Saturday, October 30, 2010

GAC promotes Sarah Trahern to general manager

The Great American Country TV network is promoting Sarah Trahern to general manager and senior vice president, effective immediately. As general manager, reporting to GAC President Ed Hardy, she will have broader responsibilities with strategic planning as well as a bigger role in day-to-day management.
"Sarah has demonstrated strong leadership, solid business acumen and incredible resourcefulness while contributing significantly to the growth of the GAC," Hardy said. "To those in the music and cable TV industries, her name has become almost synonymous with the GAC brand."

Trahern joined the network five years ago, and has created concepts such as exclusive music specials featuring top country artists.

Trahern has more than 20 years of experience in cable, with 15 of those producing or overseeing production of country music programs.


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Nashville People in BusinessManaging Solo

Tennessee Commerce has $1.5M loss, bad loan

Franklin-based business bank Tennessee Commerce Bancorp lost $1.5 million in the third quarter, the company said Friday, and the bank also reported one bad $17.3 million loan to an undisclosed client.
The 16-cents-a-share loss was a surprise to stock analysts, who had expected on average a profit of 12 cents a share, according to Thomson Financial.

The bank's stock lost 19 cents a share, or nearly 4.4 percent, and closed at $4.17 a share in trading Friday on the Nasdaq.

News of the poor-performing quarter was a change from previous quarters of the past year, in which Tennessee Commerce had managed to squeeze out a profit. A year ago, Tennessee Commerce made $1.2 million after paying preferred dividends.

The bank's president and CEO, Mike Sapp, blamed the latest quarter's results on "nonrecurring" items such as the large bad loan. Nonperforming assets grew by more than $12 million from the previous quarter to $86.5 million, the bank said. Income from fees and interest grew during the quarter.

"While our customers remain cautious, we are optimistic that earnings momentum will grow in a more straight-line manner going forward,'' Sapp said in a statement.

Contact business reporter Naomi Snyder at 615-259-8284

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First Horizon turns profit in third quarterUnderwater? Alternatives to Walking Away

Acquisition of Ky. firm will expand Infrastructure Corporation of America's scope

Infrastructure Corporation of America said it has acquired a Paducah, Ky.-based engineering services company to expand beyond maintaining roadways, bridges and welcome centers into planning and design of such projects.
The acquisition of Florence & Hutcheson doubles Brentwood-based ICA to 600 employees and expands its geographic reach.

"Combining these two companies will generate a great amount of synergy," said Butch Eley, chief executive of ICA.

Financial terms weren't disclosed. Florence & Hutcheson is now a wholly owned subsidiary of ICA, which through the deal gains a presence in new markets such as Georgia and Alabama.

Currently, ICA provides its maintenance services and highway cleanup work to governmental and transportation agencies in Florida, Virginia, Texas and South Carolina. It also works after hurricanes and major storms on emergency cleanup in some cases.

"By understanding the design and construction elements of a project, it will allow us to better provide a longer-term and more comprehensive maintenance solution," said David Rader, executive vice president at ICA.

The senior management team at Florence & Hutcheson will remain in place.

Signal Hill Capital Group LLC served as ICA's financial adviser in the purchase. Regions Business Capital and Triangle Capital Corp. provided the financing.

Florence & Hutcheson has offices in 18 cities in the Midwest and Southeast and provides planning, design-build, construction engineering and other related services.

Reach Getahn Ward at 615-726-5968

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CBay files to sell shares in U.S., lists Franklin HQReal Estate Outlook: Small Gains

Anita Wadhwani: More colleges offer programs on business side of music

Billboard , the music industry's biggest, oldest trade publication, this week issued a first-ever guide to music business programs at colleges and universities around the country.
"It used to be that the school of hard knocks was enough to land you a gig in the music business," reads Billboard's introduction to "Schools of Rock," an overview of two dozen of the nation's best private and public universities that have established music business programs or separate colleges devoted to the industry.

That's no longer the case, according to editors of the 116-year-old weekly magazine.

The rollout of the annual guide is a sign of the times in an industry not known for having long or deep roots in academia.

RelatedBillboard's Best Schools of Music Business

The number of universities offering programs or establishing separate colleges devoted to the study of the business side of music has grown exponentially, according to John Kellogg, president of the Music and Entertainment Industry Educators Association. The association itself is a fast-expanding collection of 114 music business schools whose membership is 40 percent larger today than four years ago.

"It's part of a recognition that a new generation of musicians are becoming entrepreneurs, managing their own careers and creating their own, new middle-class lives being musicians," Kellogg said.

It also appears to be a recognition that the flagging music industry needs fresh, professional talent with business and technical acumen, rather than too many employees who are expected to learn on the job, educators say.

Belmont program featured

"Coming out of a program like ours, you have a certain baseline knowledge you can't learn on the street," said Dean Wesley Bulla of the Mike Curb College of Entertainment and Music Business at Belmont University. "In a lot of cases, our students are way ahead in the industry."

Belmont's program, one of four prominently featured in Billboard 's guide (one from each geographical region) is atypical. It grew out of a program in the university's business school before becoming its own college in 2003.

(2 of 2)

Underwater? Alternatives to Walking AwayAnita Wadhwani: Inclusive deals give record labels chance to make up revenue

Fox Super Bowl ads sell out fast

NEW YORK — Super Bowl television commercials already are a sellout this year.
Fox Sports said Friday it has sold out all of the commercial airtime available for Super Bowl XLV. The game takes place on Feb. 6 in Arlington, Texas.

This is months earlier than commercial time in the advertising world's biggest showcase sold out last year.

"The economy is improving and some advertisers that haven't been in the game in the past are back," said Fox spokesman Lou D'Ermilio. "That combination will certainly bode well."

PepsiCo is putting its Pepsi brand back into the game after sitting out last year. Automaker General Motors also returns after sitting out the last two years.

Fox declined to say how much ads cost. Last year's ads airing on CBS ranged from $2.5 million to $3 million per 30-second slot.

Ad sales for the Super Bowl, television's most expensive night of advertising, started off as usual this spring, but activity picked up right away, much faster than usual, D'Ermilio said.

Usually, there's commercial time available the week of the game, he said. Networks do that so they can charge higher prices to last-minute buyers.

D'Ermilio said sales were strong the last time the network had the game, in 2008, just as the economy started to weaken, but the demand was nowhere near what it was this year. He also said ads during the pregame show are selling quickly.

Anheuser-Busch InBev, long the dominant advertiser in the game, will again be back this year. Internet domain company will also return.

PepsiCo announced last month it was bringing its cola brand back to the game. The company is airing three consumer-generated ads each for Pepsi MAX and its Doritos snack brand.

GM will market its Chevrolet brand.

The sellout was first reported by trade publication Broadcasting & Cable .

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Real Estate Outlook: Small GainsVerizon, AT&T to sell Apple’s iPad

Scripps TV unit to relocate HQ to Knoxville

Scripps Networks Interactive Inc. has picked Knoxville as its official headquarters, in effect recognizing the city that already has the largest chunk of the company's operations.
That includes operations for the HGTV and DIY networks. About 850 of the company's 1,950 employees work in Knoxville.

The company previously was based in Cincinnati, but the move won't mean much in terms of added employment. Top executives will continue to maintain dual offices in Cincinnati and Knoxville. In March, Scripps opened a 150,000-square-foot building on the west side of Knoxville, consolidating operations that had been scattered among three buildings. About 40 people work for the company at the Great American Country (GAC) network in Nashville.

E.W. Scripps continues to be based in Cincinnati.


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Managing SoloCBay files to sell shares in U.S., lists Franklin HQ

Thursday, October 28, 2010

Comcast drives growth with pricier bundles

NEW YORK — Comcast Corp., the country's biggest cable TV company, continues to generate more money by attracting customers to pricier bundles of TV, Internet and phone service — even as a sluggish economy hampers efforts to sign up new subscribers.
Comcast released third-quarter results Wednesday that showed its revenue is growing at its fastest clip since the fourth quarter of 2008.

Net income dipped 8 percent, but only because of one-time costs, including legal bills and other expenses related to its pending takeover of NBC Universal. Comcast is hoping to win federal approval for its purchase of a controlling stake in the entertainment company from General Electric Co. by the end of the year.

Comcast shares rose 75 cents, or 3.8 percent, to $20.39 in midday trading Wednesday.

"They performed well in a difficult environment," Kaufman Bros. analyst Todd Mitchell said.

The company faces two sets of obstacles in trying to win new customers.

First, a depressed housing market and high unemployment mean fewer people are moving to new homes and adding new cable hookups.

Growth challenges

Second, Comcast is competing with an array of satellite and phone companies providing television in a market that is basically mature. Most households in the U.S. already have some kind of subscription TV service, so the search for new customers comes down to who can offer a package enticing enough to get people to switch.

