Nashville entrepreneurs get ally in Michael Burcham

Michael Burcham launched his career as an entrepreneur in Nashville when an investor in New York invited the then-30-something to make a pitch. Four startup companies later, Burcham hopes to lead the next generation of entrepreneurs eager for their moment.
Burcham was recently named president of the new Nashville Entrepreneur Center; he'll start July 5 and get going on plans to raise as much as $3 million to help fund its operations over the next 12 months. The center's goal is to be both a launching pad and classroom of ideas for startup companies.

He sold his last company — Paradigm Health, which handled catastrophic disease management — in 2007. Burcham most recently has been a faculty member at Vanderbilt's Owen Graduate School of Management and is finishing up work there.

The Brentwood resident moved to Nashville in 1982 after getting a degree in physical therapy at the University of Mississippi. He worked for National HealthCare Corp. in Murfreesboro and later for HCA, at one time being assigned to the very office space once used by company co-founder Jack Massey.

That's when Burcham, the son of a minister and a nurse, said he discovered his own entrepreneurial spirit and decided to launch health-care businesses of his own. Burcham discussed the Nashville Entrepreneur Center and its future role in creating wealth and jobs with Tennessean business reporter Bonna Johnson.

What are the goals for the Nashville Entrepreneur Center?

We want to help new businesses launch in a positive way so that they can sustain themselves, and we want to help entrepreneurs connect with some of the great resources in the city. There is a wealth of resources within Nashville — not-for-profits, the universities, the small support groups and even large support infrastructures — but unless you've been here awhile, you don't even know where they are. Having a quick way to reference what's here is one of my first, most important objectives.

The second is matchmaking new entrepreneurs to people who have proven themselves in that space and could be a great mentor for them. We want to help them think through a business plan model so they can get funding for that idea. We'll help with the introductions they need for potential customers and potential capital.

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For Want of a NailNashville Entrepreneur Center names Michael Burcham as president

Growth jolts TN job market to life

Two and a half years ago, Jackson National Life Insurance was hurrying toward an expansion that would bring new business and jobs to the Nashville area.
"They were ready to sign a lease and make an announcement," said Janet Miller, chief economic development and marketing officer for the Nashville Area Chamber of Commerce. "Then the economy went into a tailspin."

Last week, the Michigan-based company finally announced it would open a 150,000-square-foot regional headquarters in Cool Springs, creating 750 jobs in three years. About 300 jobs could be in temporary space as early as July, said Matt Largen, director of economic development in Williamson County.

The insurance company's announcement is just one in a string of recent economic development gains in the area that seem to signal a growing level of confidence that the economy is rebounding.

Loews Hotel said this month it plans a shared-services center in downtown Nashville, while Nissan North America broke ground last week on a $1 billion lithium-ion battery plant in Smyrna. On Thursday, the Vanderbilt University Children's Hospital announced a 30,000-square-foot addition, after having delayed a 2008 expansion plan that would have been much larger.

"The economy is improving, and confidence is building," said Matt Kisber, Tennessee commissioner of Economic and Community Development. "We're as busy as we've ever been."

State officials are working well over 100 active projects related to expansions and new investments, up as much as 40 percent over last year when the nation was deeper in recession, Kisber said.

In the Nashville area, the number of economic development projects actively being worked is back to pre-recession levels, Miller said.

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More debtors pay bills on time

Consumer delinquency rates are dropping at U.S. retailers and banks such as American Express Co. and Bank of America Corp., signaling an incipient lending thaw that may spur economic growth.
Past-due loans at Bank of America, the second-largest card lender, fell for a fifth month in April and by the most in four years, while AmEx's delinquencies were down 34 percent from a year earlier. Target Corp., the second-largest U.S. discount retailer, last week reported its lowest delinquency rate in the latest quarter since the second quarter of 2008.

With fewer tardy borrowers to worry about, banks are more likely to extend fresh credit to American consumers, whose spending makes up 70 percent of the economy. That may weaken Federal Reserve Chairman Ben Bernanke's commitment to an "extended period" of low interest rates, said economist Stephen Stanley.

"Then we get back to the scenario where the U.S. banking system is gradually healing, credit quality is gradually improving and creditworthiness of borrowers is improving," said Stanley, chief economist at Pierpont Securities LLC in Stamford, Conn. "Some evidence of stability in the banking sector is an additional precondition to normalizing monetary policy."

U.S. central bankers on April 28 kept the benchmark federal funds rate in a range of zero to 0.25 percent, where it has been since December 2008.

Real Estate Outlook: Up or Down?Seniors get Medicare drug checks early

Tennessee Commerce Bancorp wants to raise $50M in stock sale

Tennessee Commerce Bancorp said Thursday it plans to raise up to $50 million in a stock sale, hopeful that an improving market for bank stocks will help it raise the money.
The Franklin-based bank, which has nearly $1.4 billion in assets and focuses on business loans, said it could use the money to repay the $30 million it owes the federal government from the bank bailout to raise capital, pay down debt or for general corporate purposes.

"The market for banks to raise capital has been pretty good lately,'' said Martin Zorn, chief administrative officer.

The bank stock has improved from a low of about $3.25 a share in December to $8.95 per share on the Nasdaq Thursday. But it is still down nearly half from its price two years ago, as it has continued to struggle with bad loans.

Separately, it also has been battling a lawsuit by the U.S. Department of Labor over its firing two years ago of Chief Financial Officer George Fort.

Pressure builds

Revealing yet more pressure that the bank is under, Tennessee Commerce said in a regulatory filing on Thursday that it expects federal regulators to require higher capital levels for the bank, even though it remains "well capitalized" by current standards.

Zorn said regulators weren't forcing the bank to raise $50 million, but the bank could use the funds for such a purpose. The bank also said federal and state regulators are considering an informal enforcement action called a memorandum of understanding, which lays out a plan for how Tennessee Commerce Bank would be expected to operate going forward.

According to American Banker magazine, more than one-quarter of all the banks in the country are likely operating under such agreements, a byproduct of last year's toxic financial fallout.

MidSouth Bank in Murfreesboro is among those locally with such a regulatory document. Pinnacle Financial Partners also said it has an agreement with regulators to maintain higher than normally required levels of capital.

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

Short Sale NegotiatorsTennessee Commerce Bancorp makes a profit, despite bad loans

Genesco beats expectations, will buy competitor

Nashville-based Genesco Inc. said Thursday it beat expectations for a profitable quarter, improved its outlook for the year and will buy a competitor to continue expansion of its sports clothing and ball cap stores.
The latest acquisition, Sports Avenue, based in Rock Island, Ill., operates 46 retail stores across the country and makes $42 million in annual revenues. The purchase price was not disclosed. The deal will close later this year.

"Genesco has held up reasonably well in a tough environment,'' Mitch Kummetz of Robert Baird & Co. said in a note to investors. "We now believe that the company is poised to deliver double-digit earnings growth over the next few years."

Genesco's stock gained 93 cents a share in Wall Street trading after all the news. It closed at $29.91 per share on a day in which the Dow Jones industrial average gained nearly 284.54 points overall as investors' mood brightened over European debt prospects.

Kummetz said Genesco has managed to hammer out more favorable rental agreements from its retail landlords during the U.S. recession and has boosted profit margins in part by slimming down on its number of stores and improving sales. It also reported it had $105 million in cash on hand and no debt.

Genesco reported profits of $8.6 million, or 36 cents per share, during its fiscal first quarter ending May 1, compared with a loss of $5.7 million, or 31 cents per share, during the same quarter a year ago. That included a pre-tax charge of $2.4 million, or 6 cents share, in the first quarter compared with a pre-tax charge of $11 million, or 47 cents per share, a year ago.

The company now expects to make a profit of $2.10 per share to $2.20 per share for the year.

One of Genesco's most profitable lines of business is the sports hats and clothing business, which the company calls Lids Sports Group.

The company is growing that segment incrementally through acquisitions such as Sports Avenue, according to Christopher Svezia, who covers Genesco as an analyst for Susquehanna Financial Group, based in Philadelphia.

"We like what we heard,'' Svezia said Thursday, attributing much of the Nashville-based chain's profit growth to cost savings, but some to an increase in consumer demand. "I don't know if the consumer is back 100 percent, but you definitely see improvements from six or nine months ago."

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

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Seniors get Medicare drug checks early

WASHINGTON — Government checks to seniors with high prescription drug bills are going out early, Obama administration officials said Thursday, plugging the advantages of the new health care overhaul law.
The $250 checks for Medicare recipients who fall into the prescription drug coverage gap are a new benefit this year, a modest down payment on gradually closing the "doughnut hole" over the next decade. Seniors who fall into the gap are responsible for $3,610 in drug costs in 2010 before their Medicare coverage kicks in again.

