Local Biz Leaders Line Up, Pony up for Romney

20120220-NEWS--0001-NAT-CCI-CD_-- 2/17/2012 5:03 PM Page 1

www.crainsdetroit.com Vol. 28, No. 8 FEBRUARY 20 – 26, 2012 $2 a copy; $59 a year

©Entire contents copyright 2012 by Crain Communications Inc. All rights reserved Page 3 Local biz Health care reform: Insurance agents feel pinch leaders line Wizard of odds Brewing up growth up, pony up Bhargava bets on big returns as he with a new finally emerges from behind the curtain business plan for Romney BY DANIEL DUGGAN his various funds: Desalinating lished earlier this month. CRAIN’S DETROIT BUSINESS sea water at 80 percent less than Crain’s is his first local inter- Bulk of statewide current cost, a hydroponic agri- view. Inside Manoj Bhargava, the man be- cultural system to use vacant $1.6M raised here hind 5-Hour Energy, is a man who warehouses as farms, an addi- Potential for a global impact Energy Conversion CEO has enjoyed being anony- tive to make diesel fuel 20 BY MIKE TURNER mous. percent more efficient, and Of his new endeavors, the de- on end of the line, Page 6 SPECIAL TO CRAIN’S DETROIT BUSINESS “Some people say that a way to remove mercury salination of saltwater is the one they don’t want to toil in emissions from the coal he’s most excited about. LANSING — At least in terms of obscurity,” the 58-year- used in power plants. The technology is a machine Focus: Law monetary contributions to the old Farmington Hills Bhargava was thrust that removes salt from water at a presidential campaign of Detroit- resident told Crain’s. “I NONPROFIT into the public eye last cost of only 20 percent of reverse born Mitt Romney, the Southeast don’t mind that. I’d be May when Crain’s re- Michigan business community fine if I were to toil in STRATEGY ported he was the $100 See Bhargava, Page 24 has a lot at stake in the Feb. 28 Re- obscurity.” Charitable million investor behind publican prima- But it’s a luxury, donations local private equity ry. Bhargava says, that he’s large, but fund Stage 2 Innovations The list of not likely to enjoy much complicated, LLC. Page 25 Romney donors longer. Up to that point, few reads like a The under-the-radar realized that the owner Largest settlements and who’s who of De- billionaire says he now of 5-Hour Energy was verdicts of 2011, Page 13 troit-area busi- has a pipeline of high- local, much less that nesspeople. potential investments that are his company, Living Essentials There’s shop- likely to throw him into the lime- LLC, had sales of $1.2 billion in This Just In ping mall mag- light. 2011. nate A. Alfred “If even one works out it will Despite being identified, Romney Taubman of be outrageous,” he said. “And if Bhargava declined to be in- Blue Cross appoints Bloomfield Hills; that’s the case, I won’t be able to terviewed and continued Bolton medical director TV ADS Peter Karmanos, hide any longer.” to do so until agree- CEO of Detroit- Among the invest- ing to a Forbes in- Mary Beth Bolton, M.D., is Spending up: In based Compu- ments spread among terview pub- the newest medical director tight race, ware Corp.; “super PACs” at Blue Cross Blue Shield of and Daniel Michigan. make their mark, Page 22 Gilbert, Bolton, chairman of De- who was troit-based chief Quicken Loans Inc. — to name just a health of- few who have given the $2,500 max- ficer at imum that federal election rules al- Health Al- low individuals to make to a candi- liance Plan date for each election. Gilbert also of Michi- is one of the Michigan finance co- gan for 10 chairmen for Romney’s campaign. years end- Bolton Michigan’s turn in the primary ing in Au- cycle also has shone the national NATHAN SKID/CRAIN’S DETROIT BUSINESS gust 2010, was Blue Cross spotlight on the issues affecting vice president of medical and the region, including the 2009 fed- care management clinical eral bailouts of General Motors Co. programs from 1997 to 2000. and Chrysler Group LLC. Romney’s After leaving HAP, Bolton opposition to the bailouts is a hot A different chamber for music: Piquette Plant was a medical home review- topic, although pundits differ on er with the National Commit- whether that stance will hurt him BY SHERRI WELCH ries this year and two additional tee for Quality Assurance. in the primary. CRAIN’S DETROIT BUSINESS performances at yet-to-be-deter- Bolton, a former oncology Southeast Michigan donors ac- mined sites in the coming year. nurse, was named 2009 count for the bulk of the $1.6 mil- Come April, the sound of a horn A $68,000 grant from the Com- Woman Physician of the Year lion raised statewide by Romney once again will reverberate munity Foundation for Southeast by the Michigan State Medical through Dec. 31 — according to through Detroit’s historic Pi- Michigan to sup- Society. She also was named a records available from the Federal quette Avenue Plant. port programs Woman to Watch in 2009 by Election Commission. Nationally, The Detroit Chamber Winds & around the De- Crain’s Detroit Business. Michigan supporters have given Strings plans to break from its rou- troit Chamber — Jay Greene tine of performing at suburban Winds’ 30th an- See Romney, Page 22 churches with a new series beginning COURTESY OF WILL LAWSON The factory where Henry Ford first niversary sea- April 1 at the birthplace of Henry built Model T’s will host a concert by son will cover Ford’s Motel T. the Detroit Chamber Winds & Strings. the estimated The Piquette Plant perfor- $5,000 cost of mance will set the tone for “Struc- presentations that highlight the the first perfor- turally Sound,” a series that will significance of the space. mance, said feature Detroit Chamber Winds & In 2000, the Model T Automotive Maury Okun, Okun Strings ensembles performing at Heritage Complex Inc. acquired the executive director of the Detroit architecturally interesting build- plant with a mission to preserve it. Chamber Winds, the Great Lakes