At the same time Comcast's expenses are rising. The fees that it pays ESPN, MTV and other cable channels continue to increase. And over the past few years broadcast stations that used to allow cable companies to retransmit network television for free have been asking for fees as well, often resulting in nasty public feuds; Cablevision Systems Corp. and Fox remain locked in a fee dispute that has left the network off lineups in the New York area since Oct. 16.

Comcast paid $1.85 billion for programming in the third quarter, up 5 percent from a year ago.

That contributed to a 7 percent increase in overall operating expenses to $3.79 billion, from $3.53 billion.

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Tractor Supply income soarsReal Estate Outlook: Small Gains

Nashville People in Business

The Country Music Association announced new hires:

Greg Fuson as marketing research director;
Ken Sanderson as senior manager of IT;

Jody Pace as staff accountant for finance and administration;

Veronica Costilla as finance and administration coordinator;

Eric Jensen as marketing coordinator for strategic marketing;

Marty Filogamo as junior web designer/production coordinator in the strategic marketing department.

Also, Brandi Simms was promoted to senior manager for membership and balloting, and Betsy Walker was promoted to senior coordinator of member relations and services.

Real estate

Sharon Brugman joined Benchmark Realty LLC as an agent.

The Tennessee Association of Realtors named Crye-Leike's Margaret Dixon as its Realtor of the Year.

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Managing SoloTailor rewards to individual workers for best results

Berkshire Hathaway unit buys Nashville beverage distributor

Nashville-based Horizon Wine & Spirits has agreed to be acquired by the McLane Co. of Temple, Texas, and Atlanta-based Empire Distributors, the companies have announced.
The move expands McLane and Empire’s alcoholic-beverage distribution business into Tennessee. Horizon, founded in 1947, also has operations in Chattanooga and says it’s the state’s largest distributor of alcoholic beverages.

McLane, a $30 billion food-service supply company and a unit of Warren Buffet’s Berkshire Hathaway Inc., in April acquired Empire, which distributes alcoholic beverages in Georgia and North Carolina. It was McLane’s first move into the alcoholic-beverage business.

Tommy Bernard, chief executive of Horizon and son of founder Harold “Jobe” Bernard, will remain in charge of the company after the sale is completed, the McLane Co. said.

"McLane and Empire are very excited about our agreement to acquire Horizon and enter the Tennessee market," said David Kahn, Empire’s president. "Tommy Bernard has built one of the finest and most highly respected companies in our industry, and we look forward to providing Tommy our full support and resources to continue Horizon's leadership in the market and to position ourselves for further growth in Tennessee and beyond."

Tennessean business writer G. Chambers Williams III may be reached at 615-259-8076 or

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Managing SoloNashville area to get Verizon 4G by end of year

TN, bankers form partnership for loan fund to kick-start small businesses

Tennessee and bankers across the state are partnering to provide up to $25 million in loans to small businesses in a bid to jump-start access to capital for companies with fewer than 100 employees.
Called the Tennessee Small Business Jobs Opportunity Fund, the initiative begins with a $10 million appropriation from the General Assembly, and a consortium of banks throughout the state will add $15 million to the pot, said Matt Kisber, the state's commissioner of economic and community development.

The loans are available to businesses with fewer than 100 employees and will be used to encourage small businesses to expand and create jobs.

"Access to capital for small businesses has been a key initiative for Governor (Phil) Bredesen and the Tennessee General Assembly," Kisber said. "By continuing to develop programs such as this, we are positively influencing how companies create jobs and grow their businesses in Tennessee."

The program will be administered by Pathway Lending, a nonprofit organization that handles other, similar small-business loan programs that include public and private funding, said Clint Gwin, Pathway's president.

Pathway has started soliciting commitments from banks across the state to participate in the new fund and hopes to have the banks' portion in hand within a year, Gwin said.

Unlike a similar program that Pathway administers, which serves only businesses in rural areas, the new program will make loans available to small businesses in all 95 counties.

Interest charges on loans will be at current market rates, Gwin said.

Pathway loans are for a minimum of $35,000, and some businesses are typically excluded from bank loan portfolios at such small levels, according to the criteria listed on the organization's website,

Not all are eligible

Among those not eligible are restaurants and retail clothing stores, real estate speculators, businesses selling primarily alcohol or cigarettes, trucking companies, gambling operations, financial businesses (such as payday lenders) and sex-oriented businesses.

The purpose of the fund is to help small businesses get moving again as the economy struggles to recover from the recession, said state Rep. Craig Fitzhugh, D-Ripley, who also is a banker.

"Small businesses create the majority of new jobs in our communities, and they are playing a major role in the economic recovery of our state," Fitzhugh said. "We must continue to show our support by finding creative and effective ways to develop resources so that businesses in Tennessee cannot only survive, but thrive."

The loans can be used for flood recovery, as well, said Hank Helton, the senior vice president of Pathway who is in charge of the program.

Reach G. Chambers Williams III at 615-259-8076 or

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Corker pledges to take role in home loan regulationUnderwater? Alternatives to Walking Away

Wednesday, October 27, 2010

Corker pledges to take role in home loan regulation

Speaking to real estate agents, bankers and brokers frustrated with a four-year housing slump, U.S. Sen. Bob Corker, R-Tenn., criticized heavy-handed government regulation and pledged to take a leading role in planning the future of home loan financing.
"Regulators are over-regulating,'' Corker said Tuesday at a housing panel he convened at the downtown Nashville library. "When times are good they get too loose and happy. Then things happen, there are bank failures and they over-regulate. I think that's what happening in Tennessee."

Brokers at the meeting complained of difficulty getting even good borrowers approved for home loans. One complained: "The medicine has been killing the patient."

Corker, a member of the Senate Banking, Housing and Urban Affairs Committee, said he was open to suggestions on how to reform home loan financing, in particular, mortgage giants Fannie Mae and Freddie Mac.

The two entities — now controlled by the government — have cost taxpayers $135 billion and could cost $259 billion through 2013, the Federal Housing Finance Agency projected last week.

That's a cost far greater than the bailout of other financial institutions and the auto industry.

Fannie Mae and Freddie Mac buy loans from lenders, package them and guarantee them for investors, and they have taken heavy losses as foreclosures have mounted during the recession.

"My question is, why is the government involved at all in mortgage loans?'' Corker asked the crowd, which met his question with applause.

Fannie Mae and Freddie Mac grew under Democratic and Republican administrations in the past — and they operated with an implicit government guarantee. But after they were crippled by the weight of bad mortgage loans, the Obama administration and a Congress perhaps reshaped by next Tuesday's fall elections will have to figure out what to do with them.

Corker said the Obama administration's plan to deal with the future of those institutions is due in January and will be a subject of debate for Congress.

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Jobless benefits extension is mired in political bickeringUnderwater? Alternatives to Walking Away

German insurer buys Brentwood's Windsor Health Group

A large German insurer agreed to buy managed-care company Windsor Health Group Inc. of Brentwood for $125 million in cash to expand its presence in the U.S. Medicare market.
Munich Re, also the world's biggest reinsurer, made its bid as size and efficiency become more important to Windsor and other providers of private Medicare plans amid cuts in government reimbursements.

"We'll be better able to absorb reimbursement reductions with greater efficiency and greater size," said Michael D. Bailey, president and chief executive of Windsor Health Plan Inc., Windsor Health Group's largest subsidiary.

Last year, the two companies entered an agreement under which Munich Re provided backup capital to help Windsor meet regulatory requirements.

"They've had a good working relationship, and Munich Re was able to get a good feel for the management team and the business plan," said Michael Devlin, managing partner of Pharos Capital Group, Windsor's largest outside shareholder.

"It makes sense given Munich Re's interest in the United States to bring this in their portfolio of U.S. investments."

In addition to Nashville-based Pharos, other large investors in Windsor include its chairman and chief executive, Philip Hertik; Bailey, the president and CEO of Windsor Health Plan; and Willis E. Jones III, its chief financial officer.

Vanderbilt University Medical Center and venture capital firm Delta Capital Management of Memphis also have small stakes.

Hertik, Bailey and Jones started Windsor in 2000 by acquiring a TennCare health plan from Vanderbilt University Medical Center. The company shifted its focus to the senior market, selling its first Medicare Advantage plan in 2006. Hertik also is a board member, investor and adviser to NeighborMD, a new company opening urgent care clinics that's led by former O'Charley's CEO Greg Burns.

The Windsor-Munich Re transaction is expected to close at the end of the year, pending regulatory approval. Afterward, Windsor will come under control of the German insurer's Munich Health North America Inc. subsidiary.

Over 75,000 members

Windsor provides Medicare Advantage health, prescription drug plans and special needs plans to more than 75,000 members in Alabama, Arkansas, Mississippi, South Carolina and Tennessee. This year, the company expects earnings before interest, taxes, depreciation and amortization of $31 million and gross written premiums of about $420 million.