Health and Human Services spokeswoman Jessica Santillo said the rebates are going out ahead of the June 15 deadline set in the law. Some 4 million seniors and disabled people will get checks this year. The first monthly batch of 80,000 will be mailed out June 10.

Significant savings will come next year, when the law provides a 50 percent discount on brand name drugs for seniors in the gap, and a smaller discount on generics. Those discounts gradually increase year-by-year until 2020, when the coverage gap will be fully phased out.

Margery Traynor, a retired auto worker from Springfield, Ohio, said the $250 will barely make a dent in her prescription bills. Traynor, 81, who suffers from lung problems, is paying more than $450 a month for three pricey brand-name drugs, including inhalers that help her breathe. And that doesn't count the cost of nine other medications she takes.

Traynor fell into the doughnut hole for the first time this year, after General Motors cut back its retiree medical coverage and she had to fend for herself on Medicare. "I was shocked," she said. "I had no idea what medicine cost. The most I paid under the GM plan was $25 a month."

Seniors don't have to apply for the new benefit, since their eligibility will be automatically determined by their Medicare prescription drug plan and the government. HHS Secretary Kathleen Sebelius warned that scam artists are already taking advantage of rebate program to circulate bogus "application forms" that solicit personal information such as Medicare numbers.

"If anybody shows up asking for information ... report it immediately," Sebelius said. "Nothing is required in order to get the check."

The Medicare coverage gap came about because of funding constraints.

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Apple's value surpasses that of rival Microsoft

LOS ANGELES — For the first time in the long history of the dueling computer companies, Apple Inc.'s market capitalization passed that of rival Microsoft Corp. on Wednesday, making Apple the most valuable technology company in the world.
Apple shares closed at $244.18, giving it a market cap of $222.6 billion, compared with Microsoft, which has a total stock value of $219.4 billion.

Apple's stock, which has repeatedly reached record highs in recent months, has risen nearly 16 percent since the beginning of the year, while Microsoft's has dropped almost 18 percent.

During the last decade, in which it released a series of hit products such as the iPod and iPhone, Apple's stock has soared nearly 1,000 percent.

Microsoft, meanwhile, has seen its stock price remain relatively stagnant.

"It's more than just Mac versus PC," said Yair Reiner, an analyst at Oppenheimer & Co. Inc. "The market sees Apple as an engine of innovation and growth, but with Microsoft, the vast majority of its profits come from products that have been in the market for a long time."

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County details tax breaks for new corporate office

FRANKLIN — Williamson County commissioners have given initial approval of a tax abatement package that would save Jackson National Life Insurance Company nearly $500,000 over five years.
The company announced Tuesday that it was creating a regional headquarters in Cool Springs and would bring 750 new jobs to Tennessee. Jackson National plans to occupy One Greenway Centre, a 155,000-square-foot office building near the Nissan North American headquarters.

“The bottom line is we give up about $100,000 a year and in exchange we get the jobs and the trickle down affect,” County Mayor Rogers Anderson said.

Two county committees approved the deal Wednesday evening. The full county commission will vote on the package June 14.

Jackson National would receive a 40-percent property tax break for five years, which comes out to $492,800. Anderson said taxes allocated for the county’s school system would not be affected by the incentive package, which was offered to the company before they signed a 10-year lease of One Greenway Centre.

The county has given similar incentives to Verizon Wireless, which opened a state headquarters in Franklin in 2008, Nissan and Community Health Systems, which have headquarters in Cool Springs. The county’s Economic Development Director, Matt Largen, said Jackson National’s new headquarters would have an annual $70 million payroll, and generate more than $1.2 million in sales tax.

Commissioner Reba Greer was the only commissioner who voted against the tax abatement package.

“I’m generally opposed to these because we can’t do it for everyone,” Greer said. “Small businesses are just as important as the big ones. I don’t think we should show favoritism to the big ones.”

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Brides scramble to save their big day after flood

After months of planning and perfecting — the dress, the venue, the flowers, the cake, the music, the tablecloths, china and chairs — the wedding suddenly looked like it was going to be a complete washout — literally.
"I've been planning my wedding day for a year and five months, but really since I was 9 years old," said Delaney Gill, a Nashville bride who woke to the news that her caterer, the park where she planned the ceremony and her reception venue were all under two feet of floodwater — with just days to go before her wedding day.

"I had to plan the whole wedding again in about three days."

The early May floods not only damaged homes and businesses but also shut down wedding venues and florists, caterers, photographers and other vendors, just as the biggest matrimonial season of the year gets under way.

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Scores of brides and grooms planning to tie the knot this summer have had to scrap their original plans, and their budgets in some cases, and dive into the mad scramble to secure venues that usually book months in advance — in just a matter of weeks or days.

Popular all-inclusive venues such as the flooded Schermerhorn Symphony Hall and the Gaylord Opryland Resort & Convention Center are closed for months, leaving couples searching not only for a suitable site for their big day, but starting from scratch in hiring caterers, florists, musicians, tables, tents and other gear that had been part of a wedding package.

Flood creates 'frenzy'

"At first, it was just a complete frenzy," said Ashley King, who runs Ashley's Bridal Guide, a popular Nashville bridal blog that has served as a central information clearinghouse for brides and vendors about last-minute options since the flood.

"The day of the flood there was so much information flying on Twitter about the weddings that day — grooms were stuck on the interstate and venues were shut down and ministers went missing. Now things are a little more organized and vendors are working together to get these couples married."

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Youth facility can take new patients

A moratorium on new admissions to Manatee Palms Youth Services in Bradenton, Fla., has been lifted, according to Psychiatric Solutions Inc., which owns the 60-bed facility.
Last month, Florida authorities halted admissions to the intensive residential treatment facility for children and adolescents after finding that administrators hadn't made promised safety improvements.

Manatee Palms continued to treat existing patients while working with Florida's Agency for Health Care Administration to implement changes required for the moratorium to be lifted, its officials said. Effective immediately, the facility will begin accepting new admissions and referrals.

Franklin-based Psychiatric Solutions operates mental hospitals nationwide.

— GETAHN WARD

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Tax credit, low mortgage rates lifted April home sales

WASHINGTON — A now-expired homebuyer tax credit and low mortgage rates helped boost sales of previously occupied homes in April.
Sales of previously owned homes rose 7.6 percent to a seasonally adjusted annual rate of 5.77 million, the National Association of Realtors said Monday.

The sales increase sparked a rise in home prices. The median price for a new home rose to $173,100, up 4 percent from a year ago.

But the improvements aren't likely to last. The tax credit is now gone. And economists caution that Americans are facing so many financial obstacles that falling rates alone won't be enough to lift the housing market.

— ASSOCIATED PRESS

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Problems spotted in economic revival

WASHINGTON — Increased consumer spending has fueled hopes that the current economic recovery will keep getting stronger, but behind the encouraging numbers is a little-noticed reality: Much of the new spending has come not from America's broad middle class but from a small slice of affluent people at the top.
And upper-crust spending, while welcome, can be worrisomely volatile:Since it involves luxuries, not everyday necessities, the buying can suddenly shrink if something such as the recent stock market plunge panics affluent shoppers.

What's more, some analysts calculate that another big chunk of the recent spending spurt has come from an even shakier source — delinquent homeowners who have more cash in their pockets because they've stopped making mortgage payments now that their houses are worth less than the loan amounts.

Economists' uneasiness over building a recovery on such uncertain foundations is all the greater because the larger fundamentals also are shadowed by uncertainty.

The improving job market should broaden the base of consumer spending, but wages are not expected to go up fast, which will crimp middle-class spending power.

Moreover, the job gains this year have gone largely to less-educated and lower-income workers, according to Labor Department statistics.

"The economy can grow if lower-income households aren't able to spend, but it can't flourish," said Mark Zandi, chief economist at Moody's Economy.com.

The recent acceleration of spending "was a little bit of release of pent-up demand," said Ken Goldstein, an economist at the Conference Board, a New York research group that tracks consumer activity.

"We survived the recession, we deserve a night out," Goldstein said of the mood of many spenders. Without much more job growth and bigger incomes, he said, "that window will close fast."

At mercy of markets

The surge in spending by upper-income Americans could be seen in the upturned sales of high-end cars, clothing and luxury services. Nieman Marcus, Mercedes and Morton's restaurant, among other companies catering to the affluent, have prospered accordingly.

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Real Estate Outlook: Positive TrackConsumer confidence nearly doubles locally

Jury in tobacco trial awards widow $29M

FORT LAUDERDALE, Fla. — A Broward County jury on Thursday handed down a $29.1 million verdict to a widow who said her husband started smoking as a teenager.
Connie Buonomo, 77, of Hollywood, said the decision to sue had little to do with recouping losses. She wants to punish R.J. Reynolds Tobacco Co., the corporation she blames for her husband's death.