NEWSPAPER ings, with music programmed es- The Detroit Chamber Winds pecially for the site and spoken plans one concert as part of the se- See Music, Page 25 20120220-NEWS--0002-NAT-CCI-CD_-- 2/17/2012 3:15 PM Page 1

Page 2 CRAIN’S DETROIT BUSINESS February 20, 2012

MICHIGAN BRIEFS Snyder, Schuette oppose Lansing First LEED-certified brewery casino; supporters push ahead Kellogg adds Pringles crunch to snap, crackle, pop If you read last week’s Crain’s Michigan Business story about Two people who probably won’t Perhaps Kellogg Co. executives sensed the limited Kellogg was able to buy Pringles after Diamond “smart” meters (“To watt end?” be attending public forums on a pro- appeal of beer and Frosted Flakes or an oaky Foods Inc.’s proposed $1.5 billion acquisition fell Page 8), you know that Brewery Vi- posed casino in Lansing are Gov. Chardonnay washing down a fistful of Fruit Loops. through. Diamond replaced its CEO and CFO after vant in Grand Rapids takes energy Rick Snyder and Attorney General (White zinfandel, perhaps?) What is certain is that the company’s board found payments to walnut Bill Schuette. efficiency seriously. breakfast isn’t quite as important a meal at the Bat- growers had been booked in the wrong periods. So much so that it has been In a letter last week, they said tle Creek-based cereal maker. The transaction will reduce Kellogg’s earnings the plan is “inconsistent with granted LEED Silver certification. Last Wednesday, Kellogg scooped up the Pringles this year by up to 16 cents a share, the company state and federal law.” The Sault Owners Jason and Kris Spauld- line of potato snacks for $2.7 billion from Procter & said. Kellogg said that debt is likely to increase by Ste. Marie Tribe of Chippewa Indians ing say theirs is the first commer- Gamble. The deal makes Kellogg the world’s second- about $2 billion and that it will limit stock buybacks responded by saying that’s not go- cial brewery in the U.S. to achieve biggest maker of so-called savory snacks behind for about two years to reduce that debt. ing to stop the $245 million pro- the LEED designation. Frito-Lay. Pringles now joins an assault of Kellogg Pringles is sold in more than 140 countries and ject, which would include a LEED’s leaders, the U.S. Green salted snacks that includes Cheez-Its and Keebler gets two-thirds of its $1.5 billion in annual revenue 125,000-square-foot casino next to Building Council, told The Grand Townhouse and Club crackers. from overseas. the Lansing Center and two park- Rapids Press that it could only at- ing decks. test that Brewery Vivant is the Snyder and Schuette write that first commercial brewery in they will “take whatever steps are Muskegon and an office in Grand CEO Gary Black, who joined Next biggest distributor, with a net- Michigan to become so certified. necessary to prevent the opening Rapids, has purchased a company I.T. after the acquisition. work of more than 300,000 sales- of the proposed casino, and if the in the border town of Sturgis to ex- — Matthew Gryczan people across China, The Journal Tribe persists in these efforts, it pand into a wider area that includes reported. That’s one in every 10 Find business news from does so at its own risk.” Indiana as well as Michigan. With sales reps like Holly Chen, Amway reps. Chen’s annual rev- around the state at crainsdetroit The two men oppose expansion Eric Ringelberg, who founded enue is estimated at $8 million, the .com/crainsmichiganbusiness. of tribal gambling and said the Next I.T. in 2001, said he pur- Amway plant better get started story said. The Journal quotes Sign up for Crain's Michigan Chen, 68, as saying Amway is “de- Business e-newsletter at crains plan violates state and federal law chased RGB Network Services Inc. Last week, Amway Corp. officials and conflicts with other tribal signed by God, only for me.” detroit.com/emailsignup. because RGB fits in well with his showed journalists a new $24 mil- gambling compacts in Michigan. company’s offerings and has estab- lion plant, where the Ada-based Lansing Mayor Virg Bernero, lished long-term relationships company soon will start making who previously had told casino op- with major industry vendors. Nutrilite products. The Nutrilite CORRECTIONS ponents to “screw off,” said, “We Next I.T. employs about 30 full- respectfully disagree” with Snyder line of vitamins, powdered drinks, A Feb. 13 story should have said that Henry Ford Health System’s Cen- timers in information technology and Schuette. snacks and bars accounted for ter for Integrative Medicine in Novi uses chiropractors, acupuncture services and Web-based applica- more than 40 percent of 2010 sales and neuromuscular therapy to treat patients with back and neck pain. tions. With five employees, RGB of more than $9 billion, The Grand Crain’s reported that this was done at Henry Ford’s Center for Integra- Grand Rapids’ Next I.T. buys firm Network has been providing in- Rapids Press reported. Impressive, tive Wellness in Southfield. stallation and maintenance to until you read The Wall Street Crain’s list of largest meeting facilities in the Feb. 6 issue should near border to enter Indiana small and midsize companies Journal profile of Amway’s top have listed Cobo Center at No. 1. Its total square feet of meeting space is Next I.T., an information technolo- along the Michigan-Indiana bor- salesperson. 897,500, including 626,000 square feet of exhibit space. gy company with headquarters in der for about 22 years, said former Holly Chen is the company’s