Munich Re said it plans to finance the purchase price from its existing resources. U.S. investor Warren Buffett recently raised his stake in Munich Re to more than 10 percent, with plans to acquire more.

Getahn Ward covers the business of health care and public companies. Reach him at 615-726-5968 or

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Getahn Ward: Insurer’s exit from TN may put small firms in bind

Vanguard Health Systems will get more time to close acquisition deal

Vanguard Health Systems will have more time to close its acquisition of Detroit Medical Center, whose board on Tuesday voted to extend a purchase agreement through year-end.
The extension would allow the Nashville-based hospital chain more time to complete governmental approvals, the eight-hospital Michigan hospital system said in a statement. The transaction was expected to close by Sunday. Vanguard is yet to get approval from Michigan's attorney general's office for the huge deal.

Detroit Medical is Michigan's largest provider of care to the poor, uninsured and underinsured. Vanguard agreed to pay $417 million and spend $850 million on capital improvements over five years among terms of a sale agreement announced in June.

"All of us are looking forward to completing this process to bring (Detroit Medical Center) into the Vanguard family as soon as possible," said Keith Pitts, vice chairman of Vanguard, in a statement.


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Local business briefs: Community Health Systems expands in S.C.Buyers Interested in Walkability

Monday, October 25, 2010

Companies may weigh dropping health plans

WASHINGTON — The new health-care law wasn't supposed to undercut employer plans that have provided most people in the U.S. with coverage for generations.
But last week a leading manufacturer told workers that their costs will jump, partly because of the law. And Tennessee Gov. Phil Bredesen laid out a scenario in which employers could get out of health care by shifting workers into taxpayer-subsidized insurance markets that open in 2014.

While it's too early to proclaim the demise of job-based coverage, corporate number crunchers are looking at options that could lead to major changes.

"The economics of dropping existing coverage is about to become very attractive to many employers, both public and private," Bredesen said.

That's just not going to happen, White House officials say. "The absolute certainty about the Affordable Care Act is that for many, many employers who cover millions of people, it increases the incentives for them to offer coverage," said Jason Furman, an economic adviser to President Barack Obama.

Yet at least one major employer has shifted a greater share of plan costs to workers, and others are weighing the pros and cons of eventually forcing employees to strike out on their own.

"I don't think you are going to hear anybody publicly say 'We've made a decision to drop insurance,'" said Paul Keckley, executive director of the Deloitte Center for Health Solutions. "What we are hearing in our meetings is, 'We don't want to be the first one to drop benefits, but we would be the fast second.' We are hearing that a lot." Deloitte is a major accounting and consulting firm.

"My conclusion on all of this is that it is a huge roll of the dice," said James Klein, president of the American Benefits Council, which represents big company benefits administrators. "It could work out well and build on the employer-based system, or it could begin to dismantle the employer-based system."

Impact may increase

Employer health benefits have been a middle-class mainstay since World War II, when companies were encouraged to offer health insurance instead of pay raises. About 150 million workers and family members are now covered.

(2 of 3)

Getahn Ward: Insurer’s exit from TN may put small firms in bindReal Estate Outlook: Small Gains

State tourism bureaus use social sites to promote sights

CONCORD, N.H. — Dog sledding without snow?
Karen Tolin knew the concept was a little hard to understand, but she believed a Facebook promotion for her White Mountains dog-sledding business through the state tourism division would help clear it up — and draw some customers during the off-season.

She was right.

Visitors mentioned the August offer when they booked a "rolling" dog sledding tour — in which dogs pull passengers in a wheeled cart, something more common in the West. Tolin combined an excursion discount with a whitewater rafting trip called "Paws and Paddles."

State tourism bureaus, including New Hampshire's, have been aggressively using social networks to promote business and attract visitors with travel packages, itineraries and tips from travelers themselves. Tolin's Muddy Paw Sled Dog Kennel is among those reaping the benefits.

"No one Googles 'dog sledding,' " said Tolin of Gorham, N.H., "so taking advantage of social media in addition to traditional advertising has been a big deal and has gotten the word out and has increased our business in a big way."

Indiana has partnered with Foursquare, a smart-phone application that reveals the user's location, to provide discounts at museums, restaurants and other places through its Leaf Cam foliage-viewing site. Virginia recently won a national award for using Twitter to promote wine tourism. Nearly three-quarters of Michigan's Facebook fans learned from fellow travelers about unfamiliar places and activities.

"We're starting to see more and more organizations see the value of blogging," said David Serino, a Michigan-based travel industry consultant who tracks and ranks social media use among state tourism sites.

"We're generating content that's keyword-rich, and the content we're generating is very search engine-friendly," he said. "The content is extremely beneficial to the traveler. With blogging, you really get the insider information or the insider's take."

Number of fans soars

New Hampshire's Division of Travel and Tourism Development started its Facebook page in July 2009 and connected it to its website. When it began offering promotions in November, it had about 1,400 fans, said Tai Freligh, a spokesman for the division. Today, it has nearly 20,000.

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Underwater? Alternatives to Walking AwayStream video of games, events

Psychiatric Solutions gets subpoena, plans to comply

Psychiatric Solutions Inc. said an inpatient psychiatric facility in Philadelphia operated by a subsidiary received a request from the U.S. Justice Department for certain documents.
The Franklin-based psychiatric hospitals chain said it intends to provide the documents that were requested through a subpoena.

Psychiatric Solutions said Universal Health Services' deal to acquire the company remains on track to be completed next month.

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Belle Meade Town Center soldManaging Solo

Thursday, October 21, 2010

CBay files to sell shares in U.S., lists Franklin HQ

CBay Systems Holdings, whose subsidiaries acquired Franklin-based medical transcription services company Spheris Inc. in April, filed to sell shares in the United States for the first time.
CBay dubbed Franklin its principal executive offices and administrative headquarters for its U.S. operations in the regulatory filing of its plans to raise up to $115 million in an initial public offering of common stock in this country.

Executives with CBay, which has been based out of Annapolis, Md., couldn't be reached on Wednesday to explain the significance of using Spheris' former corporate address in the filing with the Securities and Exchange Commission.

The move could be a sign that CBay plans to build a corporate presence here or have only a few executives based out of Franklin, said Gary Brown, a securities attorney with law firm Baker, Donelson, Bearman, Caldwell & Berkowitz in Nashville.

"Tennessee is a fairly attractive place to relocate headquarters," he said,
citing companies such as Nissan and Louisiana Pacific that relocated here.

Shareholders to sell, too

Shares of CBay currently trade on the London Stock Exchange's AIM market. The company hopes to have its stock listed on the Nasdaq Global Market.

Offering proceeds will be used for working capital, for other general corporate purposes and for acquiring complementary businesses, CBay said. In addition to the company, certain shareholders will sell shares in the IPO. Jefferies & Co., Lazard Capital Markets, Macquarie Capital and RBC Capital Markets are listed as IPO underwriters.

MedQuist of Mount Laurel, N.J., the largest U.S. medical transcription services provider by revenue, in which CBay has a 69.5 percent stake, acquired assets of Spheris' domestic operations out of bankruptcy. Another subsidiary of CBay acquired Spheris' non-bankrupt India operations.

In its filing with the SEC this week, CBay also said that just before the stock offering it would convert to a Delaware corporation from a British Virgin Islands company. Delaware is considered an attractive state in which to incorporate.

John E. Fitzgibbon Jr., publisher of investment website, considers CBay's planned stock sale as a public offering in the United States rather than an IPO because the company already trades on the London Stock Exchange.

Reach Getahn Ward at 615-726-5968 or

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HCA public offering may wait until 2011Real Estate Outlook: Small Gains

Tractor Supply income soars

Tractor Supply Co., a retailer of farm and ranch supplies, said Wednesday that its third-quarter net income rose 46 percent on increased sales of pet-related products and warm-weather items.
The company reported third-quarter earnings of $32 million, or 43 cents a share, compared with earnings of $22 million, or 30 cents a share, in the same period last year. Net sales rose 11 percent to $829.1 million from $747.7 million.

Analysts polled by Thomson Reuters expec ted earnings of 37 cents a share on revenue of $824.3 million.

Sales at stores open at least a year rose 5 percent. The increase was driven by sales of animal- and pet-related products, as well as warm-weather items and apparel.

Sales at stores open at least a year are considered important because they aren't skewed by results from stores that open or close during the year.

The company expects annual net income between $2.09 and $2.13 a share, up from a prior range of $2 to $2.05 a share. It also raised revenue guidance to between $3.53 billion and $3.55 billion from a prior range of $3.49 billion to $3.53 billion.

Analysts expect full-year net income of $2.08 a share on $3.54 billion in revenue.

Shares fell 20 cents and closed at $37.99.