"I don't feel they've ever been honest," said Buonomo, whose husband, Matthew, died of chronic obstructive pulmonary disease in 2008. He was 80.

Buonomo's attorneys at the Kelley/Uustal firm in Fort Lauderdale said that because of the expected appeal, it's unknown when Buonomo and her family will receive any money if they prevail in the case.

Building Credibility and TrustNashville People in Business

Nashville People in Business

Kris Koch has joined Werthan Granite LLC as head of its new Solid Surface Division. He previously worked for Affinity Stone Group in Nashville.
Kathleen O'Brien, president of the Tennessee Performing Arts Center, has been named to the board of trustees of Virginia Intermont College. O'Brien will serve as chairwoman of the enrollment committee.

Engineering

Lauren Comet has joined the corporate and urban design division of Gresham, Smith and Partners as an interior design and architectural intern. Steve Verner, a project designer in the firm's health-care division, recently passed the Center for Health Design's Evidence-Based Design Accreditation and Certification exam.

Entertainment

ASCAP has appointed Ryan Beuschel as creative manager for its Nashville branch. Beuschel had been A&R manager at Universal Music Group.

Songwriter Rich Fagan and executives Tom Oteri Jr. and Bridgette Fox have launched Broadminded Music, a new publishing venture.

Chris Palmer will join Warner Music Nashville as vice president for promotions on June 14. He had worked at Lyric Street Records.

Finance

Bob McAdoo, director and senior research analyst for Avondale Partners, has been named the top stock picker in the airline industry according to the 2010 Financial Times StarMine Analyst Awards, an annual ranking of Wall Street's best brokerage analysts.

Kelli Gabriel, financial adviser, and Tara Carlson, registered representative, have joined Shoemaker Financial in its Franklin office.

Laurel McKenzie, Brett Turner and Shasone King have joined Fifth Third Mortgage and mortgage loan originators. McKenzie is a 20-year veteran of the mortgage industry; Turner is a 10-year veteran; and King worked five years for Franklin American Mortgage.

The Middle Tennessee Division of the National Association of Credit Management has elected as new chair Sherry Nixon, credit manager at IAG Financial, and vice-chair Bill White, credit manager at PFG Customized Division.

Brooks Odom, credit director at American Paper & Twine Co., will have a three-year term as a new director.

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Flooded homeowners face painful choice: rebuild or retreat

Middle Tennessee had to battle floodwaters three weeks ago.
Now, thousands of homeowners forced out of their homes are left trying to figure out whether to rebuild or walk away. Some want to sell their homes to the city. Others want to fight to keep their property and are digging into savings to pay for repairs and other expenses that insurance won't cover.

Those in flood zones aren't sure if their city will let them rebuild.

"We're in limbo," said Diane Sesler, whose Pennington Bend home flooded. "It's very difficult. We don't know anything."

RelatedNashville Flood 2010Complete coverage of Nashville floodingFlood of 2010 Resource Guide INTERACTIVE TIMELINE: Follow the events as they unfoldedFlooding Beyond the Cumberland River

She and her husband, David, a computer programmer, worry they can't afford both a monthly mortgage on their damaged home and the hotel bill in an extended-stay hotel, which costs them $1,700 per month. The Federal Emergency Management Agency capped their housing grant at $700 a month.

The financial mess has left the Seslers — and other homeowners — facing tough choices that threaten to leave them thousands of dollars in the hole as pressure builds to make a decision.

The Sesler home is one of 3,000 damaged structures within the 100-year flood zone in Nashville. They don't know if they can afford to rebuild at a higher elevation as federal rules may require.

Or, they may be able to seek a buyout from the city of Nashville, which is working on a program to buy several hundred or a few thousand properties in danger of flooding again. But it could take at least 10 months to put money in owners' pockets.

"There is going to be some painful decisions that have to be made," conceded Nashville Mayor Karl Dean, speaking at a bankers conference last week, estimating that some 2,800 people are out of their homes because of the flooding. "This is real hurt, real injury."

Other areas hit by the flooding are grappling with similar issues.

The city of Franklin estimates seven homes might have to be purchased by the city because they were substantially damaged and they sit below the required flood elevation.

Cheatham County put a hold on building permits within the 100-year flood plain until Monday so the county could determine the damage levels to the 430 homes affected by the flood.

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Hard Times for HOAs Could Mean Fewer Home Sales Due to Delinquent FeesFlood Victim Q&A

Flood Victim Q&A

Nashville is delaying building permits for some flood victims. Below are answers to some of their common questions.
Is a building permit required to rebuild?

Yes, but the permit is free for flood victims. No permit is needed to gut a house or to remove wet drywall and floors, etc.

Should I wait on my contractor to apply for a permit?

RelatedNashville Flood 2010Complete coverage of Nashville floodingFlood of 2010 Resource Guide INTERACTIVE TIMELINE: Follow the events as they unfoldedFlooding Beyond the Cumberland River

You don't have to, unless the damage is more than $25,000, in which case the permit requires a licensed general contractor. If the permit is in your name, you're the one responsible for meeting building codes.

You can always get a contractor to put the building permit in his or her name later, instead of yours. Ask your contractor to get a copy of the permit you can keep for verification purposes.

Is Metro rejecting any building permits to repair flood damages?

Not yet, but some with buildings in the 100-year flood plain with substantial damage may have a delay in getting a permit.

Metro could not say how long the delays could be. The city will send an inspector to the home to determine damage. But, in most cases, those with less than 3 feet of water in a one-story home, or less than 6 feet of water in a two-story home, won't be viewed as severely damaged. Owners should get a permit right away. Those outside the 100-year flood zone also should get their permits right away.

Why the delay for some others?

Those who had substantial damage, equating to more than 50 percent of the building's value, may have to rebuild to current standards, meaning the finished floor elevation of the building must be at least 4 feet above the 100-year flood elevation for homes; and at least 1 foot above for commercial buildings in Nashville.

Nashville's elevation requirement is higher than some other cities' in order to drive down flood insurance premiums.

How do I know if I'm in a flood plain?

Check online with Metro to see if your address is in a 100-year flood zone at: http://maps.nashville.gov/checkflood/ or go to the Metro Office Building to see if you can get a building permit at 800 Second Ave. S. between 7:30 a.m. and 4 p.m. Monday through Friday.

SOURCE: Metro Water Services

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European debt worries world

BERLIN — A dark cloud has settled over the world's financial markets, as growing numbers of people are concluding that the debt crisis in Europe could hammer global growth — and even bring back recession barely a year after a patchy recovery took hold.
Government officials — whose job it is to boost confidence — downplay that risk, but many economists are warning that the much-feared "double-dip" recession could be starting in Europe.

It would be the next ugly chapter in the global financial and economic turmoil that began three years ago. And now as then, what is striking is the interconnectedness of everything — how near-default in Greece and weeks of dithering in Germany have affected commodities such as oil and gold and, with demand and confidence waning, have bludgeoned stock markets around the world in a way that rattles ordinary people saving for retirement from Korea to California.

In 2007, the bad debt connected to repackaged subprime mortgages started undermining banks and hedge funds, and by early 2008 confidence in the system was slipping fast.

This time it is the exposure of banks everywhere to sovereign debt — the IOUs of governments — whose value has been falling for months.

The sheer size of the European economy is a factor, said Mauro F. Guillen, director of the Lauder Institute at The Wharton School in Pennsylvania. "If European demand goes down, global growth will slow down," he said.

"A European economy that lags is not necessarily enough to put the world economy back into recession. But a European economy that cannot stabilize its currency and capital markets certainly will push the global economy back into the red." Nicholas Colas, ConvergEx Group chief market strategist, told The Associated Press. "A double dip is a possibility."

It is a daunting prospect, because having already deployed their best countermeasures — stimulus spending and central bank interest rate cuts — governments everywhere may be out of ammunition.

Lehman collapse replay?

Stephen Lewis, a London-based economist with Monument Securities, spoke for many of the pessimists Friday after a week of market turmoil in Europe when he saw "no guarantee that the upswing in the global economy from 2009's low point will be sustained."

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Nashville Greyhound bus terminal gets interim home

The Nashville Greyhound bus terminal is moving from Eighth Avenue to the intersection of Charlotte and 11th avenues, in the former Hansen Chrysler building, according to a building permit and a sign at the Greyhound bus terminal.
A spokeswoman for Greyhound, Bonnie Bastian, said the location was temporary. The bus terminal has to move to make way for Nashville's new convention center, the Music City Center, which is under construction.