AN ATTORNEY THE RIGHT ATTORNEY

Work with a legal team that’s built to do what’s right. While most law ﬁrms claim to offer you the best attorney for the job, they’re simply not structured to do so. That’s where we’re different. We have the ﬂexibility and resources to tailor our services precisely to your needs. That’s a better partnership.

February 20, 2012 CRAIN’S DETROIT BUSINESS Page 3 Health insurance agents feel pinch Second Stage Extra

enacted a regulation Jan. 1, 2011, Insurers cut fees to comply with federal regs requiring agent commissions paid by insurance companies to be BY JAY GREENE ity Health have cut or restructured Rogers, R-Howell, who represents counted as administrative expens- CRAIN’S DETROIT BUSINESS commissions to prepare or adjust five counties including Oakland and es that are part of a formula called for federal administrative expense Livingston, has the medical-loss ratio. Independent health insurance restrictions. co-sponsored Health insurers are allowed to agents and brokers across Michi- Agents say that has cut income, H.R. 1206, to ex- count money spent on quality im- gan are suffering revenue losses of hurt their businesses and poten- empt fees from provement programs toward their 15 percent to 40 percent because tially could affect how much time administrative medical-loss ratio — the percent- federal regulations limit insur- they spend advising clients, pri- costs. A compan- age of paid premium dollars spent ance company administrative fees marily companies with fewer than ion bill has been on provider payments and admin- Acquisition strategy to 20 percent of premiums in the 100 employees. introduced in the istrative expenses. individual and small-group mar- “Personally, my revenue was re- U.S. Senate — But the regulation forbids insur- paying off for supplier ket, several agents told Crain’s. duced approximately $45,000 last S.B. 2068. ers from budgeting agent commis- Over the past two years, insur- year,” said Mike Embry, legislative As a health sions into the 15 percent allowed of appliance parts, Page 10 Embry ance companies including Blue chairman of the Michigan Association reform cost con- for administrative expenses in the Cross Blue Shield of Michigan, Cigna, of Health Underwriters. tainment feature, the U.S. Depart- Humana, United Healthcare and Prior- To help agents, U.S. Rep. Mike ment of Health and Human Services See Agents, Page 21 Company index