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Real Estate Outlook: Small GainsFirst Horizon turns profit in third quarter

Pinnacle's profit surprises as foreclosure of Seanachie building aids bottom line

Nashville's largest locally based bank, Pinnacle Financial Partners, swung to a profit in the third quarter, surprising investors and sending the stock up more than 10 percent in trading on the Nasdaq.
The stock was one of the biggest gainers of the day on the exchange, closing at a straight $11 per share.

The publicly traded bank made a profit of $549,000, or 2 cents per share, in the third quarter that ended Sept. 30, compared with a loss of $4.85 million in the same quarter a year ago and an average analyst expectation of a 29-cent loss for the quarter.

"The (stock) market is very sensitive to changes and surprises," said Sterne, Agee & Leach analyst Peyton Green, saying the bank's loan loss provision at $4.8 million in the quarter, a key indicator of future losses, was much lower than investors had expected and a sign that some of the bank's borrowers have improving balance sheets.

Bank President and Chief Executive Officer Terry Turner said some borrowers have successfully reduced expenses, even if revenues have not improved.

"The local market is stabilizing,'' he said. "I'm cautious about saying it's really improving."

Although it wasn't much of a profit, the third quarter ended a string of five straight quarterly losses for the bank because of bad loans, many of them to real estate developers and builders.

"We are working to address problem loans," Turner said. "I look at this as more as a culmination of our efforts over the last 12 months."

Pinnacle's net interest margin improved in the quarter. Revenue rose 5.6 percent to $44.7 million compared with a year ago. Plus, the bank foreclosed on bad loans, and its non-performing loan portfolio shrunk during the quarter, falling 13 percent to $118 million.

One foreclosure scheduled for the third quarter was a partly completed Franklin condo project called Jamison Station on Liberty Parkway, with an empty row for retail shops on its ground floor. Pinnacle had given investors with Chicago-based Centrum Properties a $17 million loan to construct the project.

Centrum Properties investors, including Vista-Pro Automotive executive Roger Brown, also had an interest in the Seanachie building at 329 Broadway in downtown Nashville, a former bar that has been empty for eight years. Pinnacle foreclosed on that building Friday. The bank foreclosed on it for $2.7 million, according to deeds recorded Tuesday with the Davidson County Register of Deeds.

Michael Hayes, vice president at C.B. Ragland Co., which owns several downtown buildings, said that property has been held up by a string of buyers who haven't been able to turn the building into anything. But with Jimmy Buffett's Margaretville Café opening across the street later this year, he didn't think the prominent location on Broadway would remain empty for long.

Contact business reporter Naomi Snyder at 259-8284 or

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First Horizon turns profit in third quarterUnderwater? Alternatives to Walking Away

Wednesday, October 20, 2010

Build-A-Bear brings joy to RiverGate

RiverGate Mall just got a little louder. Roars, giggles and screams pour from the west wing where Build-A-Bear Workshop set up shop.
The store, which opened Oct. 8, is one of 10 "pop-up" stores the company has opened nationwide for the holiday season that runs from Halloween through Easter next year, said Paul Bundonis, managing director for store in the central region.

The company's goal is to make its personalized bears and rabbits and their fashions available to more holiday shoppers at a time when stores typically see an uptick in traffic.

Pop-up stores with exceptional sales will remain open past the holiday season, Bundonis said.

"This location is a result of the flooding in early May to keep our customer base," said Tammy Davenport, store manager. She and her 10 staff members had worked at the Opry Mills Bear-A-Bear. "This is an opportunity for our guests here so they don't have to drive far down to Cool Springs."

The interactive retailer that provides customized stuffed animals is the third retailer to relocate to RiverGate Mall from Opry Mills after the May floods.

OshKosh B'gosh and Carter's moved in July to the Madison mall.

The company has long made its decisions based on the advice of kids fed to executives through its interactive website, where bear owners play games in Bearville, Bundonis said. Such counsel from young consumers has led to the development of Star Wars -themed bear outfits and a Star Wars bear on shelves this fall.

The RiverGate store has two rules: you must have fun and no inside voices aloud.

Thirty children from KinderCare in Goodlettsville followed those rules at the grand opening when they made Bunny Big Ears and Topaz Teddies to donate to Monroe Carell Jr. Children's Hospital at Vanderbilt through the Build-A-Bear Stuffed with Hugs program.

The birth of a bear begins with children rubbing a fabric heart between their hands as they make a wish, followed by bouncing feet to "jump start the hearts."

Build-A-Bear Workshop Inc., a public company, is expected to report its third-quarter results on Oct. 28 during an investor conference call. Its second-quarter revenues were $74 million, a 10 percent decrease from fiscal year 2009's second quarter.

Contact Juanita Cousins at 615-259-8287, or

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Buyers Interested in WalkabilityStores beef up staffs for holiday season

Belle Meade Town Center sold

An entity of Goldman Sachs Group paid $15.26 million for the Belle Meade Town Center on Tuesday in a foreclosure sale on the steps of the Davidson County courthouse. A subsidiary of Goldman Sachs had previously purchased the rights to the loan.
MLQ-Bell, LLC was the only bidder for the property, said attorney Brendi Kaplan, who handled the sale. The foreclosure process was started after Wells Fargo accused borrower BMT Associates of defaulting on a $23.6 million loan toward the development, which rehabbed the historic Belle Meade Theatre off Harding Road into a Harris Teeter grocery store, bank branch and luxury apartments.


Psychiatric Solutions' net income rises

Behavioral hospital operator Psychiatric Solutions Inc. said Tuesday that its third-quarter net income rose 88 percent on a boost in admissions. The Franklin-based company runs hospitals in 32 states, Puerto Rico and the U.S. Virgin Islands.

It said total admissions rose 10.7 percent during the quarter. At hospitals owned or operated for at least a year, admissions rose 8.2 percent, and revenue increased 10.4 percent. Shares of Psychiatric Solutions fell a penny to $33.61 in the regular session, and gained 3 cents to $33.64 after hours when the earnings report was released.


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51 Belle Meade Court units sellUnderwater? Alternatives to Walking Away

Incredible Dave's set to open next month

A missing piece to Nashville's entertainment puzzle should be in place next month with the opening of Incredible Dave's at RiverGate Mall.
The Louisville, Ky.-based restaurant and family entertainment center will fill a void left by the flooding of Dave & Buster's at Opry Mills, which is on hold pending reopening of the mall.

Incredible Dave's 64,500-square-foot venue in Madison is the first step in the company's regional expansion as it seeks consumers throwing birthday parties, sports fans and "staycationers" with money to spend.

"We've become a … destination for people staying home on their vacations, but (who) still are looking for ways to enjoy themselves," said CEO David Lawrence.

RelatedDark days drag on at Opry Mills mallOpry Mills flood damage tourOpry Mills stores that moved

The Incredible Dave's concept began when Lawrence, a single father of twins, noticed everyone not having fun at a child's birthday party.

"Kids can have fun in a box, but most parents don't enjoy children's party venues," he said.

Lawrence, a long-time restaurant owner, spent three years researching and visiting 200 entertainment spots across the nation before opening the first Incredible Dave's near his home in Louisville about two years ago.

Incredible Dave's aims to bridge a gap between Chuck E. Cheese and Dave & Buster's with entertainment geared for folks ages 9 to 35.

It will include 10 Cosmic bowling lanes, Euro bungee, bumper cars, billiards, a Wii lounge, sports bar, coffee shop, three-story obstacle course, inflatables and 120 video games where players can win tickets to exchange for prizes.

The Nashville location is 10,000 square feet bigger than its Louisville sibling, with the extra space aimed at adult guests by offering them live music, 85 television screens and two bars that serve alcohol. Children can see their parents through glass walls.

The new entertainment center in Nashville called for the relocation of 14 mall tenants, Lawrence said.

Game Galaxy co-owner James Wilson said his classic video game arcade had a temporary lease with CBL & Associates Properties Inc. that was terminated after four months as Incredible Dave's began construction in the spring.

"We were told another gaming place was coming into the mall, and they basically didn't want any other entertainment in the mall," he said. "We're not going to win against something like that."

Contact Juanita Cousins at 615-259-8287, or

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Managing SoloNashville area to get Verizon 4G by end of year

Monday, October 18, 2010

More airlines trim or dump first-class seats

The number of first-class cabins is shrinking.
A small but growing list of airlines is eliminating or reducing rows in the most expensive part of aircraft as customers increasingly look for cheaper seats.

The global slowdown has put a damper on first-class flying as fewer corporate travelers can afford $15,000 seats. Premium traffic on international flights, which includes business and first class, fell 16 percent in 2009, the International Air Transport Association says. While demand has improved this year, premium traffic in August was still 11 percent down from the pre-downturn size in early 2008, it says.

