities such as Oprah Winfrey and Ashton Kutcher "tweeting" messages of 140 characters or less alongside everyday users. About 69 million people worldwide used Twitter.com last month, up from roughly 4 million at the end of 2008, according to comScore Inc.

The site has been slow to capitalize on that success — even though the investors who have backed the site have valued it at $1 billion. Twitter has been making an undisclosed amount of money by providing Google Inc. and Microsoft Corp. with access to messages for their search engines. Many people expected Twitter would eventually introduce advertising.

In a blog post Tuesday, company co-founder Biz Stone said the company took its time "because we wanted to optimize for value before profit."

These tweets are to be "called out" as ads on top of search results on Twitter, much as sponsors can pay for listings atop rankings on search engines such as Google, Microsoft's Bing and Yahoo. That means Twitter users would see the new ads when they search broadly for topics being tweeted about.

However, many users connect with the service not through such searches or even visits to the site. Rather, scores of outside programmers have written mobile and desktop software that can access the feeds of Twitter messages that users get from people they are "following" on the site. Twitter said it might take the Promoted Tweets service further and make them also show up on those feeds.

Stone said Promoted Tweets would need to resonate with users. If a Promoted Tweet isn't replied to or forwarded by other users, it will disappear.

AP writers Barbara Ortutay and Peter Svensson contributed.

April Fool! Google becomes TopekaLandlords Get Help With Managing Rentals

Dow builds on its gains

NEW YORK — The Dow Jones industrial average extended its push past 11,000 Tuesday after expectations grew that stronger corporate earnings would signal that a recovery is on track.
Stocks fell in early trading after quarterly results from aluminum producer Alcoa Inc. missed expectations. Major indexes later poked higher as traders jockeyed for position ahead of earnings from leading chipmaker Intel Corp., which reported strong results after the closing bell.

By the close, the Dow had tacked on about 13 points. The Dow on Monday finished above the psychological benchmark of 11,000 for the first time in a year and a half.

The results from Alcoa brought a disappointing start to the flow of earnings reports from the January-March quarter. But analysts said the company's performance didn't provide a good indication of how other companies would do.

RelatedMoney and Markets page with latest developments

The stock market has been rising for 13 months on signs that the economy is improving. But some analysts are concerned that the rise has come too quickly.

Since major stock indexes hit 12-year lows last year, there have been five pullbacks of as much as 8 percent in the Standard & Poor's 500 index. None has topped the 10 percent mark that would signify a correction.

There have been few drops in the past two months. Instead, stocks have been notching a string of gains.

According to preliminary calculations, the Dow rose 13.45, or 0.1 percent, to 11,019.42. The S&P 500 index rose 0.82, or 0.1 percent, to 1,197.30, while the Nasdaq composite index rose 8.12, or 0.3 percent, to 2,465.99.

Real Estate Outlook: Positive TrackTractor Supply shares up on higher 2010 earnings outlook

Local business briefs: TN-based companies to share investment strategies

Senior executives of Tennessee-based publicly traded companies will share their investment strategies with analysts, fund managers and others during the inaugural INVEST Tennessee Equity Conference set for May 27 at the Nashville Convention Center.
Companies expected to take part include Corrections Corporation of America, BioMimetic Therapeutics Inc., Cumberland Pharmaceuticals Inc., Delek US Holdings, HealthStream Inc., Tennessee Commerce Bancorp and Tractor Supply Co. Each will make 35-minute investment presentations and hold separate meetings with individual investor and analysts.

Profiles of presenting companies are available at the conference's Web site, www.invest-tn.com. Admission is free for qualified investment professionals. Registration at the Web site requires a code that can be obtained from an INVEST Tennessee invitation or by contacting the CFA Society of Nashville through Ward Cullum at 615-835-2792 or INVEST Tennessee through Terry McWilliams at 615-290-5636.

— GETAHN WARD

Principal Financial opens office here

The Principal Financial Group has opened an office in Brentwood as a hub for its health-care provider network. Principal Edge Network, a proprietary network, works with doctors, specialists and health-care facilities. Publicly traded Principal Financial is based in Des Moines, Iowa.

The Brentwood office has 21 employees with plans to expand to 50 by the end of the year.

— GETAHN WARD

Multigenerational Households Go Back to the FutureBUSINESS BRIEFS: Ingram Content Group works with Apple on iPad

Many workers will see health insurance changes

WASHINGTON — Although the recently passed health-care legislation will most dramatically affect Americans who don't have health insurance, most non-elderly Americans — about 160 million — are expected to keep getting coverage through their employers.
But workers could see some changes as a result of the new health-care law.

Will my employer have to offer any new benefits?