These companies have significant mention in this week’s Crain’s Detroit Business: 1st Source Servall ...... 10 Demand has Inforum sets Ackerman Ackerman & Dynkowski ...... 18 AGIS ...... 21 American Furukawa ...... 13 Atwater Brewing ...... 3 Automotive Industry Action Group ...... 12 Atwater on women’s Bill & Rod’s Appliance ...... 11 Blue Cross Blue Shield of Michigan ...... 3 Broaching Machine Specialties ...... 12 Brooks Kushman ...... 18 growth binge sights on Chamber Music Society of Detroit ...... 25 Colasanti Group ...... 17 Consumers Energy ...... 16 Creative Benefit Solutions ...... 21 Brewery changes Déjà vu Consulting ...... 15 angel funds Deneweth, Duggan & Parfitt ...... 17 Detroit Chamber Winds & Strings ...... 1 biz model, ready Detroit Symphony Orchestra ...... 25 BY SHERRI WELCH Dykema Gossett ...... 17 for next round CRAIN’S DETROIT BUSINESS Energy Conversion Devices ...... 6 Fabian, Sklar & King ...... 15 BY NATHAN SKID The Inforum Center for Leadership Facca, Richter & Pregler ...... 17 Fatima International ...... 14 CRAIN’S DETROIT BUSINESS has added angel investor education to two programs launched in Fedek Group ...... 14 When Mark Rieth acquired the Ferrebee & Associates ...... 14 January to spur more high-tech Frank Haron Weiner ...... 14, 17 assets of Atwater Brewing Co. in 2005, women entrepreneurs. Future Financial Investments ...... 17 he said he bought a restaurant that The goal is to increase available Health Alliance Plan ...... 21 just so happened to brew beer. funding for startups — especially Hertz Schram ...... 15 In June 2010, five years after the female-owned technology ventures. Hirotec America ...... 4 $500,000 purchase, Rieth closed the “So many of our members are an- Inforum Center for Leadership ...... 3 120-seat restaurant to focus solely Innovation Ventures ...... 24 gel investors, and they don’t even Jackson Lewis ...... 15 on brewing beer. know it,” President and CEO Terry Kerr Russell & Weber ...... 17 Since then, the company has Barclay said. Krause Benefits ...... 21 tripled sales and is outgrowing its They’re in- Law Offices of Barry Steinway ...... 18 current 18,000-square-foot River- vesting in the Law Offices of Chris Peter Kokkinakos ...... 14 town operation at 237 Jos. Campau pizza parlor of a Living Essentials ...... 1, 18 Mantese Honigman Rossman & Williamson ...... 14 St. family member “I took over with zero aspira- Michigan 21st Century Jobs Fund ...... 23 or friend and Michigan Association of Health Underwriters . . . . . 3 tions to be a restaurateur,” Rieth calling it a loan, Michigan Brewers Guild ...... 23 said. “I kept it open for a while for she said. MillKing It Productions ...... 23 the consumer base, but it was nev- “What we New Economy Initiative ...... 23 Olsman, Mueller, Wallace & MacKenzie ...... 15 er my focus.” GLENN TRIEST want to do is Original Equipment Suppliers Association ...... 4 Since then, Rieth has trans- Owner Mark Rieth is ready to ramp up production at Atwater Brewing Co. in kick their game formed the one-time brewpub into Barclay Red White & Blue Fund ...... 22 Detroit. Plans call for more brewing tanks, a new building or an expansion of up a notch, so … Restore Our Future ...... 22 a large-scale brewery complete the existing operation (below). they’re also aware of opportunities Ronald B. Rich & Associates ...... 17 with its own in-house bottling and to invest in other angel funds and Safeway Acquisition ...... 18 labeling line. … to become involved in the deci- Shore Financial Services ...... 16 When Rieth took over, Atwater sion-making” for those funds. Sommers Schwartz ...... 15 The education effort also in- Sullivan Ward Asher & Patton ...... 15 See Atwater, Page 23 United Solar Ovonic ...... 6 cludes venture capital, and Info- Vandeveer Garzia ...... 18 rum is tapping several organiza- WDIV-Channel 4 ...... 22 tions for help in teaching potential WXYZ-Channel 7 ...... 22 women investors, including the An- gel Capital Association in Overland Park, Kan., and the Michigan Ven- Department index ture Capital Association. It doesn’t plan to start a fund it- BANKRUPTCIES ...... 4 self but rather wants to lead its BUSINESS DIARY ...... 19 members to existing funds, includ- CALENDAR ...... 19 ing Grand Angels in Grand Rapids, JOB FRONT ...... 20 Ann Arbor Angels and Grosse Pointe Farms-based venture capital firm CLASSIFIED ADS ...... 21 Belle Capital LP, launched last year KEITH CRAIN...... 8 LETTERS...... 8 See Inforum, Page 23 MARY KRAMER ...... 9 OPINION ...... 8 Workable business ideas Making it in Detroit PEOPLE ...... 20 Registration is open for the second IDEA: A closer look at people behind creative THIS WEEK @ RUMBLINGS ...... 26 Detroit conference, held by Crain’s and businesses and the programs that WWW.CRAINSDETROIT.COM Advertising Age, crainsdetroit.com/events support them, DetroitMakeItHere.com STAGE TWO STRATEGIES ...... 12 WEEK ON THE WEB ...... 20 20120220-NEWS--0004-NAT-CCI-CD_-- 2/17/2012 4:59 PM Page 1