What's going on

• AirTran, which is being bought by Southwest Airlines, will drop first-class seating once the merger is completed next year. Southwest, which has never had first- or business-class seats on its planes, says it'll phase out AirTran's first-class service.

RelatedUnited CEO aims for the skyNashville fliers can expect to pay more for holiday travelSouthwest-AirTran merger means more cities, maybe not lower faresQuestions, answers on Southwest-AirTran mergerAirlines raise fees by up to 50 percent, add new ones

• United Airlines has been revamping its long-haul aircraft since 2007 to reduce and improve first- and business-class seating while installing more coach seats. United's merger with Continental Airlines also has triggered speculation that United may abandon its first class after the merger and adopt Continental's simpler approach of flying only two cabins: business and economy.

United "is evaluating which configuration or configurations make the most sense based on customer demand," United spokes man Rahsaan Johnson says. "Continental has fewer 13- and 14-hour flights than United does."

• Australian carrier Qantas said earlier this year that it's eliminating first-class service on most of its long-haul flights, except for a few flagship routes to Los Angeles and London from Australia.

• British Airways received delivery on some Boeing 777s last year that didn't have first class for the first time but says it will invest $150 million to upgrade existing premium seats.

Most aircraft flying in the U.S. typically have just two cabins: economy and a premium offering labeled business or first class.

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Real Estate Outlook: Small GainsMany Nashvillians could see lower heating bills this winter

Hemlock job fair in Clarksville draws 400 applicants

CLARKSVILLE — The prospect of a new job at the $1.2 billion Hemlock Semiconductor drew about 400 potential applicants from multiple states, even though the facility won't start hiring for at least a year.
Applicants from Tennessee, Kentucky, Ohio and Georgia arrived in Clarksville on Thursday to pursue one of what is expected to be about 500 jobs at the plant, which is under construction.

The Kentucky New Era reports that Hemlock will manufacture polysilicon, which is a key component in solar panels. Production is expected to begin in late 2012, and the company has said it will hire about 500 workers.

RelatedTemps reshape work forceJobs resources, tips and videos


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Stores beef up staffs for holiday season

Google's unusual strategy based on calculated logic

SAN FRANCISCO — In its self-proclaimed drive to make the world a better place, Google has immersed itself in far more than Internet search and online ads. But driverless cars and a wind energy farm in the Atlantic Ocean?
It may not always be immediately apparent to frustrated investors. They wish management would be more frugal and focus more on the stock price, but there's usually some calculated logic underlying Google's unconventional strategy.

Google's brain trust of founders Larry Page and Sergey Brin, along with CEO Eric Schmidt, clearly thinks differently than most corporate leaders, and its example eventually may encourage more companies to take risks that might not pay off for years, if ever.

The time is ripe for long-term thinking, with memories still fresh of the financial meltdown, a byproduct of Wall Street's demands for companies to deliver ever-higher profits every three months and meet earnings targets set by analysts.

"Everywhere you look in this country, it seems that we are suffering from the consequences of too much short-term thinking," said longtime Silicon Valley forecaster Paul Saffo, managing director of foresight for Discern Analytics.

"Google doesn't have this disease," he said. "It is one of the few lone bright spots we have in that regard."

Benefits are possible

Even so, it might be difficult to fathom how Google can justify paying for the development of robotic technology that has driven cars thousands of miles on California roads without a major accident and committing potentially hundreds of millions of dollars to help build a wind farm hundreds of miles from the Eastern Seaboard.

With a little imagination, it's easier to see how Google might benefit. For instance, Saffo surmises that the driverless technology eventually could be implanted into a fleet of vehicles used for car sharing. Google then could use a camera to take new pictures of streets and highways that appear in its online maps, another example of a service that once seemed like a diversion from its Internet search engine, but is now an indispensable tool that helps the company sell advertising.

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Buyers Interested in WalkabilityCar regulators aim for higher fuel economy

Saturday, October 16, 2010

The foreclosure freeze: questions and answers

Erroneous documents. A freeze on foreclosures. Charges of fraud.
A flurry of developments has sketched an alarming scenario: that major U.S. banks rammed through foreclosure after foreclosure without giving many borrowers a fair shot at keeping their homes.

Questions have arisen about the scope of the problem, the effect on the nation's foreclosure epidemic and the likelihood that some people could regain their foreclosed homes.

Here's what you need to know about the unfolding foreclosure mess:

What's the problem I'm hearing about foreclosures?

Three of the nation's largest banks — JPMorgan Chase & Co., Ally Financial's GMAC Mortgage unit and PNC Financial — have stopped foreclosures in some states. The biggest bank, Bank of America Corp., has done so in all 50 states. JPMorgan has done so in 41. They're checking to see whether their employees made errors in loan documents needed to complete foreclosures. The banks say they think they'll resume foreclosures in those states within weeks. Others think it could drag on longer, especially as more state and federal officials intervene.

What kinds of errors?

Evidence has surfaced of mistakes in the documents that mortgage companies present to a judge to foreclose on a home. Lenders failed, for instance, to show they have a legal right to foreclose on borrowers' homes. And some mortgage company employees have acknowledged they signed foreclosure documents without reading them. Many documents also appear to have been signed without a notary public witnessing that signature. That's a violation of law.

How did this happen?

Mortgage companies have been overwhelmed by paperwork involving millions of foreclosures and defaults. Consumer advocates say the companies took shortcuts to manage the onslaught rather than hiring more staff. One way was to have a bank or a bank representative "robo-sign" thousands of documents he or she hadn't actually read.

How widespread is the problem?

Only JPMorgan Chase has spelled out how many foreclosures it's suspending: about 115,000. But consumer advocates say the problems with foreclosure documents are widespread. Two of the biggest lenders, Wells Fargo & Co. and Citigroup Inc., say they have no plans to suspend foreclosures. They say they're confident they complied with state laws.

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Underwater? Alternatives to Walking AwayTN borrowers could benefit from national mortgage investigation

First Horizon turns profit in third quarter

First Horizon National Corp., the parent of First Tennessee Bank, said Friday that its third-quarter results reversed a loss from the previous year.
Net income rose to $15.9 million, or 7 cents per share, during the quarter, from a loss of $52.9 million in the year-ago period.

Quarterly revenue dropped 12 percent to $434.4 million from $493 million in the previous year. Much of the decline came from a 17 percent drop in noninterest income, which is money from fees and charges. The bank's stock declined 86 cents per share on Friday, or 7.9 percent, to close at $10.03 per share in New York Stock Exchange trading.


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Real Estate Outlook: Small GainsMany Nashvillians could see lower heating bills this winter

China currency report delayed

WASHINGTON — The Obama administration announced Friday that it will delay a scheduled report on whether China is manipulating its currency to gain trade advantages until after an upcoming meeting of the world's major economies next month.
The Treasury Department said the administration will wait until after President Barack Obama meets with other leaders of the Group of 20 nations in Seoul in early November.

The administration's announcement was certain to disappoint U.S. manufacturing companies, labor unions and lawmakers who contend that China is keeping its currency undervalued to gain trade advantages.

The report surveying currency practices of other nations is by law required to be submitted to Congress on Oct. 15 and April 15. However this administration and others have often missed that deadline.

The administration announced the delay hours after saying it was launching an investigation into Chinese trade practices that could keep American workers from gaining high-paying green jobs.

U.S. Trade Representative Ron Kirk announced that the government would look into the United Steelworkers complaint that Chinese businesses are able to sell wind and solar equipment on the international market at a cheaper price because they receive subsidies from the Chinese government. The union said the subsidies are prohibited by global trade rules.

The timing of the investigation could be intended to show lawmakers that the administration is getting tough with China on trade policy while postponing the more delicate currency issue until after the Nov. 2 midterm elections.

Sen. Charles Schumer, a vocal critic of China's trade practices, welcomed the trade case but said he was disappointed the administration did not issue a report citing China as a currency manipulator.

"An investigation into China's illegal subsidies for clean energy industry is overdue, but it's no substitute for dealing with China's currency manipulation," Schumer, D-N.Y., said in a statement.

The administration could bring a case against China before the World Trade Organization, if it finds the allegations by the Steelworkers to be true. If the WTO found in America's favor, it would clear the way for the United States to impose penalty sanctions on Chinese imports unless the Chinese government halted the practices.

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Underwater? Alternatives to Walking AwayEra of cheap ‘Made in China’ is ending

Stores beef up staffs for holiday season

Thousands of unemployed Middle Tennessee workers might find at least temporary relief from their plight this holiday season as retailers ramp up their staffs in expectation of better Christmas sales than last year's.
Among the companies planning significant holiday hiring are Toys R Us, Kohl's and Macy's, but others are expected to follow suit, said John A. Challenger, chief executive officer of the outsourcing firm Challenger, Gray & Christmas.

Bass Pro Shops, which reopened its Opry Mills store three weeks ago after being closed since the early May flood, will take on up to 30 workers for the season, said General Manager Greg Cole.

