Business briefs, December 29

Published December 29, 2005 at midnight

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NATIONAL

Delta pilots approve 14 percent pay cut

Delta Air Lines Inc. pilots voted Wednesday to approve a 14 percent pay cut in a deal that their union worked out with management to help the bankrupt carrier cope with an expected cash crunch.

It's the second double-digit pay cut the pilots have accepted in 13 months.

Delta and the Air Line Pilots Association, which represents the Atlanta- based company's 6,000 pilots, now will try to hammer out a comprehensive agreement by March. If not, the sides have agreed to let the decision be made by an arbitration panel.

Before the two sides reached the tentative agreement, the union had threatened to call a strike if the pilot contract was thrown out.

Rank-and-file pilots will see their average salary of roughly $170,000 reduced to about $146,000. The pilots also would give up other pilot pay and cost items equal to an additional 1 percent hourly wage reduction.

The agreement, which the airline said would save $143 million, adds to the $1 billion in annual concessions Delta pilots agreed to in a five-year deal reached in 2004. That deal, which was meant to keep the cash-strapped airline out of bankruptcy, included a 32.5 percent pay cut.

HealthSouth: Scrushy not due anything

HealthSouth Corp. accused ousted CEO Richard Scrushy of trying to "pillage" the company of more than $100 million, according to court papers filed Wednesday, and said he isn't due anything for his firing.

Responding to a state court lawsuit filed this month by Scrushy, the Birmingham, Ala.-based rehabilitation chain said in a counterclaim that Scrushy was directly responsible for a massive earnings overstatement that nearly drove it to ruin.

A jury acquitted Scrushy of criminal charges this year.

Scrushy said he was duped by top aides and middle managers who pleaded guilty in the fraud.

But in a court document, HealthSouth argued that Scrushy hatched the plot to make it appear that HealthSouth was meeting Wall Street estimates, then "profited hugely" by selling more than $200 million in HealthSouth shares and drawing millions more in salary, bonuses and options.

Now, the company said, Scrushy is wrongly seeking more than $100 million in compensation related to his firing. In the countersuit, HealthSouth sought an unspecified amount from Scrushy and argued that his last employment contract, from 2002, was invalid.

Trump outlines plan for Philly casino complex

Donald Trump's casino company and partners on Wednesday said they plan to spend $350 million to develop the TrumpStreet Casino and Entertainment Complex in Philadelphia.

Keystone Redevelopment Partners LLC, a joint venture between Trump and local investors led by former Philadelphia 76ers President Pat Croce, also said that the casino would have restaurants, a three-theater cinema, retail space, an oyster bar and a steakhouse.

Keystone is seeking one of the first two licenses the Pennsylvania Gaming Control Board will issue for Philadelphia, perhaps by the end of 2006.

Covad resolves antitrust lawsuit with Verizon

Shares of San Jose, Calif.-based Covad Communications Group Inc. jumped nearly 44 percent Wednesday after the high-speed Internet access company announced that it resolved an antitrust lawsuit and other disputes with Verizon Communications Inc.

As part of the deal, Covad expanded its line-sharing agreement with Verizon, allowing it to offer its digital subscriber line services over lines sold by Verizon voice resellers. It also announced a line-sharing agreement with MCI, which is being acquired by Verizon.

Covad shares rose 29 cents, to 96 cents, on the American Stock Exchange.

Celgene's shares rise after FDA drug approval

Celgene Corp.'s shares rose 5.9 percent Wednesday after U.S. regulators approved the company's Revlimid capsule for a rare blood cancer, a treatment that will cost pharmacies $215 to $225 a pill.

The Food and Drug Administration cleared Revlimid for myelodysplastic syndromes, or MDS, which cause anemia and infections.

Research showed that Revlimid may reduce or eliminate the need for blood transfusions in patients with MDS, which affects 7,000 to 12,000 Americans a year, the FDA said. Doctors also might immediately start using Revlimid for multiple myeloma.

Sales of the drug may reach $547 million in 2007, Geoffrey Meacham, a JPMorgan Securities Inc. analyst said in a note Tuesday.

Shares of Summit, N.J.-based Celgene have more than doubled this year. They rose $3.37, to $60.85, Wednesday.

Last year, the FDA cleared Pharmion Corp.'s Vidaza drug for MDS. Shares of the Boulder-based company fell 31 cents, or 1.7 percent, to $18.11 on Wednesday.

Guilty plea in service attacks against eBay

A man pleaded guilty to infecting about 20,000 computers with a worm and using them to launch denial-of-service attacks against eBay Inc. and other online businesses in 2003.

Anthony Scott Clark, 21, of Beaverton, Ore., entered the plea Tuesday in U.S. District Court in San Jose, Calif., where eBay is headquartered. He faces 10 years in prison, a $250,000 fine, three years' probation and other penalties, the U.S. attorney's office said Wednesday.

According to court documents, Clark and unidentified accomplices used a worm that exploited a Windows vulnerability to gain control of the computers.

Goodyear finishes sale of farm tire business

Goodyear Tire & Rubber Co. said Wednesday that it completed the sale of its farm tire business to Titan Tire Corp.