Page 4 CRAIN’S DETROIT BUSINESS February 20, 2012 ShowShow Them Them What What Hirotec America YouYou StandStand For For expands, plans BBB Accreditation is a commitment to fairness and honesty that lets to add 200 jobs consumers know you are a business BY DUSTIN WALSH CRAIN’S DETROIT BUSINESS

they can trust - a business that Job openings across Southeast honors its promises and embodies Michigan continue with the expansion of Auburn Hills-based tooling confidence they deserve. maker Hirotec America Inc. The U.S. subsidiary of Japan- Your customers start with based Hirotec Corp. is looking to hire 200 employees, nearly dou- bbb.org. bling its U.S. workforce of 250, on the heels of new contract wins, Shouldn’t you? said President Jim Toeniskoetter. The new openings include around 120 skilled labor, engineering and office positions, he said. Hirotec America recently signed a multiyear deal to supply a local automaker with its full line of door tooling equipment. A confidentiali- ty agreement prevents Hirotec from revealing the customer’s name. “We’ve seen a significant increase in our workload amongst our major customers,” Toeniskoet- ® ter said. “We’ve become more close- ly aligned with our customers, and Start With Trust we’re setting new benchmarks.” Hirotec America’s revenue increased sharply to $144 million in Better Business Bureau 2011, up more than 200 percent from Serving Eastern Michigan and the Upper Peninsula 2009’s total of $47 million. The sup- Call 248-223-9400 to learn more plier expects revenue of $175 million in 2012, Toeniskoetter said. or go to bbb.org The increased demand led Hi- rotec to lease new facilities in Chesterfield Township and Port Huron. The 85,000-square-foot Chesterfield plant and the 174,000- square-foot Port Huron plant will be used for testing and assembly. Finding talent has become an is- Your Bank’s sue for many suppliers in South- east Michigan, Neil De Koker, president of Troy-based Original Equipment Suppliers Association, told Not Lending? Crain’s earlier this month. “The technically qualified people joined other industries when we had layoffs that totaled 300,000 in the industry,” he said. Toeniskoetter said Hirotec is ex- periencing some hiring trouble and is seeking more college gradu- ate level employees. “We’ve had to be creative in finding new employees,” he said. “We’re really adding a lot of new college graduates now. We’ve found that with our environment, we can bring college grads up to speed rather quickly.” Dustin Walsh: (313) 446-6042, Coffee and [email protected]. Twitter: ours are. @dustinpwalsh Controversy Call for a free consultation. Sponsored by Detroit Chapter of the Loan amounts: $1,000,000.00 and above. National Association of Health Executives. BANKRUPTCIES Guest speaker Valerie Myers, Ph.D., professor of s Investment Real Estate s Equipment The following businesses filed for s Owner Occupied Real Estate s Turnaround Consulting Management and Organizations at the University Chapter 7 or 11 protection in U.S. Bank- s Lines of Credit s Loan Modiﬁcations ruptcy Court in Detroit Feb. 10-16. Un- of Michigan’s Department of Health Management s Accounts Receivable s Bank Workouts der Chapter 11, a company files for re- and Policy and Ross Business School will present organization. Chapter 7 involves total liquidation. Diagnosing Rankism: Measuring and Improving Energy Conversion Devices Inc. (assets: Intimidating Behaviors at Work. $986.3 million; liabilities: $249.1 million), Solar Integrated Technologies Feb. 24, • 7:30 a.m. to 9:30 a.m. Inc. (assets and liabilities not available), and United Solar Ovonic LLC (as- Hospice of Michigan,400 Mack Ave., Detroit sets and liabilities not available). All GDAHC and NAHSE members: $35 each., businesses located at 3800 Lapeer Road, 800.509.3552 non-members: $50 each. Includes continental breakfast. www.eclipsecapitalgroup.com Auburn Hills. ECD and United Solar, 2207 Orchard Lake Road, Sylvan Lake, MI 48320 voluntary Chapter 11. Solar Integrated To register, go to www.gdahc.org “Since 1997” Technologies, voluntary Chapter 7. — Meghana Keshavan DBpageAD.qxp 2/14/2012 2:54 PM Page 1

KEEP BUSINESS GOING ON THE GO. Stay connected in and out of the office with the power and speed of Verizon 4G LTE, America’s Fastest 4G Network.

Be more productive with powerful business apps.

Intuit® GoPayment® Take credit card payments on the go and get paid on the spot

Tango Video Calling Add another dimension to customer service with mobile video calling

Yahoo! Messenger Video calls, chat, PC calls, file sharing, photo sharing, SMS and more

Lookout Mobile Security Protect your phone with anti-virus and security, backup and restore, SAMSUNG plus Find My Phone GALAXY TAB™ 10.1 A 4G LTE powerhouse of productivity

BUY ANY PHONE, GET $100 OFF A 4G LTE TABLET. New 2-yr. activation required on all devices. Smartphones require data pak; tablets require a 4G Mobile Broadband plan. DROID RAZR BY MOTOROLA Strong as steel, thin as a blade, 4G LTE fast $ 99 for 16 GB 199 Droid RAZR No rebate required. New 2-yr. activation & data pak required.

CONNECT UP TO 5 WI-FI–ENABLED DEVICES.

NEW! VERIZON JETPACK™ $ 99 $69.99 2-yr. price – $50 mail-in rebate debit card. Requires 19 new 2-yr. activation on a 4G Mobile Broadband plan.