"We had excavated as far as we can without taking out the Greyhound building,'' said Holly McCall, a spokeswoman for the convention center.

Greyhound had hoped to move to the former Music City Dodge dealership at 710 Murfreesboro Pike, but neighbors complained the bus station would bring crime to the neighborhood.

The Board of Zoning Appeals rejected the application last year.

At its new location, the bus station would be neighbors to an Asian grocery, an empty warehouse building and a vacant lot.

Property records show the former auto dealership building is owned by an entity of Charlotte, N.C.–based Crosland LLC, which also owns the Terrazzo condo building a few blocks away in the Gulch.

A building permit says it will cost $480,000 to rehab the Hansen Chrysler building for the Greyhound bus terminal.

The sign on the bus station said the move to the former Hansen Chrysler building at 1030 Charlotte Ave. would take place June 2.

A spokesman for Greyhound, however, said the company is trying to work with the city to find a permanent and/or temporary location, and no deal has been finalized.

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

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Chrysler considers stock sale next year

TORONTO — Chrysler Group LLC is considering a public stock offering sometime in 2011, the automaker's new CEO says.
Sergio Marchionne, who also heads Italy's Fiat Group SpA, said Thursday there is enough demand in the marketplace to support initial public offerings for Chrysler and General Motors Co., both of which were restructured in government-funded bankruptcy protection cases last year.

He also said Chrysler struggled through a painful restructuring last year, and he never wants to see the company lose money again.

"I expect 2010 will be a much better year than we originally forecast," he said, predicting that U.S. vehicle sales will top 11 million this year and 12 million in 2011.

"Those are good volumes to try and build a car business on," he told reporters before a business speech in Toronto.

Sales slumped to 10.4 million last year, the worst in more than a quarter century.

Chrysler would have been sold off in pieces in late 2008 or early 2009 if the U.S. government had not stepped in with billions in aid. The government put Marchionne in charge of turning around the Auburn Hills, Mich., automaker and gave Fiat a 20 percent stake in the company.

That can grow to 35 percent if it meets targets set by the U.S. Treasury. The remainder of the company is 68 percent owned by a United Auto Workers retiree health-care trust, 10 percent by the U.S. government and just over 2 percent by the Canadian government.

Actions have slashed flow of red ink

In its most recent quarter, Chrysler slashed its net loss to $197 million on cost cuts, manufacturing efficiency and more disciplined pricing.

That was far less than the staggering $3.8 billion the company lost from the time it left bankruptcy protection June 10 through the end of last year. Marchionne said Chrysler's turnaround plans are starting to work.

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More men claim sexual harassment

As job loss worsens and societal norms change, men filing sexual harassment claims against either male or female supervisors have become a bigger share of workplace discrimination cases handled by federal officials statewide.
In 2009, the number of men who filed sexual claims, 73, comprised 19 percent of all sexual harassment cases in Tennessee, a significant upturn from 53, or 12.3 percent, in 2000, according to the U.S. Equal Employment Opportunity Commission, which enforces workplace discrimination laws. Overall claims fell from 431 to 385.

EEOC officials say comprehensive data aren't available, but it appears the majority of claims in most states involve same-sex harassment in which male supervisors are accused of bullying male employees.

Nashville attorney Teresa Bult said the recession and a difficult job market are among other reasons more men have filed sexual harassment claims.

RelatedChart: Increase in sexual harassment claims filed by men

It also has been easier for men to sue other men for such offenses since a 1998 U.S. Supreme Court case that involved a Louisiana oil rigger sexually harassed by male co-workers offshore to the extent that it created a hostile work environment.

In more traditional office settings, as women increasingly fill management jobs it has sparked more opportunities for men to sue female supervisors for "reverse harassment," said Michael Russell, an attorney with Gilbert, Russell & McWherter.

"It's still rare, but it's happening more than it used to," said Russell, whose firm filed lawsuits on behalf of two males who accused male supervisors of harassing them.

"Males may still have an uphill battle because there is still the stereotype that men can take it more, and aren't really offended, when comments are thrown their way," said Bult, an attorney with Constangy, Brooks & Smith.

'A pretty new area'

Same-sex harassment usually involves men bullying other men or what the harassers perceive as "horsing around," attorneys said. Sometimes, the victim is a worker who is perceived as effeminate or gay, they said.

Bult, who typically represents employers in cases, has defended five sexual harassment cases filed by men in the past 10 years, most of them involving men suing men.

In one case, a worker sued his male manager, claiming he'd made sexually harassing comments. In another case, a heterosexual worker sued his gay boss for showing him pornography, saying he was offended by the manager's conduct and lifestyle.

Bult also defended a beauty salon when a gay male worker sued his female supervisor for inappropriate touching.

"It's still a pretty new area of law," Bult said.

"Sometimes when employers are doing sexual harassment training, they forget to focus on the idea that sexual harassment can sometimes not look like what you think it should," she said. "If a male brings a complaint to their attention, they need to take it seriously."

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

Insurer charges Toyota for claimsUnderstanding Credit Scores and Reports

Tax credit for companies providing health care gets mixed review

WASHINGTON — The Obama administration Monday unveiled a tax cut for small companies that provide health insurance, but business groups gave it a mixed review.
Even if it amounts to free money, many small businesses won't qualify for the tax credit.

The full benefit goes to companies that have 10 or fewer workers with average salaries of $25,000 or less. They can get Uncle Sam to pick up 35 percent of their premiums. Sole proprietors are not eligible. Neither are firms with 25 or more employees, or average wages of $50,000 and above.

"We're thinking mom-and-pop shops with one or two employees," said James Gelfand, the U.S. Chamber of Commerce's health policy director. "For some businesses this will be helpful, but for many it will not be helpful. You have to be so small that it will be difficult."

Administration officials said they're trying to target assistance to those who need it most. "The Number 1 concern of small businesses is access to affordable health care," said Small Business Administration head Karen Mills, noting that only about half of businesses with three to 10 employees offer coverage.

"People know this means money in their pockets," Mills said.

Benefit is immediate

The major expansion of coverage under President Barack Obama's health-care overhaul law isn't slated to hap pen until 2014. Congress included the small-business tax credit as an immediate benefit partly in recognition of small businesses' political clout.

Small-business owners remain skeptical of the law. Last week the National Federation of Independent Business joined a court challenge seeking to overturn its requirement that most Americans obtain health insurance coverage.

Internal Revenue Service rules issued Monday resolved a range of questions about the tax credit that Congress didn't address. The agency generally worked to expand the number of companies that can qualify for the benefit.

For example, dental and vision benefits will be eligible, not just medical coverage. And companies that get state tax breaks to help pay premiums also can claim the federal assistance. Moreover, business owners' salaries won't be counted in figuring out the company's average wages — allowing more firms to stay under the cutoff for the federal credit.

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Study: UT system brings in $2.5B

KNOXVILLE — A study by the University of Tennessee shows that its campuses bring in at least $2.5 billion annually in income to the state and support more than 53,600 jobs.
The study by the Center for Business and Economic Research at UT Knoxville also found that the university generates an estimated $237.6 million in state and local tax revenue.

Data from fiscal year 2008 was analyzed to estimate the economic impact of the UT system overall and the campuses in Knoxville, Martin, Chattanooga, the Health Science Center in Memphis and the Space Institute in Tullahoma.

Students and visitors attending athletic events at each campus spent about $348 million, accounting for $147.3 million in income and 4,879 jobs.

The study did not include visitors attending non-athletic events.

For the individual campuses:

• UT Knoxville: Economic impact: $950.2 million. Jobs created: 23,055.

• UT Health Science Center: Economic impact: $761.2 million. Jobs created: 12,433.

• UT Chattanooga: Economic impact: $205 million. Jobs created: 5,232.

• UT Martin: Economic impact: $138.5 million. Jobs created: 3,844.

• UT Space Institute: Economic impact: $19.3 million. Jobs created: 362.

Nashville Entrepreneur Center names Michael Burcham as presidentReal Estate Outlook: Faster Recovery?

Marketers put new American shopper under microscope

We have all heard that the recession has changed American consumer behavior. Indeed, the change has been dramatic.
Many have proclaimed a "new age of frugality," and marketers are adjusting their projections to deal with the new reality. The smart marketers are adjusting their tactics, too.

A recent survey by consulting giant Booz & Co. polled more than 2,000 American consumers and verified that they really have tightened their belts. They reduced their spending in a wide variety of categories.

Here's where budgets have been slashed: The top 10 were food away from home, electronics, clothing and media/entertainment (each more than 50 percent); home improvements and alcohol (both more than 40 percent); and pets/toys/hobbies, financial products and services, tobacco and nonalcoholic beverages (each more than 30 percent).