"We're hiring for our Santa's Wonderland, as well as cashiers, sales staff, and other positions all through the store," he said. The store also reports that it's getting applications from displaced workers from other Opry Mills stores, none of which have reopened yet amid an insurance squabble over the damaged property.

RelatedJobs resources, tips and videos

Macy's, the Cincinnati-based department store chain, said it would hire at least 65,000 workers this season, including several hundred in the Nashville area at its retail stores and a distribution center in Portland, Tenn.

Kohl's department stores, headquartered in Menomonee Falls, Wis., said it plans to add "about 56 workers per store in the Nashville area."

"We saw significant improvement in seasonal jobs last year over what they were at the bottom of the recession, and I believe it's going to continue to grow," Challenger said of the national picture. "Not explosively, but I'm optimistic we'll see continued growth in retail jobs in the fourth quarter."

"Retail sales are doing better in Tennessee, and people have been spending more on durable goods such as furniture, appliances and cars in the past three months," said David Penn, an economist at Middle Tennessee State University. "I have to think that the holiday season will be better than last year's, which was really bad.

"But what we don't know is whether that can be sustained, or whether people have just replaced cars and appliances that have worn out," Penn said. "For the holidays, we might see folks focusing more on clothes and other things they have to have, rather than making impulse purchases."

For most of the holiday jobs, employers require applicants to apply online.

Contact Tennessean business writer G. Chambers Williams III at 615-259-8076 or

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Buyers Interested in WalkabilityMeager increase forecast for holiday retail sales

Wal-Mart aims for more local produce

NEW YORK — Wal-Mart Stores Inc. plans to double its sales of locally sourced produce in the U.S. by the end of 2015.
The move by the world's biggest retailer is part of a new sustainable agriculture strategy that looks to steer more business to small and medium-size farms globally while also reducing farming's environmental impact.

If Wal-Mart meets its goals in the U.S., local produce will still make up only 9 percent of the produce it sells. But because of the retailer's sheer scale, it has the potential for a sizable impact. More than half of Wal-Mart's $405 billion in annual revenue is from food.

In other countries the goals are bolder. Wal-Mart said it would source 30 percent of its produce in Canadian stores locally by the end of 2013, and set a goal of 100 percent when local sources are available.

RelatedWal-Mart pins growth on smaller storesWal-Mart plans smaller, urban store near 100 Oaks MallWalmart plans smaller stores for urban areas

Wal-Mart plans to buy more of select U.S. crops. It also plans to train 1 million farmers and farm workers in emerging markets in crop selection, sustainable farming practices and other subjects, and selling $1 billion in food sourced from 1 million small and medium-size farms.

Wal-Mart said Thursday that it will start asking suppliers about water, energy, fertilizer and pesticide used per unit of food produced. The retailer also wants to lower food waste at its stores, with plans for a 15 percent reduction at emerging-market stores and clubs and a 10 percent reduction at stores and clubs in other markets by 2015's end.

"Our efforts will help increase farmer incomes, lead to more efficient use of pesticides, fertilizer and water and provide fresher produce for our customers," President and CEO Mike Duke said in a statement.

The retailer's other goals include expanding the practice started at Walmart Brazil of sourcing only beef that doesn't contribute to the Amazon rainforest's deforestation.

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Wal-Mart pins growth on smaller storesReal Estate Outlook: Small Gains

Verizon, AT&T to sell Apple's iPad

NEW YORK — In a sign of warming relations between the two companies, Verizon Wireless is going to start selling Apple Inc.'s iPad at the end of this month, the companies said Thursday.
The news follows published reports that Verizon Wireless will start selling a version of the iPhone early next year. The companies have not confirmed the reports, and Verizon Wireless has downplayed the possibility of an iPhone for its current network.

AT&T Inc. is Apple's exclusive U.S. carrier for the iPhone. It's also the only U.S. carrier that's compatible with the 3G version of the iPad, which allows for cellular data access.

Verizon Wireless won't sell the 3G version. Instead, it will sell the Wi-Fi version, with the option of bundling it with a "MiFi" gadget for about $130. MiFi, a Post-It-pad sized, battery-powered device, connects to Verizon's 3G network and relays the data to the iPad via Wi-Fi. Data plans will start at $20 per month for 1 gigabyte.

The iPad is also sold by several retail chains, including Best Buy Inc. AT&T said separately Thursday that it also will begin selling the iPad in its stores on Oct. 28. The carrier's data plans for the iPad start at $15 per month.

Verizon Wireless is a joint venture of Verizon Communications Inc. of New York and Vodafone Group PLC of Britain.

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Nashville area to get Verizon 4G by end of yearBuyers Interested in Walkability

Thursday, October 14, 2010

TN borrowers could benefit from national mortgage investigation

An investigation launched by attorneys general in all 50 states could force mortgage companies to settle allegations that they used flawed documents to foreclose on hundreds of thousands of homeowners.
It could take months, at least, for any settlement to be reached. But legal experts say lenders could be forced to accept an independent monitor to ensure they follow state foreclosure laws.

The banks also could be subject to financial penalties and be forced to pay some people whose foreclosures were improperly handled.

Even though Tennessee's foreclosure laws are more lenient on lenders than in those states where the worst allegations of bank shortcuts have surfaced, some borrowers here could still benefit from the banking industry's desire to devise one common set of rules to settle this dispute once and for all.

For banks, "the most efficient way for them to get out from under this is to settle across the board," said Kathleen Engel, a law professor at Suffolk University in Boston.

Employees of several major lenders have acknowledged in depositions that they signed thousands of foreclosure documents without reading them as required by state laws.

"This is not simply about a glitch in paperwork," said Iowa Attorney General Tom Miller, who is leading the probe. "It's also about some companies violating the law and many people losing their homes."

At a news conference, Miller said the states might be open to alternatives to financial penalties for the banks. They might, for example, agree instead to have lenders step up their efforts to help people reduce their loan payments so they can avoid foreclosure.

Tennessee is a nonjudicial foreclosure state, meaning there is no requirement that foreclosures go through the court system.

It wasn't clear Wednesday what kind of changes could take place at the local level.

"It's a complex issue,'' said Jeff Hill, senior counsel in the consumer protection division of the Tennessee Attorney General's Office. "It's not a straight-up simple scam. It's large institutions, and it's a complicated industry."

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Rules Change for Getting Home LoansState reports 62 layoffs in Tennessee

Getahn Ward: Baptist, St. Thomas improve efficiency

At Baptist Hospital, a key surgery center can handle up to three more cases a day thanks to an initiative that has cut patient waiting times before a procedure by 20 minutes.
Sister hospital Saint Thomas was able to organize its operating rooms more efficiently to reduce the number of surgical instruments that couldn't be found when turning a room over for a new patient.

The smarter approach means the hospital's staff doesn't have to open a new surgical set as often to replace missing or misplaced instruments. It also saves on sterilizations, and all that saves money.

Both hospitals got those results by putting a team of employees into action to search for specific ways to eliminate waste. It's all part of a broader concept called lean health care that reflects a push by hospitals to be more efficient as they face the pressures of health-care reform and other revenue uncertainties.

"It's a matter of investigating the issue, following through and then drilling down to see where the actual issues lie, and how can those issues get resolved," said Donna Cornette, Saint Thomas' process and systems improvement director. "The focus is not on eliminating staff. It's just to make their work flow more efficient."

Saint Thomas also has used lean health care to reduce the time that it takes for patients to be evaluated in the emergency department.

A future effort will look at ways to improve the patient identification system — from the bands put on people's hands to the labels used for medication orders.

Take lean to another level

Baptist and Saint Thomas are taking their lean health-care programs to the next level.

Gallatin-based Healthcare Performance Partners is training managers from various areas of the hospitals to become advocates for lean thinking — equipping them with techniques to solve issues in their respective units.

Proponents say that's the right approach.

"It's not enough just to do events," said Nancy McDonald, lean facilitator with the lean systems improvement department at Denver Health. That integrated health system saved about $66 million in a little more than four years. "You want to transform the culture."

Franklin-based hospital operator Capella Healthcare is expanding its lean health-care initiatives to two more hospitals this year after a pilot at a hospital in Oklahoma. That project trimmed the time patients spent in the emergency department by as much as 15 percent, said Mike Wiechart, chief operating officer at Capella.

At Baptist, the redesign of pre- and post-operation areas showed how efficiencies could be gained with the existing resources, rather than building more rooms.

"We were pushing patients into the process before; now we're pulling patients into the system as needed — and not before we need them," said Chris Sisler, process improvement director with the hospital. "By increasing capacity, we also can increase revenues."