Visit any Verizon Wireless store today to 1.800.VZW.4BIZ(4249) talk about our Small Business solutions. verizonwireless.com/smallbusiness

Activation fee/line: $35. IMPORTANT CONSUMER INFORMATION:Subject to Cust. Agmt, Calling Plan, rebate form & credit approval. Up to $350 early termination fee/line & add’l charges apply to device capabilities. Offers & coverage, varying by svc, not available everywhere; see vzw.com. Limited-time offer. Restocking fee may apply. Rebate debit card takes up to 6 weeks & expires in 12 months. LTE is a trademark of ETSI. 4G LTE is available in 195 cities in the U.S. DROID is a trademark of Lucasfilm Ltd. and its related companies. Used under license. MiFi is a trademark of Novatel Wireless, Inc. © 2012 Verizon Wireless. E6509 20120220-NEWS--0006-NAT-CCI-CD_-- 2/17/2012 3:14 PM Page 1

Page 6 CRAIN’S DETROIT BUSINESS February 20, 2012 CEO confident subsidiary United Solar will live on after ECD bankruptcy filing

The end is near for successful technology, be- We’re doing a little bit of manufac- Auburn Hills-based Ener- cause of lower manufacturing in Mexico for specific cus- gy Conversion Devices Inc., turing costs. So the ques- tomer orders. We’ve got to be very which filed for Chapter 11 tion is, what thin-film careful. As we get orders, we’ll bankruptcy protection on companies will survive? manufacture. Tuesday. There will be no We’re getting new efficien- comeback this time for cies in new products. You’ve engaged Quarton Partners the maker of solar photo- Right now, we’re at to find a buyer who will take United voltaics, which was 8.2 percent. In July, we’ll Solar out of bankruptcy and recapital- founded in 1960 by Stan start selling laminates ize it. And you’d like to see United So- and Iris Ovshinsky and that are 8.8 percent effi- lar survive with that name. But a buyer has lost money nearly cient. By mid-2013, we’ll might be looking for equipment and every year since. have a product that’s have no interest in a surviving entity. The company will not 12 percent efficient. That’s That’s a possibility. What do we survive Tuesday’s filing, Julian Hawkins, better than our thin-film have? We have machinery. We according to President Energy Conversion competitors can do. have plants. We have some inven- and CEO Julian Hawkins. Devices Inc. tory. But the real value is our Famous around the But those improvements know-how. And know-how is peo- world for its technology — nearly come at a capital cost. ple. It’s an R&D team. It’s an engi- every battery maker in the world We need $25 million to convert neering team. The business plan licenses its patents — and equally our first line, and to convert all is: What do we have that Quarton renown for its R&D, ECD has al- our lines we need $100 million. We Partners is going to help us sell? ways had trouble making actual went out to the investment com- What gives a buyer the best value? products to sell for a profit, and ru- munity last year to see if we could We think that’s having Uni-Solar mors of its death have been part of capitalize the company, but it was continue as an ongoing concern, its existence for decades. too much to ask for. When you and under that name. The rumors will become fact lat- have $263 million in notes due next er this year, Hawkins told Crain’s year, that’s really a problem. We So, last year you talk to the invest- reporter Tom Henderson. had to figure out a way to satisfy ment community about recapitalizing. that debt, and after looking at a You’re told you need to get rid of your What’s the prospect for subsidiary number of models, Chapter 11 was debt. What’s been the reaction, then, United Solar Ovonic LLC’s thin-film the only one that made sense. since the announcement you were go- photovoltaic solar panels? They’re ing to do just that through Chapter 11? easier to work with and install than Are you still able to sell products We have received significant in- crystalline panels but less efficient since the filing? terest and inquiries from people and more expensive on a cost-per-watt The feedback from suppliers who have what I would say is a reli- basis. and customers has been amazing. gious belief in what we have. And Thin-film will eventually be the Customers are still placing orders. it’s a belief that you can also put down as hard numbers on a business plan. This dog will hunt.

How does your technology compare with the Chinese crystalline panels flooding the market? Typically, Chinese product is about 12-13 percent efficiency. But crystalline has to be aimed directly at the sun to get maximum efficiency. As you know, the sun has a habit of moving, which reduces crystalline efficiency by 10 to 15 percent. Thin film doesn’t have to be aimed directly at the sun, and it works on cloudy days or if it’s coated in dust. The products that are coming You Deserve to See All of Your Commercial Real Estate Options out of China are basically 60-year- old technology. It’s just slices of silicon wafer, which limits what you can do. And you’re limited to how far the cost can come down. Let’s be honest: The Chinese product in the market is subsidized by the Chinese government. If you make something the same as the Chinese make, you’re in trouble. We make something totally different.

What is the timetable for all this? Our expectation is we should know clearly if someone is going to Real Estate Strategy purchase us in the next 90 days.