Also, 65 percent of consumers now believe that saving is more important than spending, and most will sacrifice convenience for price. They're happy to use coupons to secure good prices.

The Bureau of Economic Analysis reported a 3.9 percent savings rate in the fourth quarter of 2009 compared with 1.5 percent just two years earlier. Americans are definitely saving more.

Booz consultants identified several distinct consumer segments, including:

Shoppers 2.0. They are heavy users of technology and the Internet. They buy online, are frequent coupon users and have less brand loyalty than many others.

Deal Hunters. This group is the most price-sensitive. Like the Shoppers 2.0 group, they are heavy coupon users, and they exhibit little brand loyalty. They are more likely to use the Internet to compare prices but are less likely to buy online.

Channel Surfers. Good deals trump convenience for this group.

Loyalists. They're unlikely to change brands or leave their preferred retail channel. This segment does, however, use online research and buys online if its favorite brands are available.

Big brands adjust

Many brands have already reacted to consumers' new habits by adjusting their product offerings, promotions and pricing. Drugstore chain CVS installed coupon kiosks for members of its loyalty program. CVS Extra Care cardholders can get up to five coupons at the point of sale based on past buying habits.

High-end restaurant chain Morton's has added a $5 entree of three mini-burgers available at the bar. Whole Foods, in a bid to combat its image of high prices, developed a customized magazine for shoppers, the Whole Deal , to distribute coupons. The result: coupon redemption is up 325 percent compared with two years ago.

Today, you not only have to segment customers by age, gender and income, but also need to focus on how they shop. After learning "how," you can adjust your marketing plans for maximum impact.

Consumer confidence nearly doubles locallyReal Estate Outlook: Positive Track

Wall Street crash draws spotlight to vagaries of speed trading

NEW YORK — If you saw a penny on the sidewalk, would you pick it up?
You may think it's not worth the effort, but certain investors who have been in the news do. Using super-fast computers, high-frequency traders in effect bend down to pick up pennies lying about in the stock market — then do it again, sometimes thousands of times a second.

More than a week after the Dow Jones industrial average fell nearly 1,000 points, its biggest intraday drop ever, regulators still are sifting through buy and sell orders to figure out what sparked it. One big focus is orders placed by high-frequency traders, or HFTs, and for good reason. These quick-buck firms barely existed a few years ago but now account for two-thirds of all U.S. stock trading.

In other words, all of those TV pictures of the stately New York Stock Exchange building on the evening news are an illusion. The real action on Wall Street is far away in Kansas City, Mo., and in New Jersey, in towns like Carteret and Red Bank, where HFTs named Tradebot and Wolverine and Tradeworx ply their trade.

High-frequency trading firms, which number more than 100, use computers programmed with complex mathematical formulas to comb markets for securities priced too high or too low because traders haven't had time to react to the latest data. The computers then buy or sell in a split second, locking in a profit.

The opportunities seem hardly worth noting — not just fleeting but also small, often a penny or less.

But those pennies can add up to a lot, enough to draw the attention of Goldman Sachs Group Inc., the giant Chicago hedge fund Citadel Investment and other big firms. In recent years they've paid hundreds of millions of dollars for stakes in high-frequency trading companies.

The money has stoked what was already fierce competition among the firms for a leg up.

Time is of the essence

To spot opportunities and act on them before others, HFTs constantly hunt for faster computers. They also locate themselves close to the big exchanges' data centers. That can cut their trade times by milliseconds.

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Spirit of Nashville poster sales help cleanup

The "Spirit of Nashville" series of posters that showcases iconic Nashville places and moments, from the Loveless Café to the Iroquois Steeplechase, now includes two designs that commemorate the historic floods of two weeks ago.
Both posters feature rising floodwaters in the same vintage art style that is a hallmark of the series created by the Anderson Design Group.

Available today, 100 percent of the $30 price will go to flood relief organizations Samaritan's Purse and the Red Cross.

Joel Anderson, owner and creative director at Anderson Design Group, said he was inspired to create the posters after spending a day with his sons last week helping with cleanup in hard-hit Bellevue.

RelatedNashville Flood 2010Complete coverage of Nashville flooding Flood of 2010 resource guide

"We were picking up trash and pulling out drywall, and we were blown away by the attitude and spirit that was out there," Anderson said.

After that experience, he returned to his studio and designed a poster that shows two hands joined in lifting a guitar out of the water with the words "Courage, Hope, Strength, Pride, Generosity" across the top and "Spirit of Nashville" along the bottom, with a Tennessee flag motif in the background. It is a brand-new design.

The other poster is a take on a 2005 poster that features a female musician performing in a spotlight on the Grand Ole Opry stage. The redesigned version shows floodwaters up to her knees and the phrase "Play On." Matt Lehman, a former staff designer, created the original poster, and Anderson did the redesign.

"Our city came together," Anderson said. "I'm really glad to be able to put that into art."

McQuiddy Classic Printing and Athens Paper contributed their services to create the limited-edition run of 500 prints of each design. The prints are 18 by 24 inches.

Posters can be purchased at the firm's office, 116 29th Ave. N. That's off West End and near Centennial Park. Orders also can be placed at www.spiritofnashville.com.

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

Building Credibility and TrustTips ease process of applying for aid

Judge selects lawyers to lead Toyota lawsuits

The federal judge overseeing sudden-acceleration lawsuits against Toyota Motor Corp. appointed 21 plaintiffs' lawyers to manage litigation involving U.S. claims.
Toyota, the world's largest automaker, faces at least 228 federal and 99 state lawsuits including proposed class actions over economic loss and claims of personal injuries or deaths caused by sudden-acceleration incidents. The federal lawsuits were combined April 9 in a multidistrict litigation, or MDL, before U.S. District Judge James V. Selna in Santa Ana, Calif.

More than 70 plaintiffs' lawyers sought appointments to leadership positions in the federal lawsuits, including about 60 who spoke at a hearing before Selna on Thursday. Before the hearing, Selna proposed limiting the number of plaintiffs' attorneys on leadership committees to 12.

"The court became convinced at the initial hearing that a larger group of counsel is needed to meet the needs of the case," the judge said in Friday's order. Selna set the next hearing in the lawsuits for May 28.

The Toyota City, Japan-based company has recalled more than 8 million vehicles for fixes related to sudden, unintended acceleration. The automaker announced in September that it was recalling 3.8 million Toyota and Lexus vehicles because of a defect that may cause floor mats to jam accelerator pedals. The company later recalled vehicles over defects involving the pedals themselves.

All the class actions and most of the individual lawsuits were filed after September, when Toyota began the first of several recalls.

Selna appointed as co-lead counsels for the economic loss plaintiffs Steve Berman at Hagens Berman Sobol Shapiro LLP in Seattle, Marc M. Seltzer at Susman Godfrey LLP in Los Angeles and Frank Pitre at Cotchett Pitre & McCarthy in Burlingame, Calif.

He appointed Elizabeth Cabraser at Lieff Cabraser Heimann & Bernstein LLP in San Francisco and Mark P. Robinson Jr. at Robinson Calcagnie & Robinson in Newport Beach, Calif., as co-leads for personal injury and death cases. Cabraser's firm has filed at least 20 lawsuits against Toyota claiming deaths or injuries caused by unintended acceleration incidents, and Robinson has won multiple million-dollar verdicts against automakers.

Alan Ohnsman in Los Angeles and Bill Callahan in San Diego contributed to this report.

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Nashville People in Business

Deborah Wells Rowe, associate professor of early childhood education at Vanderbilt University's Peabody College, has won the International Reading Association's Dina Feitelson Research Award.
Gresham, Smith and Partners, a design and engineering firm, has made the following new hires and promotions:

DeeDee Bass, project accounting operations manager in corporate services; T.J. Carr, a designer in the infrastructure division; and Joe Cotter, director of information technology in the corporate services division; Glenn Davis, environmental graphic designer; Rob Hamby, project architect in the health-care division, were all named associates.

John Houghton, senior planner in infrastructure; Sandy Layne-Sclafani, senior engineer in infrastructure; Greg Sanford, an environmental engineer; Wes Stanton, a roadway design technician; Ken Stewart, an environmental engineer; and Martin Stoffel, a senior mechanical designer, were all named associates.

Financial services

Cheryl Taylor, a five-year veteran of Fifth Third Bank, has been promoted to assistant vice president and area sales manager of the Fifth Third Mortgage Department.

Bella Briggs has joined Fifth Third Mortgage as a mortgage loan originator.

Todd Brannon and Chris Hutchinson have joined Merrill Lynch's Private Client Group at the Cool Springs office.

Jeff Merry has been named senior vice president/chief financial officer for Volunteer Corporate Credit Union.