Yes. Beginning as soon as this fall, companies that offer health plans will have to allow employees to keep their children on their plans until the children are 26 years old.

RelatedHealth-care law is gift to adult kids

Employers will also be prohibited from putting lifetime caps and some annual caps on benefits for their employees.

Companies that begin offering new health plans will be subject to other new requirements, including a mandate starting in 2014 to provide an "essential benefits package" that is expected to be more comprehensive than a typical employer-provided plan. (Employers with existing health plans would be exempt from this new requirement.)

Will my employer be able to scale back benefits?

Yes. Most employers that now offer health plans would be able to change the kind of medical benefits they offer their employees, potentially increasing co-payments and deductibles or reducing what their plans cover.

What will happen to my premiums?

That's difficult to say, but most are expected to continue to increase in coming years.

The nonpartisan Congressional Budget Office estimated that by 2016, an average individual policy provided by a large employer would cost about $7,300 a year (and slightly more for workers at small firms). An average family policy would cost about $20,300 a year (and slightly less for workers at small firms). As now, those premiums would probably be split between employers and employees.

In comparison, in 2009, the average employer-provided individual policy cost $4,824 a year, and the average family policy cost $13,375, according to an annual survey by the nonprofit Kaiser Family Foundation.

Will I see other changes to my paychecks?

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Health reform means big changes for businessesRx for HOA Insurance Gapposis

Business plan matters, but other steps come first

When an aspiring business owner decides to move ahead and start a new venture, conventional wisdom says the first thing he or she needs to do is write a business plan. But research on how to plan and my own experience suggests this isn't usually very effective.
In fact, writing a formal business plan should be the final step in a three-step business planning process.

Step one is to assess your idea to determine if it is actually a viable business opportunity. Is there a large enough market? Can I charge this market enough to make a profit?

Is the concept something I can personally pull off? Do I have the experience, knowledge and access to the necessary resources to make this business successful?

This first step should not involve that much detail. It should be a quick-and-dirty first assessment of the concept.

Step two is to develop the business model. A business model adds more detail to the evaluation and begins to make sure all of the moving parts of the business work together.

What is the value that is offered to the customer and what is it worth to them? Who is my target market? What do they expect out of me as a customer? How do I get information to them and how do they want to get the product? What are the key activities to make this all come together and what will they cost? What are the resources I need to make this happen (money included)?

There is a great resource available to help would-be owners develop a business model: www.businessmodelgeneration.com. This Web site contains a large amount of free information on business modeling and links to an excellent book to guide you through the process.

Now, it's time for the plan

Step three is to write an actual formal business plan. The business plan details the elements of the business model. It helps organize what can become a complex and overwhelming array of issues.

The business plan puts everything down on paper to make sure that we have thought of all of the important "must-dos" that go into a successful startup.

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Insurer charges Toyota for claims

DETROIT — Armed with reports of accidents for which they've already paid claims, State Farm insurance has asked Toyota to repay them for any crashes related to unintended acceleration by its vehicles.
Other companies are expected to follow, and demands for repayment of claims — called "subrogation" in the insurance business — could end up costing Toyota from $20 million to $30 million, said Mark Bunim, an attorney with Closed Case, a mediation firm. Customers could see a bonus from any repayment: Insurance deductibles they paid could be refunded.

"If we didn't incur any risk, we get our part back and you get your part back," said Dick Luedke, a spokesman for State Farm.

Toyota has recalled 7.7 million vehicles in two recalls related to sudden acceleration, one involving floor mats that can jam gas pedals and one involving pedals that stick. The government last week fined Toyota the maximum $16.4 million for violating a five-day deadline in reporting the sticky pedals. Toyota has not decided whether to appeal.

RelatedToyota's legal tactics often lean to evasion, review finds

State Farm sent a letter to Toyota in September 2007 asking it to pay for claims in an accident involving a 2005 Toyota Camry. State Farm wrote, "We are aware of several complaints to your company of sudden acceleration involving the Toyota Camry."

The driver had reported the same problem to her mechanic twice before, State Farm wrote.

The letter was copied to the National Highway Traffic Safety Administration, which replied by saying it had looked into similar complaints, starting in August 2006, and closed the investigation on April 3, 2007. State Farm wasn't reimbursed.

If Toyota doesn't end up paying for accidents that insurers link to sudden acceleration, the cost could trickle down to consumers, who could end up paying higher insurance rates for Toyota vehicles.

Whatever happens, resolution won't come soon.

"Someone has to go through each and every auto claim, and then try to make a determination if it involved unwarranted acceleration," Bunim said. "It could take months."

Toyota spokesman Brian Lyons said subrogation claims are common between insurers and automakers. Beyond that, Toyota had no comment.