Tenant Representation Last week, you sold the Ovonic Bat- tery Co. subsidiary to BASF for Buyer Representation $58 million in cash. Your stake in the Ovonyx memory-storage business unit Project Feasibility that Intel Corp. has a majority stake in Before you make a move, let us uncover every commercial is for sale. Once that goes, it will leave Construction Oversight just the United Solar business unit. real estate option. As an unbiased, tenant representative, Once it is bought, that’s the end of we bring more thought per square foot. Incentives ECD, correct? Nasdaq delisted ECD when we Lease Administration announced the bankruptcy, al- pmcresa.com 248.223.3500 though its shares still trade. But after the Chapter 11 process plays out, ECD will cease to exist. DBpageAD.qxp 2/8/2012 11:07 AM Page 1

CHRONOMAT 44 The benchmark in the field of mechanical chrono- graphs, equipped with an ultra-sturdy case that is water-resistant to 500 meters (1,650 ft), and with Manufacture Breitling Caliber 01, the most reliable and high-performance selfwinding chronograph movement, chronometer-certified by the COSC. $13,120

WWW.BREITLING.COM 20120220-NEWS--0008,0009-NAT-CCI-CD_-- 2/17/2012 5:05 PM Page 1

Page 8 CRAIN’S DETROIT BUSINESS February 20, 2012 OPINION LETTERS News to cheer: We’re Unions drive divisiveness Editor: MBA programs in Shanghai, Ji- Crain’s Detroit Business After reading the Crain’s article nan, and Harbin. In addition, it is welcomes letters to the editor. cooperating with two Chinese uni- “Right-to-work policy a biz attrac- All letters will be considered for tor? Maybe not” (Feb. 12), I must publication, provided they are versities on joint undergraduate not tops in corruption say this is one of the few times I degree programs in Hangzhou signed and do not defame completely disagree with our gov- individuals or organizations. (marketing) and Nanchang (envi- ith two former aides indicted and federal corrup- ernor: His stance that the issue of Letters may be edited for length ronmental science). The universi- tion investigations continuing, embattled Wayne a right-to-work state is “too divi- and clarity. ty’s current enrollment in China tops 195 students. County Executive Robert Ficano is adamant he sive.” Write: Editor, Crain’s Detroit W It also enrolls nearly 300 inter- In fact, divisiveness has been will not resign. Business, 1155 Gratiot Ave., the order of the day in Michigan Detroit, MI 48207-2997. national students on its campus in Unless there is clear evidence of Ficano’s own culpabili- with its union-mandated work- Livonia, among which are 30-50 Email: [email protected] ty, it seems this scandal will be another in a long string of force as opposed to allowing our Chinese students any given semes- revelations about what was going on right entrepreneurial spirit drive our ter. The impact of the revenue gen- under the county executive’s nose. Barring economy. Educating Chinese erated through these programs is The article had a lot of input felt throughout Southeast Michi- recall, there’s no mechanism to remove him, from academia and political types. a bigger picture gan as it supports institutions as and he doesn’t run for office again until I and other small-business owners, Editor: they grow, develop, and offer cur- 2014. who pay taxes to support these I read with interest Meghana ricula that meets the educational Perhaps we may all find solace in a recent “experts,” need to get in the fray as Keshavan’s article, “Michigan needs of local communities. analysis of Justice Department data by a for- it relates to the economic needs of universities recruit Chinese stu- Another significant aspect of the export of U.S. education is the mer Chicago alderman-turned-political-sci- Michigan. The positive answers dents to add diversity, revenue,” we need for Michigan’s economic in the Feb. 6 edition of Crain’s De- impact it has on Chinese individu- ence professor. Dick Simpson pegs Chicago growth will not come from politi- troit Business, but I feel it does not als, Chinese society, and, ultimate- Ficano as the most corrupt city in the country, and cians, or academia, but instead present a complete picture of the ly, U.S. society. Higher education Illinois the third-most corrupt state. from entrepreneurs. extent of involvement of local uni- is, first of all, good for the individ- More than 1,500 public corruption convictions have been Entrepreneurs take the mone- versities in educating Chinese stu- uals who are educated. Economic and social opportunities open up, racked up in the federal judicial district that includes Chica- tary risks to employ the unem- dents, nor does it explore some of ployed, and we take a dim view of a the underlying implications of ex- and the quality of their lives is go since 1976. Los Angeles ranks No. 2. Other states and cities union with no investment in an or- porting U.S. knowledge capital. vastly improved. But higher edu- with high tallies include New York , New Orleans and the Dis- ganization, and which drives up For instance, Madonna Univer- cation is also a public good; it ben- trict of Columbia. operational costs and ultimately sity has been working in China efits Chinese society by preparing This is one list Detroit and Wayne County can be thankful negatively impacts the success of since 1998 recruiting students but individuals who will be productive the organization. also, and perhaps more important, citizens who can inject the status to miss. quo with creative energy. Bob Sibley offering on-site programs there. In Wanted: Immigrant success stories White Lake