Jeff McGruder has been promoted to business banking sales manager for Regions Bank in southern Middle Tennessee.

Government

Dalya Qualls has been named public information officer for the Tennessee Department of Public Safety.

Health care

Amy Peterson has joined PivotHealth LLC as senior coding and compliance specialist. She has more than 10 years' experience in the health-care industry.

Eric Russell has been named director of implementation for PivotHealth LLC, a physician practice management and services company based in Nashville. He had been senior application specialist for Achillean Solutions Inc.

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

Massachusetts investigation targets banks

Goldman Sachs Group Inc. and JPMorgan Chase & Co. are among 10 banks Massachusetts is targeting in a probe of trading of municipal credit default swaps, according to the office of Secretary of State William Galvin.
The state's securities division sent letters last week to 10 underwriters of municipal bonds, asking them to detail their trading of credit default swaps linked to state and local government bonds they've underwritten in Massachusetts since 2003.

The other banks are: Morgan Stanley, Citigroup Inc., Deutsche Bank AG, Wells Fargo & Co., Barclays PLC, UBS AG, and both Merrill Lynch and its parent, Bank of America Corp., according to Michael Maresco, assistant secretary of state.

Bank of America will "work with Massachusetts officials to provide the information they need," said Bill Halldin, a spokesman for the Charlotte, N.C.-based company.

Understanding Credit Scores and ReportsRegulators close seven banks

Government shuts down 4 failing banks

WASHINGTON — Regulators on Friday shut down Midwest Bank and Trust Co. in Elmwood Park, Ill., as well as three smaller banks in Georgia, Michigan and Missouri, to bring the number of U.S. bank failures this year to 72.
The Federal Deposit Insurance Corp. took over Midwest Bank and Trust, which had about $2.4 billion in deposits and $3.2 billion in assets.

FirstMerit Bank, N.A., of Akron, Ohio, agreed to assume all the deposits of Midwest Bank and Trust and essentially all the assets.

Midwest Bank and Trust had 23 branches. FirstMerit is a division of FirstMerit Corp. According to its website, FirstMerit Bank has 186 offices in Ohio, Pennsylvania and Illinois.

The FDIC and Firstmerit Bank agreed to share losses on about $2.3 billion of Midwest Bank and Trust assets. The move is expected to cost the deposit insurance fund about $216.4 million.

The other banks the FDIC took over were:

• New Liberty Bank, based in Plymouth, Mich. The bank had about $101.8 million in deposits and $109.1 million in assets. Bank of Ann Arbor in Ann Arbor, Mich., agreed to acquire the deposits and nearly all of its assets. New Liberty Bank had one branch.

• Southwest Community Bank, based in Springfield, Mo. It had deposits of about $102.5 million and $96.6 million in assets. Simmons First National Bank of Pine Bluff, Ark., will acquire the deposits of Southwest Community Bank and essentially all of its assets. Southwest Community Bank had one branch.

• Satilla Community Bank, based in Saint Marys, Ga.

It had about $134 million in deposits and $135.7 million in assets. Ameris Bank, based in Moultrie, Ga., agreed to acquire the bank's deposits and nearly all of its assets. Satilla Community Bank had one branch.

Satilla Community Bank was the eighth bank to fail this year in Georgia, one of the states where the meltdown in the real estate market brought an avalanche of soured mortgage loans. There were 25 bank failures in Georgia last year, more than in any other state. Also high on the list are California, Florida and Illinois.

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Can You Feel the Optimism Shift in Builder Mentality?Regulators close seven banks

O'Charley's stock plummets

It was a rough week for the Nashville-based casual dining chain O'Charley's, at least on Wall Street.
In the past two days, its stock fell 23 percent after weak first-quarter earnings that surprised stock analysts and called into question the company's latest strategy for growth. The stock fell $2.18 a share over two days of trading, closing at $7.12 on Friday.

O'Charley's reported a loss of $4.3 million, or 21 cents a share, for the first quarter after a push to reduce prices didn't pay dividends.

The casual chain, which faces stiff competition from other restaurants of a similar ilk, hoped to draw more customers with lower-priced entrees, but once at the table O'Charley's diners didn't spend as much on side items and drinks.

CEO Jeffrey Warne said people shunned appetizers, drinks and desserts, which the company had hoped would help balance out its lower-priced strategy for the main course. Profit margins took a hit.

Revenue fell 7 percent to $271.2 million from $291.4 million in last year's first quarter. The quarter was far worse than most Wall Street analysts had expected.

O'Charley's declined to project revenue and earnings for the year ahead, sending shares plummeting.

Revenue at O'Charley's restaurants open at least a year fell 6.7 percent, with a 1.2 percent decline in the number of guests and a 5.6 percent drop in their average spending. That's a key figure for because it measures existing business rather than sales from new locations.

The Associated Press contributed to this story.

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Nissan aims to lower cost of Leaf battery

Nissan Motor Co., which will start selling its Leaf electric car this year, aims to cut the cost of the vehicle's lithium-ion battery pack to less than $370 per kilowatt-hour to make a profit from the model.
The lithium-ion battery, which stores 24 kilowatt-hours of energy, is the most expensive component of the Leaf, which will sell for $32,780 in the U.S. before government incentives for consumers.

Nissan is introducing the Leaf in response to government emissions rules and potentially higher oil prices, among other reasons.

Nissan CEO Carlos Ghosn said earlier this week that he aims to have capacity to build 500,000 electric cars a year by 2012. He estimates demand will reach 10 percent of the global car market by 2020.

Other forecasts are lower. Electric-drive vehicles will amount to no more than 1 percent of the global market by 2020, said Menahem Anderman, president of Advanced Automotive Batteries, a consulting firm based in Oregon House, Calif.

This follows other estimates, including one by the Boston Consulting Group, that are far lower than Nissan's. Anderman says lithium-ion batteries are going to cost much more and perform more poorly than Nissan and other carmakers assume.

After a $7,500 federal tax credit, the all-electric car will cost about $25,280 in the U.S. Besides Tennessee, other states that will get the Leaf first include Arizona, California, Oregon and Washington. A nationwide rollout will occur during 2011, with additional markets added each month.

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Lost iPhone sparks debate over ethics

SAN FRANCISCO — Brian Hogan's world closed in fast almost as soon as he sold the next-generation iPhone he found in a Silicon Valley bar to a popular technology website for a stack of $100 bills, according to court documents released Friday.
By April 19, Hogan's roommate had tipped off investigators that he was at the center of the drama, Apple's top lawyers were meeting with police to press for criminal charges and Steve Jobs was demanding the iPhone's return.

The ordeal has set off ethics debates in journalism and law enforcement circles while Hogan and a website editor are now at the center of a criminal investigation that has been rife with speculation but devoid of many facts — until now.

On Friday, San Mateo Superior Court Judge Clifford Cretan ordered unsealed a 10-page sworn statement with details written by San Mateo Sheriff's Detective Matthew Broad to obtain a warrant to search the car and home of Jason Chen, a Gizmodo.com editor. Broad's statement was used to obtain a search warrant for Chen's home and car.

According to the statement, the saga began March 25, when Apple engineer Robert "Gray" Powell left the iPhone prototype in the bar area of Redwood City's Gourmet Haus Staud restaurant.

It said Gizmodo paid Hogan $5,000 for the device, cracked it open and posted images of it on April 20 despite a phone call from Jobs the day before demanding website editors return the gadget. Gizmodo promised Hogan an additional $3,500 bonus if Apple formally unveiled the device by July, according to Broad.

Chen is under investigation for theft, receiving stolen property and damaging property, according to the affidavit. The affidavit also suggests Hogan and a third roommate, Thomas Warner, also may face criminal charges, and alleges the two panicked and attempted to hide evidence when they caught wind of the criminal investigation.

Nobody has been charged with any crime,

"The events have taken on a life of their own," said Jeff Bornstein, Hogan's attorney. "He thought it was dumb luck that he stumbled on to something valuable, and he regrets not doing more to return it."

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Nashville People in Business

Gene Whittle has joined Reliant Bank as chief credit officer after a stint at Avenue Bank, where he held the same title.
Whittle helped establish the credit functions of Avenue Bank when it opened in 2007. Whittle also has held various jobs with Regions Bank, including credit risk director at its headquarters in Birmingham, Ala.

E-mail people@tennessean.com with news of hirings, awards and promotions. Include previous title and last place of employment. Sending a photo? We use JPG files with a resolution of 200 dpi sized 3 by 5 inches.

Job losses, bailout fuel noisy crowd marching on Wall StreetLandlords Get Help With Managing Rentals

Another possible iPhone prototype pops up

HANOI, Vietnam — This time it's not a crazy story about a guy who left a phone in a Silicon Valley bar. The latest clamor over a possible next-generation iPhone prototype has erupted in an unlikely place — Vietnam.
Mobile phone accessory salesman Tran Manh Hiep rushed to a cafe in southern Ho Chi Minh City on Wednesday when word on the street spread that someone was there flashing the newest iPhone.