Getahn Ward covers the business of health care for The Tennessean . He can be reached at 615-726-5968 or at

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Wal-Mart pins growth on smaller stores

Wal-Mart Stores Inc., the world's largest retailer, expects to open 30 to 40 smaller-format stores in fiscal 2012 as it seeks to enter urban markets to jump-start growth in the U.S., the company's chief executive officer said Wednesday.
The news came shortly after an entity of Wal-Mart bought the 95,000-square-foot former Home Depot Expo Design Center near 100 Oaks Mall in Nashville earlier this week.

The giant discount retailer said it plans to keep the building and create a smaller version of its 185,000-square-foot superstore there, according to developer George Tomlin of GBT Realty — who had earlier owned and sold the property to Wal-Mart.

Wal-Mart has not confirmed its plans for the location and representatives of the company did not return phone calls and e-mails.

RelatedWal-Mart plans smaller, urban store near 100 Oaks Mall

But, at an investors' conference in Rogers, Ark., the retailer's chief of U.S. stores, Bill Simon, said he saw a "true need" for stores smaller than the colossal supercenter.

"After years of development we are now prepared to accelerate growth" of smaller stores, Simon said. The company will open as many as 205 new stores in total in the U.S. in the year ending January 2012.

Wal-Mart is looking for ways to spur growth as sales at stores in rural areas open more than a year have fallen for five straight quarters. Adding urban markets may help the retailer add about $80 billion in sales, or about 20 percent of last year's revenue, according to Neil Currie, an analyst at UBS Securities LLC in Stamford, Conn.

In the past, the retailer's attempts to establish itself in cities such as New York have been stymied by opposition from labor unions and community activists, as well as difficulty in obtaining real estate.

Groups such as New York Communities for Change have voiced opposition to the opening of a Walmart store in Brooklyn, although the retailer hasn't announced plans to do so. The move toward smaller stores also comes as more retail chains target low- to moderate-income shoppers as worries remain about consumers pulling in their horns and saving rather than spending.

Target goes small, too

Target Corp., the second-largest U.S. discount chain, is adding smaller stores to fuel growth. The retailer announced plans last month to open a small store in downtown Seattle in 2012, part of a broader plan for smaller stores of 60,000 to 100,000 square feet. That compares with Target's usual store size of 125,000 square feet or more.

"It could be a huge opportunity, and now would be the time to do it," David Abella, portfolio manager at Rochdale Investment Management in New York, said of Wal-Mart's plan.

"Target doing it lit a fire under Wal-Mart. They don't want to give Target a big head start."

Tennessean reporter Naomi Snyder contributed to this story.
Contact her at 615-259-8284 or

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Buyers Interested in WalkabilityRetailers’ reports show tepid May for shoppers

Wednesday, October 13, 2010

Suits claim developers in default on Spring Hill office building projects

A lender has filed a lawsuit in U.S. District Court trying to collect from some of the developers in Campbell Station, a more than 300-acre office, home and retail complex in Spring Hill, saying loans for two of the office buildings are in default.
U.S. Bank has filed suit against The Reed Family Real Estate Partnership Two associated with developer Tom Reed over a $4.4 million loan the bank says is in default for the Medical Campus at Campbell Station, which houses Vanderbilt medical offices as one of its tenants.

It also sued developer Doug Cutler and the Professional Building at Campbell Station in a separate lawsuit over a $3.1 million loan to the building by the same name, which the bank also says is in default.

The bank's lawyers at Frost Brown Todd in Nashville didn't sue Tom L. Reed Jr. because he has filed for Chapter 7 bankruptcy, which grants debtors some protections from lawsuits.

Records show Tom Leon Reed Jr. filed for bankruptcy on Sept. 24 with liabilities of $10 million to $50 million and assets of less than $1 million. Neither he nor his attorney returned phone calls on Tuesday.

The lawsuit is a sign of continued strain on the owners of commercial real estate buildings, particularly in Spring Hill, said Debra Viol, the president and founder of The Stanton Group Inc. in Brentwood, a brokerage and property manager.

"When the economy turned, it turned for the worst in Spring Hill,'' she said. "They got it from all sides, not just the general turn but also from (General Motors)."

General Motors' Spring Hill plant lost 2,000 jobs when production of the Traverse moved to Michigan in late 2009. The company announced last month that it plans to bring 483 jobs back to Spring Hill to make the fuel-efficient Ecotec engines, but those jobs won't materialize for a while or immediately replace all those that were lost.

Viol said that even medical office tenants are hesitant to sign leases because they worry about the economy, too, as well as the impact of health-care reform on their businesses.

Contact real estate reporter Naomi Snyder at 615-259-8284 or

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Pfizer to buy Bristol-based King Pharmaceuticals for $3.6 billion

Pharmaceuticals giant Pfizer is buying Tennessee's largest drugmaker for $3.6 billion in cash to add more pain products for its sales force and to beef up its drugs pipeline as patents expire on its key products.
Shares of King Pharmaceuticals Inc. of Bristol, Tenn., jumped 39 percent, or $3.99 per share, to close at $14.14 a share — the biggest percentage gain on the New York Stock Exchange in Tuesday's trading.

The deal, expected to close by next spring, would allow Pfizer to expand its pain products beyond arthritis treatment Celebrex and nerve pain remedy Lyrica.

King, whose products include the pain patch Flector and morphine pill Embeda, has been trying to move aggressively into abuse-resistant pain relief drugs, a strategy that's part of a restructuring slowed by a complex drug approval process nationally.

King has received approval for one drug in that category from the U.S. Food and Drug Administration, Embeda. Proponents say it could be an alternative to the often-abused OxyContin pain pills.

"These products fit pretty well and they're going to be able to eliminate some duplications in infrastructure between King and Pfizer," said Robert Hazlett, an analyst with BMO Capital Markets in New York. Hazlett follows King's and Pfizer's stocks.

A.J. Kazimi, chief executive officer of Nashville-based drugmaker Cumberland Pharmaceuticals, sees Pfizer's acquisition of King as a signal that Tennessee's bio-pharmaceutical industry is making strides on the national scene.

Pfizer expects at least $200 million in cost savings, mostly by eliminating overlap or duplication between the two sales forces. It's unclear what impact the deal would have on the 2,600 employees that King has including in Bristol and in New Jersey, where its top executives are based.

To most industry analysts, the Pfizer-King deal illustrates continuing consolidation in the pharmaceuticals business.

New products wanted

Pfizer is searching for new products as its top-selling cholesterol drug, Lipitor, is expected to lose some of last year's $5.4 billion in U.S. revenues to new generic competition next year when a patent expires. Last year, Lipitor generated $11 billion of sales worldwide for Pfizer.

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Many Nashvillians could see lower heating bills this winter

Most Americans should get some relief on their heating bills this winter, including those in Nashville who heat with gas.
The price of natural gas, the fuel that supplies 70 percent of the nation's heat, is relatively low for the second year in a row.

Forecasters also predict a warmer winter across much of the country — especially in the Southeast, which suffered through a historically cold winter last year.

"In Tennessee, we're looking to see about a 5 percent reduction in heating bills over the course of the winter, which translates into about $5 to $6 a month per residential customer," said David Trusty, spokesman for Piedmont Natural Gas, which serves about 170,000 customers in Davidson and parts of Rutherford, Wilson, Williamson, Cheatham, Sumner and Robertson counties.

"That assumes a more normal winter than last year, which was about 12 percent colder than normal," Trusty said. "We're looking at two things driving that forecast — the wholesale cost of natural gas, which accounts for about two-thirds of the drop, and the rest from having a more normal weather pattern."

But those who rely on heating oil, and residents of the Pacific Northwest, may need to bundle up. Unlike natural gas, crude oil prices have risen sharply from their recession lows, pushing up the price of heating oil 16 percent over last year. And forecasters predict a cold and snowy winter in the Northwest.

Last winter, the nationwide average cost to heat a home from November to March was $978, down 6 percent from the previous winter, according to Mark Wolfe, executive director of the National Energy Assistance Directors' Association.

The Energy Information Administration, a branch of the U.S. Energy Department, releases its outlook for heating fuel costs today.

One alarming statistic, though, is that despite mild weather, heating assistance officials say consumers' requests for help paying bills remains high because of stubbornly high unemployment.

Meanwhile, natural gas prices are $3.52 per thousand cubic feet and are expected to creep just above $4 on average, as the weather turns colder. While home heating costs are low compared with recent history, they are still 23 percent higher than they were five years ago.

"It's not enough to sink a middle-class family, but it is more alarming to them," Wolfe said.

Tennessean business writer G. Chambers Williams III contributed to this story.

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Thursday, October 7, 2010

Home sales fall 19 percent; but Wiliamson County shows strength

Nashville area home sales remained down in September following the June expiration of the tax credits to purchase a home. There were 1,567 sales of homes, condos, duplexes and residential lots in September, 19 percent less than a year ago, the Greater Nashville Association of Realtors said today.
The median sale price of a single-family home was $171,820 in September, up 7 percent from a year ago but still off 6 percent from three years ago.