The sale includes Goodyear's farm tire manufacturing plant in Freeport, Ill., the tire maker said. Property, equipment and inventory are included, as well as a licensing agreement with Titan Tire, a division of Titan International Inc., to sell the farm tires they make under the Goodyear brand.

The farm business employs about 800 people, mostly at the Freeport plant, which makes tires used on tractors and other farm machinery. Titan has said no jobs would be lost.

The $100 million deal was first announced in February but was pending union approval.

LOCAL

EEOC settles case involving Golden facility

The U.S. Equal Employment Opportunity Commission settled a race discrimination and retaliation lawsuit against Exel Inc., a logistics company that operates a Golden facility, for $145,000.

The EEOC lawsuit alleged that Exel fired a black traffic clerk because of his race and because he reported to management that a white colleague had made racially offensive comments in the workplace.

Exel agreed in a consent decree with the EEOC to provide employee training on discrimination matters and ensure that there's "an appropriate complaint procedure for employees to voice their concerns about discrimination."

Exel spokeswoman Lynn S. Anderson said the company "denies, wholly, the allegations of discrimination." Exel agreed to settle the case, she said, "to avoid protracted litigation and because the terms and conditions of the consent decree are consistent with Exel's commitment to equal employment opportunities."

Exel uses the Golden facility to provide Coors Brewing Co. with warehouse and distribution services. Exel is a British company recently acquired by the parent of freight transit company DHL.

Red Hawk Industries buys Mass. security firm

Red Hawk Industries, a privately held Greenwood Village-based company, has purchased New England Security, a Massachusetts-based security systems integrator, for an undisclosed amount.

It's the 15th acquisition for Red Hawk, which installs and maintains ATMs, safes, vaults, safe deposit boxes and other security systems for financial institutions.

Red Hawk, founded in 1999, has about 130 Colorado workers and 700 employees nationwide.

ECONOMY

Confidence at 4-month high

Consumer confidence surged in December as declining gasoline prices and improving job opportunities buoyed spirits, boding well for spending in the new year.

The Conference Board said Wednesday that its Consumer Confidence Index advanced to 103.6 this month after recovering to 98.3 in November.

That was better than the 103 reading analysts had expected for December.

December's rise put the index at its highest level since Hurricane Katrina struck Aug. 29, devastating Gulf Coast states and disrupting fuel and trade for much of the nation.

In August, before the storm, the index registered 105.5.

• Crude oil climbed close to $60 a barrel in New York after Iran's deputy oil minister said the Organization of Petroleum Exporting Countries should cut output next month to "keep prices stable."

OPEC will decide at a Jan. 31 meeting in Vienna, Austria, whether to keep oil production near a 25-year high. The 11-member group agreed to keep its output quotas unchanged at 28 million barrels a day at a meeting this month. OPEC produces about 40 percent of the world's oil.

Crude oil for February delivery rose $1.66, or 2.9 percent, to close at $59.82 a barrel on the New York Mercantile Exchange.

Crude oil reached a record $70.85 a barrel on Aug. 30, the day after Hurricane Katrina struck Louisiana and Mississippi.

Prices are 43 percent higher than a year earlier.

THIS JUST IN ...

• Denver-based Rentech Inc. announced Wednesday that the U.S. Patent and Trademark Office has issued Rentech's 20th patent related to its Fischer-Tropsch coal-to-liquids and gas-to-liquids technology processes. It also was announced that James McDermott resigned his newly appointed position on Rentech's board of directors.

• Apartment Investment and Management declared a quarterly dividend of 60 cents a share on its Class A common stock for the quarter ended this month.

• Gordon, Hughes & Banks LLP has named Rich Kendall as senior management advisory services consultant, Eric Budreau as senior tax manager, David McKinney as tax manager and Carl Marshbanks as audit manager.

• Denver-based AmeriVest Properties Inc., a real estate investment trust serving small to medium-size office tenants, announced that it has retained Transwestern Commercial Services as property manager for its Dallas portfolio effective Sunday. As part of the transition, about nine property-level positions in Dallas will be assumed by Transwestern.

• Denver-based Hythane Co. will begin demonstrating its low-emission vehicle fuel system in support of China's national air quality program. The company has signed memos of understanding with five major cities to test and convert as many as 10,000 diesel buses to be powered by Hythane fuel, a blend of natural gas and hydrogen that reduces emissions by up to 50 percent compared with traditional natural gas. The project targets full conversion before the 2008 Olympics in Beijing.

• Douglas County-based EchoStar Communications Corp. and its Dish Network satellite-television service will offer the Deutsche Welle 24-hour news and information channel from Germany and Europe, beginning Sunday.

• NASA's Science Mission Directorate, Solar System Division, selected the Southwest Research Institute in Boulder for grants to support the Origins of Solar Systems research program. The grants' maximum award is $393,000.

• The National Housing Partnership is seeking approval from its limited partners to sell San Juan del Centro, a 150-unit apartment complex in Boulder, to AIMCO Equity Services.

• Denver-based holding company Chelsea Management Group Inc. said it will sell several mining properties held by subsidiary Stonebridge Resources Explorations Ltd. or seek venture partners for further development.

Compiled from News staff, The Associated Press, Bloomberg News, Scripps Howard News Service.

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