Hiep said he inspected the device, recorded it and posted the video on the Tinhte.com forum website, for which he is an administrator.

"It's a real iPhone because when I plugged it into a Mac, it recognized it as an Apple product," Hiep said Thursday, declining to give any details about the phone's owner.

The video could still be accessed on his Vietnamese website, creating much chatter. The iPhone looks similar to one found in a Silicon Valley bar recently. That one was sold to Gizmodo.com, a gadget blog, in April for $5,000.

"It looks almost exactly the same as the one that appeared on Gizmodo's website," Hiep said by telephone. "But it looks newer and has no screws."

Some Vietnamese messages posted on Hiep's forum questioned the authenticity of the phone, suggesting that it may be a fake Chinese model. Many counterfeit phones make their way into Vietnam, but Hiep said he's convinced this is the real deal.

He said he does not know how the man got the iPhone, but that the owner is also a Vietnamese mobile phone dealer.

Apple Inc. is notoriously secretive about unfinished products. Analysts expect a new model in June.

Business briefs: Renal Advantage to refinance debt

Renal Advantage Inc., a closely held provider of outpatient dialysis services part-owned by Welsh, Carson, Anderson & Stowe, is seeking $305 million of bank debt to pay a dividend and refinance debt.
Deutsche Bank AG, Barclays Plc, Bank of America Corp. and General Electric Co.'s financing unit are arranging a six-year, $245 million term loan and a $60 million revolving credit line for the Brentwood-based company.

Welsh, Carson invested in the company in 2005. Citigroup Inc. arranged Renal Advantage's $50 million revolving credit line maturing in October and $205 million term loan due October 2012, according to data compiled by Bloomberg. In a revolving credit facility, money can be borrowed again once it's repaid; in a term loan, it can't.

The term loan had an interest rate 2.5 percentage points more than the London interbank offered rate (LIBOR) when it was arranged in 2005. At the time, the revolver had a margin of 3 percentage points over LIBOR, the rate banks charge to lend to each other.

— BLOOMBERG NEWS

Mortgage rates lowest of the year

Mortgage rates fell this week to the lowest level of the year. The average rate on a 30-year fixed rate mortgage dipped to 4.93 percent this week from 5 percent a week earlier, Freddie Mac said Thursday. It was the lowest level since mid-December, when rates averaged 4.81 percent.

Freddie Mac collects mortgage rates on Monday through Wednesday of each week from lenders around the country. Rates often fluctuate significantly, even within a given day, often tracking the interest rate paid on long-term Treasury bonds.

— ASSOCIATED PRESS

Mortgage Rates Ease a Bit This WeekLocal business briefs: Petra Capital completes investment

Despite critics, prison operator CCA says times are good

Erik Townsend says he prefers the Arizona prison where he's serving 15 years for robbery to a California facility where he was until August. For one thing, he was getting just two hot meals a day at the other prison.
"We get three hots here," said the 40-year-old Townsend, while taking a quick break from sweeping the yard at La Palma Correctional Center in Eloy, Ariz., a desert town halfway between Phoenix and Tucson. "It's all right. It's decent."

La Palma, which houses 2,900 convicts from California, is one of 65 facilities operated by Corrections Corporation of America, the Nashville-based private company that gets government contracts to build and run prisons for state and federal authorities.

CCA, which held its annual shareholders' meeting in Nashville on Thursday, has become the largest private-prison operator in the U.S. as states from California to Florida turn to corporate America to punish felons and hold lesser offenders, amid iffy tax revenues and tight budgets.

Despite such financial pressures, company officials are optimistic about their business's long-term prospects.

CCA reported $155 million in earnings last year. Net income has risen in each of the past four years. For 2010, the company forecasts per-share earnings of $1.16 to $1.26, down from $1.32 last year.

Recent contracts have been tied more to federal prison clients than individual states, although CEO Damon Hininger, who began his career as a prison guard, thinks the fact that states have less money to build jails puts CCA in a sweet spot as more construction gets outsourced to private companies.

"We think that is very favorable for the company and for the industry," he said.

Critics, who see a conflict between making profits and providing adequate care to prisoners, aren't so sure.

"Lobbyists for CCA want to make sure they keep their prisons full. It's a question of how you delegate the really ferocious powers of the state to a private enterprise," said Mark A.R. Kleiman, a University of California, Los Angeles professor and author of When Brute Force Fails: How to Have Less Crime and Less Punishment .

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Out-of-town buses help carry load for MTA

City buses from Cincinnati and Memphis are pulling up to Nashville stops.
"Go ahead and get on it," said Paul Ballard, head of the transit operations. "It won't take them to Cincinnati or Memphis. We're just borrowing them."

Metro Transit Authority has borrowed 30 buses and 25 vans to get its waterlogged system rolling again after floodwaters engulfed its headquarters on the Cumberland River near downtown on May 2.

Bus service shut down for almost four days, and then started limited runs. On Monday, buses began running the less frequent Saturday schedule on 25 routes. That is 60 buses rolling rather than 147 on a weekday. Some express routes are suspended as well as some service to magnet schools.

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"The biggest problems are where we don't have weekend service, like Bellevue, MetroCenter and Lebanon Road in Hermitage," Ballard said.

Fares will be free until regular service resumes.

Ballard hopes to get back to weekday service by the end of next week, if MTA can re-establish its bus dispatch and fueling at its Nestor Street headquarters.

Floodwaters gushed into the Nestor Street buildings and lots, both from the Cumberland and from rain runoff pouring in on Driftwood Street. MTA employees scrambled to drive the fleet to safety.

"Seventy-five private cars flooded," Ballard said. "Employees got the buses out and sacrificed their own cars."

Half of the AccessRide fleet was lost. The vans provide door-to-door service for those with disabilities.

MTA is using a $3.5 million federal grant to buy 35 new vans, which will arrive within about 10 weeks, Ballard said. AccessRide clients can book appointments now for emergencies and work.

Thirty-two of its large buses were caught in the floodwaters. Twenty-two will be repaired; the rest were due to be replaced anyway this summer. The new hybrid diesel-electric buses weren't damaged.

Ballard anticipates federal transportation money and FEMA aid will absorb most of the costs to repair the fleet and the headquarters and garage.

"We'll be at full strength by August when school reopens," Ballard said. "Things are turning out a whole lot better than we thought last Sunday when we were underwater."

Landlords Get Help With Managing RentalsNashville car rental agencies ’sold out’ after flood

Nashville Entrepreneur Center names Michael Burcham as president

A local entrepreneur and former health-care executive who is now a faculty member at Vanderbilt's Owen Graduate School of Management has been named president of the Nashville Entrepreneur Center.
Michael R. Burcham will take over the reins of the new center on July 5, once his responsibilities at Vanderbilt wind down, said Joe Kustelski, spokesman for the center.

Burcham, who has been on the group's board, will lead the center as it assembles a staff and budget and works to find a physical location for the center. He also will be implementing a "100-day" plan, Kustelski said.

"The creative energy and business talent in this city is just amazing," Burcham said in a statement. "I look forward to working with the people of this great community to help turn ideas into successful businesses."

Burcham is a clinical faculty member at Owen, where he teaches entrepreneur classes and helps lead the Summer Business Institute, a monthlong program for college students and recent graduates.

"Under his leadership, we are confident the Entrepreneur Center will be a strong catalyst for entrepreneurial activity in our city," said the Entrepreneur Center's chairman, Clayton McWhorter, founder of Clayton Associates LLC.

Formerly, Burcham was president of ParadigmHealth, an integrator of disease and care management solutions, from 2001 to 2007; professor of managerial studies at Vanderbilt University from 2003 to 2007; president of Theraphysics Corp. from 1993 to 2001; vice president of managed care at HCA Centennial Medical Center from 1987 to 1992; and a regional coordinator of physical therapy services at National HealthCorp LP from 1983 to 1987.

He received a doctorate in health administration from the Medical University of South Carolina, a master's in business administration from Belmont University and a bachelor's degree in physical therapy from the University of Mississippi Medical Center.

"Michael's experience and passion for entrepreneurship brings new energy and a credible voice to help lead this charge," said board member Mike Shmerling, chairman of Choice Food Group and XMi Holdings Inc.

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

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Nashville car rental agencies 'sold out' after flood

Finding a rental car anywhere in Nashville on Wednesday was nearly impossible, because most rental agencies had to turn away customers after a barrage of business from residents whose cars were lost or damaged by floodwaters.
"We have none today, but we expect to have some Friday," said Chris Wroblewski at the Thrifty Car Rental agency at Nashville International Airport. "But it's hard to find a car without a reservation."