Condo sales in the region fell 9 percent in September compared to a year ago and the median price of a condo, at $155,000, is up 9 percent from a year ago.

The association also released year-to-date sales for the different counties, figures that showed strength in Williamson County, where sales were up 20 percent, while Davidson County sales remained flat over last year.

Williamson County, one of the nation’s wealthiest, has continued to attract new jobs such as Jackson National Life Insurance Co., which is bringing 750 jobs to a new headquarters in Cool Springs.

The median price this year of a single-family home in Williamson County was $338,000. It was $154,000 in Davidson County.

In the region, there were 1,588 sales pending at the end of September, compared with 2,120 during this time last year, the association said. The average number of days on the market for a single-family home was 92 days, compared with 86 days for September 2009.

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Nashville area to get Verizon 4G by end of year

On Wednesday, Verizon said it plans to bring 4G wireless to Nashville by year-end as part of a broader rollout in a few dozen new cities.
Verizon said service will reach Nashville, Murfreesboro, Franklin, Dickson, Kingston Springs, Hendersonville, Gallatin, Brentwood, Lebanon, Spring Hill and Columbia, Manchester, Shelbyville and Tullahoma, Tenn.

Nashville International Airport also will get the service, it said.

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Meager increase forecast for holiday retail sales

With the economy still iffy, retailers are going into the 2010 holiday season in November much as they did last year — with lean inventory and discounts.
Holiday retail sales are expected to rise 2.3 percent this year to $447 billion, according to a forecast out Wednesday from the National Retail Federation. The group is going with a figure above last year's 0.4 percent rise and the 3.9 percent decline experienced in 2008 just after the stock market crash.

National Retail Federation President and CEO Matthew Shay said that although retailers are feeling more optimistic this year, there are erratic indications from still-elevated unemployment figures and shifting consumer confidence.

Retailers are expected to keep a tight control on inventory, much like last year, and will try to expand sales opportunities through new ways of shopping such as on mobile phones.

RelatedChart: U.S. holiday sales forecast

The other major retail trade group, the International Council of Shopping Centers, released its forecast for holiday sales on Tuesday. It is expecting the largest increase since 2006, with a 3 percent to 3.5 percent gain over last year. Sales for November and December rose by 4.4 percent in 2006.

"The key story is that the retail recovery continues, and that bodes well for the upcoming holiday shopping season," said Michael P. Niemira, chief economist for the council.

But consumers just don't have as much money to spend on gifts or themselves this holiday season, according to a survey by Accenture, a New York-based consulting firm.

A majority of them — 83 percent — plan to spend the same or less on holiday gifts compared with last year.

"The 2010 holiday shopping season will be spectacularly unspectacular for many consumers, but that will suit retailers who remember well the turbulence of holiday '08," said Janet Hoffman, managing director of Accenture's retail practice.

Of those who are spending the same or less this year, about half said it was because they have less discretionary income this year and a third said they have concerns about the economy.

The online survey questioned 526 U.S. consumers last month.

It also indicated that 93 percent of consumers find discounts important or very important for their holiday purchases. Only 13 percent said they were willing to pay full price for specific gifts this year.

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Car regulators aim for higher fuel economy

WASHINGTON — In a move that bolsters states with aggressive timetables for reducing auto emissions, the Environmental Protection Agency and the Transportation Department have taken new steps toward creating fuel standards that would require cars to get between 47 and 62 miles per gallon by the year 2025.
Friday's announcement, which the EPA described as "scenarios," not guidelines, was framed in terms of limiting the emission of greenhouse gases that climate scientists say contribute to global warming. The new steps follow up on rules the federal government adopted in April that would increase average fuel economy of cars to 34 miles per gallon by 2016.

Environmental groups hailed the action as affirming California's nationally trendsetting approach to controlling greenhouse emissions. The state had been expected to issue its standards for 2025 this fall, but it has delayed them until early next year, according to Roland Hwang, transportation program director for the Natural Resources Defense Council.

The announcement by the EPA and Transportation Department, called a notice of intent, would narrow the gap between the federal and state approaches, creating more uniform standards for carmakers, auto parts suppliers, green technology firms and oil companies to follow.

In a statement on its website, the California Air Resources Board said it "applauds" the federal government's efforts.

Spokesmen for the auto industry condemned them, saying they could raise prices and penalize consumers.

Final rules are scheduled to be issued at the end of July 2012.

The United States is the second-biggest emitter of greenhouse gases, behind China, and the vast American vehicle fleet accounts for a sizable portion of total emissions. For years, under Democratic and Republican administrations alike, the domestic auto industry blocked efforts to increase fuel economy standards in Congress by arguing that they would drive up prices of American cars, making them less competitive.

Fewer sales, the industry argued, would lead to auto plant closings and job losses.

Congress loses its say

In 2007, the Supreme Court ruled that the EPA could regulate new-vehicle emissions without going through Congress as part of its legal mandate to control greenhouse gas emissions and curb air pollution.

In a technical assessment the EPA and Transportation Department conducted with the California Air Resources Board, the agencies developed scenarios to decrease greenhouse emissions from cars by 3 percent to 6 percent annually starting in 2017. In terms of fuel economy, that would mean new cars would have to get on average between 47 and 62 miles per gallon by 2025. The agencies estimated that such improvements would add about $800 to $3,500 to the cost of a car but that owners would reap "lifetime savings due to reduced fuel costs of about $5,000 to over $7,000."

Car industry representatives vigorously dispute such estimates, contending that the calculations the Obama administration made were based on faulty assumptions about costs of technology and manufacturing.

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51 Belle Meade Court units sell

An entity affiliated with a California-based firm has bought 51 available condo units inside Belle Meade Court, a 65-unit luxury condominium project off Harding Pike. Tony Giarratana's company had developed it in 2008.
The condos have struggled to sell in a soft real estate market.

A&M Investors BP, affiliated with Alvarez & Marsal of El Segundo, Calif., bought the unsold units for $11.45 million, according to a real estate deed. The project had a 2008 loan for $20.4 million.

A sister retail project next door, Belle Meade Town Center, which is anchored by a Harris Teeter, was threatened with foreclosure earlier this year. A subsidiary of Goldman Sachs acquired it last month. Giarratana said he had previously sold off most of his stake in the Belle Meade Town Center.

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Tailor rewards to individual workers for best results

Just how are you supposed to motivate employees? They're your most important assets, and you need them to be dedicated brand advocates, provide excellent customer service, help build business and convert customers into fans.
But the debate over what motivates them has never been more confusing, especially in a multi-generational work force.

Baby boomers, the first of whom are nearing 65, respond differently from their younger colleagues. Generation Y members, or Millennials, born between 1981 and 2001, are known for lack of patience, the desire for independence in their jobs and rapid movement in their work lives.

Gen Xers, born from the early 1960s to 1980, are entering their middle years and are beginning to see their careers differently. While not focusing on retirement planning, they're questioning their career choices while also looking for advancement, responsibility and authority that boomers often are reluctant to give up.

A new issue in the motivation debate is how effective financial incentives are in motivating people at work.

Daniel Pink, author of Drive: The Surprising Truth About What Motivates Us , believes this approach is out of sync with workers today. He believes that incentives that reward good work with pay, benefits or promotions may even be counterproductive.

Say what? Let Pink explain. He says traditional employee incentive systems are flawed. He feels they may foster short-term thinking, with the incentive taking precedence over the long-term best interests of the business; or they may extinguish motivation and diminish performance. If goals required to win rewards seem unachievable, the incentives may have a reverse effect.

Or perhaps a hyperactive focus on performance crushes creativity. The focus becomes performance, leaving little time or energy for workplace improvement.

At their worst, incentives sometimes encourage cheating; when the reward is significant, shortcuts and unethical behavior may seem worth the risk to an employee.

Or incentives become addictive with people waiting for the next sales contest and sandbagging orders until the next quarter as they learn to play the game.

Support for performance pay

On the other side of the coin, The Economist cited four research reviews that showed pay-for-performance plans can increase productivity dramatically.

One columnist wrote that linking pay to performance is motivating, can help retain talented employees and can eliminate what he called "sluggish dullards."

So what do you make of these polar opposite opinions? My observation is that employees, much like customers, cannot be lumped into broad groups. Saying all salespeople are alike is just as ludicrous as saying that all women ages 18 to 34 are the same.

That means you as a manager have an additional burden. You have to study the employees you have, understand them as individuals and then design reward systems that fit their personalities and psyches.

Remember: Nobody said running a business was going to be easy.

David Bohan founded BOHAN Advertising|Marketing, a Nashville agency with clients in travel, hospitality, health care and consumer products, in 1990. He has worked in marketing and advertising since earning a degree at the University of Tennessee-Knoxville in 1970.

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