Despite recent troubles, Toyota's vehicles don't cost much to insure because they are generally safe and reliable, said Peter Moraga, spokesman for the Insurance Information Network of California. That could change if the problems drag on, he said.

"That's when we would see an impact on insurance rates," he said. "It really depends on what Toyota does in terms of fixing the problem."

Lawyers prepare for Toyota lawsuitsRx for HOA Insurance Gapposis

First-time jobless claims in Tennessee drop

The number of first-time jobless claims in Tennessee this year is down 41 percent over 2009 but is still elevated compared to 2008, labor officials said on Thursday.
This onslaught of unemployment insurance claims the past two years have taxed the state's mainframe system, and the state Department of Labor and Workforce Development said it is making progress on a possible major redesign.

A consortium of four states, with Tennessee in the lead, has hired Chicago Systems Group-Government Solutions as a consultant on the redesign, a contract worth $2.8 million, said Don Ingram, state employment security division administrator. A proposal is expected in September 2011, and the states will request federal money to fund new systems, he said. Tennessee received $7 million last year for a variety of technology upgrades, which will help pay for the consultant.

A new unemployment benefit system could cost upward of $60 million. It would replace the state's antiquated mainframe with a server-based hardware and will allow for real-time processing instead of overnight delays typical now, Ingram said.

RelatedJobs resources and tipsUpgrades needed

Meanwhile, the state has hired more workers, required more overtime and weekend work and bought more phone lines and servers to deal with higher volumes.

"We have to make upgrades more from a technology standpoint, not by just adding employees," Ingram said.

This year there have been 126,000 initial claims for unemployment, up 31 percent from 96,000 initial claims over the same period two years ago. Still, the volume of claims is sharply lower than the peak volumes seen last year at the height of layoffs and recession.

On average each week, some 160,000 unemployment checks are being sent out, which is down from a high of 180,000-plus earlier this year, Ingram said.

Contact Bonna Johnson at 615-726-5990 or bjohnson@tennessean.com.

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Local business briefs: Petra Capital completes investment

Nashville-based Petra Capital Partners said it has completed a $7 million follow-on investment in SpecialtyCare, a provider of outsourced clinical services to hospitals.
With the latest funds, private equity firm Petra has $14 million invested in Nashville-based SpecialtyCare, which is led by former Renal Care Group executive Gary Brukardt.

— GETAHN WARD

Nodality Inc. raises $15.5M in financing

Nodality Inc., a San Francisco-based biotechnology company with a research and development laboratory in Franklin, said it has raised $15.5 million in a new round of financing.

Pfizer Ventures, an arm of Pfizer Inc., and Laboratory Corp. of America Holdings led the round. Other participants included Kleiner Perkins Caulfield & Byers, TPG Biotechnology and Maverick Capital, which like Pfizer previously had invested in Nodality.

Nodality focuses on developing the next generation of personalized medical tests for cancer and autoimmune disease treatments.

— GETAHN WARD

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Airline merger talks boost stocks

The idea of combining United Airlines and US Airways into the world's second-biggest airline captures the fancy of airline managers, industry analysts and investors, who bid up the price of the two airlines Thursday on news of merger talks.
But what about passengers — and the low fares they enjoy?

"The consumer could be negatively affected," said George Hoffer, an economics professor at Virginia Commonwealth University.

"That's one less carrier to get nervous about its declining market share or weak consumer demand (for air travel) and to respond by launching a big sale, or by putting more seats into the lower-price categories," Hoffer said. "It's also one less airline that can refuse to go along with the fare increase."

The United-US Airways talks come as carriers here and around the globe increasingly look to consolidation in the industry as they continue to lose money amid the economic downturn that has kept travelers out of the air. On Thursday, for instance, British Airways and Spain's Iberia signed a merger deal in hopes it would help shore their sagging bottom lines. Barely two years ago Delta Air Lines took over Northwest Airlines to create the world's biggest carrier.

Consolidation also is appealing to many in the U.S. industry and to investors, who have witnessed the erosion of traffic for old-line, legacy airlines such as United and US Airways at the hands of discounters.

US Airways' stock jumped 10.7 percent to $7.55 a share on Thursday.

United's shares rose 6.8 percent Thursday to $20.23. Other carriers' shares also were up Thursday, but by smaller percentages.

Analysts say there are more discount airlines with stronger market shares — which could offset higher fares for travelers and offset regulators' concerns about a lack of competition.

And the airlines' labor unions, they say, could be induced to go along with a deal with offers of big pay raises and, potentially, stock in the merged carrier.

Those inducements could be funded by the cost savings and revenue gains that would be the result of a merger, they say.

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