Enterprise Rent-A-Car showed on its website Wednesday that all 12 of its Nashville-area locations were "sold out." But spokesman Ned Maniscalco in St. Louis said his follow-up check found a few vehicles available.

"We have been challenged because not only do we have customers who lost cars in the flood, but some of our locations lost vehicles, too," he said.

RelatedNashville Flood 2010Aerial photos of damage - May 11Complete coverage of Nashville floodingFlood of 2010 resource guide

Several major rental agencies have been sending some customers to the locally based Tennessee Car and Van Rental, but regional manager Bill Bevans said he had to put customers in vans because he was out of cars.

"I've had Enterprise call me, and Hertz and Avis are sending people here, too," Bevans said. "When they're sending them to us, there are no cars in Nashville. We're out of cars, too. I had a man come in today and rent a 12-passenger van just so he could get around town."

It also has been difficult for travelers arriving at the airport without reservations. Usually, except in the summer months, reservations are not needed at the airport, unless there is some special event going on, but the flood has changed that for the time being, rental agents said.

Even the used-car rental business has been super busy, said B&C Rentals in Donelson, where manager Karen Scherer reported "nothing available" Wednesday.

"Everything has been fully booked since last week because of the flood, and we're not even getting business from the insurance companies," she said.

Formerly a Rent-A-Wreck franchise, B&C also rents Budget trucks and Cruise America recreational vehicles.

"The Budget truck business is very good, especially since two other locations, in Nashville and Franklin, were underwater and lost most of their trucks," she said. "People are renting ours to haul off trash from flooded homes and businesses."

Some customers want to rent RVs to live in while their homes are under repair.

But Scherer said B&C has had to turn a lot of those people away.

"We can't do long-term rentals because we're booked up for Bonnaroo," she said, referring to the music festival set for June near Manchester. "All of our RVs have been reserved for that event since last summer."

A search of the Travelocity website found only cars from Hertz available Wednesday afternoon.

The website Breezenet.com, which books rentals at discount rates through all of the major companies, showed no cars for Wednesday or today in Nashville.

Reservations were available for Friday, though.

Contact Tennessean business writer G. Chambers Williams III at 615-259-8076 or cwilliams1@tennessean.com.

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Stock market's sell-off still confounds regulators

WASHINGTON — The head of the Securities and Exchange Commission told a congressional panel Tuesday that regulators need more time to figure out what caused last week's stock market plunge.
SEC Chairman Mary Schapiro said her agency has yet to pinpoint the reason for the sell-off that sent the Dow Jones industrial average falling nearly 1,000 points in less than half an hour.

"We will move as quickly as we can, but I can't give you a final date," Schapiro said at a hearing examining the historic market drop.

Some causes have been ruled out, she said. The agency's review found no evidence of terrorist activity or computer hacking. There also was no evidence "that this was done in any kind of a malicious way," Schapiro said.

Schapiro said establishing a stronger system for slowing trading during periods of high volatility would help.

Six major U.S. securities exchanges on Monday agreed in principle to a uniform system of "circuit breakers," which could slow trading during sharp market swings.

Most of the 50 U.S. exchanges regulate themselves and design their own tools for slowing or halting trading.

Reforms needed

Lawmakers and Schapiro acknowledge that the plunge has undermined confidence in the financial markets.

"We must quickly analyze what happened and embrace reforms in order to restore market integrity and promote investor confidence," said Rep. Paul Kanjorski, D-Pa., chairman of the House Financial Services subcommittee that oversees market regulation.

Last week's market freefall highlighted the growing complexity and diversity of the securities market. Upstart electronic trading platforms now compete with the traditional exchanges, and powerful computers give traders a split-second edge in buying or selling stocks.

The plunge also underscored the growing importance of options trading, which allows investors to trade based on expectations for a particular stock, or group of stocks, to rise or fall, rather than simply trading the underlying stock.

"The interconnections among markets ... have grown immensely more complex over the past few years," Schapiro told the subcommittee. "Orders in one stock directed to one market can now ricochet to other markets, and trigger (mathematical) executions in other stocks and derivatives in milliseconds."

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Acting quickly can salvage beloved heirlooms

When Mary and Dennis Goins got home after working separate overnight shifts, the married police officers took one look at the water lapping at their front doorstep and decided to get out fast.
Mary grabbed a few family photos, but the water was quicker than they were. Within minutes, it had risen to their waists. They swam for it, but lost photos while managing to get to higher ground.

When they returned 48 hours later, their Newsom Station home was a wreck from the floodwaters. The biggest blows: baby pictures of Mary's son, John Patrick Helmontaller, who had died in an accident at the age of 21, were found badly damaged. A 1952 wedding album that belonged to Mary's long-deceased parents was ripped and smeared. A Tennessean engagement announcement carefully preserved for more than 50 years had turned to pulp.

"It was heartbreak upon heartbreak," said Mary's sister, Joan King, who is taking charge of what could be a complicated fight to save or restore some heirlooms.

RelatedNashville Flood 2010Weekend After the FloodComplete coverage of Nashville flooding Flood of 2010 resource guidePDF: Salvaging a flood-damaged home

Many families have returned home in the past week to find valued heirlooms, photographs and artwork swollen with water or covered in mud or silt. They're grappling with whether they can afford to hire restoration experts to save some of the items, or they're taking steps on their own to bring possessions back to life.

Restoration experts in the Nashville area say calls for their assistance have started to trickle in, but they're not overwhelmed with repair requests yet.

With flood victims focused at first on securing homes, tearing out wet carpeting or replacing ruined drywall, dealing with damaged art or soiled furnishings may have taken a backseat to more pressing needs.

Taking immediate action, however, can mean the difference between preserving or losing beloved photos, paper documents and antiques, said DiAnna Tindell, who owns Tindell's Restoration Schools and Studio.

"I know people are tired and at their wit's end and not going to be thinking clearly," Tindell said. "But even if people don't have time or money right now, they can save their valuables."

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Nashville car salesman gets 51 months in prison for $2.7M fraud

A former Nashville car salesman has been sentenced to 51 months in prison in a $2.7 million bank fraud scheme.
According to a news release from the U.S. Attorney's Office for the Middle District of Tennessee, Andrew Crutcher, 53, got millions of dollars in checks from people who thought they were providing capital for car sales that he claimed to be brokering.

In reality, Crutcher used the money for personal expenses and to repay some investors who believed they were reaping the profits of their investment.

The scheme resulted in a loss of more than $980,000 to Bank of Nashville and about $1.8 million to 10 investors between May 2005 and February 2006.

Crutcher pleaded guilty in federal court in October 2009.

In addition to jail time, he will be required to pay $2.7 million in restitution.

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Tyson returns to profitability

Meat producer Tyson Foods Inc. returned to profitability in its second quarter on improvements in its chicken business and higher beef and pork revenue.
The company said it expects the trends to continue as demand picks up for exports and in restaurants at home.

Results beat analyst expectations, and the company said the second half of the year should be strong, too, as pricing continues to improve and demand keeps increasing as people start going to restaurants and eating more meat again.

The industry has been working through a downturn brought on by a combination of high production costs — because of volatile commodities prices — and slumping demand as shoppers pulled back on spending. That crimped profit margins and forced companies to cut production to raise prices and make more money, which is happening now for Tyson.

For pork and beef, which are typically more profitable, the recovery is well under way, particularly in beef.

Tyson — based in Springdale, Ark. — earned $156 million, or 42 cents a share, for the three months ended April 3. That reverses a net loss of $119 million, or 32 cents a share, a year earlier.

Revenue climbed 10 percent to $6.92 billion from $6.31 billion.

Dark chicken hits highs

Tyson's chicken division, which has been hit by oversupply and consumer spending cuts, reported $2.49 billion in revenue, compared with $2.36 billion a year ago, on increased average prices. Grain costs rose by $19 million in the quarter.

The company noted that dark meat chicken is selling at highs never seen before in the U.S. Spokesman Gary Mickelson said the company is producing a wider variety of dark meat products, such as boneless thigh meat.

Beef revenue climbed to $2.76 billion from $2.42 billion, helped by higher export sales volume and better operating margins. For pork, revenue increased to $929 million from $844 million partly on improved operating margins.

Smith said the company is seeing more demand from restaurants, particularly for expensive items such as beef tenderloin. Casual dining restaurants are a major outlet for that cut, and so seeing it rebound shows people are becoming more confident in spending money in restaurants, he said.

The prepared foods unit also posted better revenue, as sales climbed to $734 million from $684 million on improved sales volume and increased average prices.

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