Township the past 14 years, it has offered its See Letters, Page 9 If Gov. Rick Snyder wants a talking point for his quest to make Michigan a destination for immigrant entrepreneurs, he has one in Manoj Bhargava. TALK ON THE WEB As Daniel Duggan reports on Page 1, From www.crainsdetroit.com Bhargava, the entrepreneur behind 5-Hour The management and bureaucrats Re: Economist says recession behind us Reader responses to stories and Energy products, has been so low-key that seem to think corruption is a normal James Glassman certainly has blogs that appeared on Crain’s most people don’t know the energy product part of their business model. some rose-colored glasses on. But website. Comments may be Buckeye1 empire is based here. But there’s more. The remember, these “pundits” and edited for length and clarity. low-key billionaire is putting money into “prognosticators” work with oth- promising technologies that could fuel er peoples’ money, and so what’s erous-with-other-people’s-money You can be sloppy when no one is tremendous innovation — and jobs. the issue if their projections turn state eager to get cool jobs. Let’s re- watching. member this the next time a crony T Sparky Bhargava From a no-frills office he shares with four out to be wrong or actually oppo- site? capitalist cozies up to the govern- other executives, Bhargava is on the hunt for game-changing EconomicRealist ment feed trough and just say no. Re: ECD files for Chapter 11 technologies — from desalination of sea water to highly effi- MrSin cient hydroponic farming — that one of his funds could invest It was all downhill since they Re: Raleigh Studios bond payment kicked out the old man Stan. in. The state has lost hundreds of Re: Wayne County officials charged Emile Lauzzana A college dropout and former cab driver, his story could millions on the movie industry I’m so sick of all this corruption be another American dream of success. boondoggle. Now the State of in Wayne County and the city of This bankruptcy highlights the Michigan might use his story — and the scores of other Michigan Retirement System will Detroit since I moved here in 1979. challenges facing alternative-energy sources and the business of provid- immigrant success stories — to create policies and programs lose millions more cleaning up the It doesn’t matter who the players mess. Meanwhile the “hot money” are or who are the supposed leading them. to welcome more. has left the state for the next gen- ers of these governmental units. Timothy Dinan KEITH CRAIN: Bailouts will be a land mine for politicians It wasn’t that long ago, and yet essary to run the busi- the blame on the cur- advantage since it was and is will- ex-auto czar, who has plenty of his there are still so many ways to in- ness. That was before rent administration, ing to pay its bondholders and still own issues that call into question terpret what happened with the the financial crisis hit when it was President pay employee pensions and ac- his credibility. bailout of the auto industry. the country. George W. Bush who be- knowledge its debts today. That There will be plenty of debate Make no mistake, the controver- But fast-forward to to- gan the bailout of both has to put Ford at a substantial dis- for decades about the government sy all started when the three CEOs day, and there is a field GM and Chrysler. advantage in pricing an automo- bailout of the auto companies. from the Detroit 3 flew to Washing- of land mines for politi- Rick Santorum was bile. There are plenty of important is- ton in separate Gulfstream G-IVs. cians running for the opposed to the federal Meanwhile, we’ve got a couple sues to debate in Michigan for all Sitting at the table in front of a con- Republican nomination government bailout as of politicians criticizing the of the Republican presidential can- gressional inquiry, not one of them in Michigan. well, and that may be bailout even now. didates. It would seem that those did themselves any good except Mitt Romney is going the saving grace for Without the bailout, either GM issues are far more important to- Alan Mullally, who simply said to have a real problem both of them. or Chrysler or both would be out of day than hashing over the history Ford didn’t need the money and with his comments both Both CEOs of General business, along with hundreds of of an automotive crisis that hap- didn’t want it. Luckily for Ford, recently and long ago, when he Motors and Chrysler have been re- suppliers and probably Ford, too. pened a few years ago. Mullally had mortgaged the compa- then and now opposed the GM placed; GM’s more than once. No one should criticize the But for politicians to criticize ny months before when he realized bailout. Ford, which chose to go it alone, bailout. the bailout now in Michigan seems it simply didn’t have the cash nec- He made a mistake by putting seems to me to be at a definite dis- And no one should listen to the very foolish at best. 20120220-NEWS--0009-NAT-CCI-CD_-- 2/17/2012 10:56 AM Page 1

February 20, 2012 CRAIN’S DETROIT BUSINESS Page 9 MARY KRAMER: Taking sides for a shared political goal

Tired of political give and take? tors for market share. Riney, has set a goal of Medical Main Street efforts have, our annual Health Care Leadership Michigan’s presidential primary But the potential to attracting medical and as one county staffer said, pulled to- Summit have asked for each year: is Feb. 28, but you can be part of at grow this industry health care confer- gether traditional competitors: “It’s an inventory of “best in class” treat- least one bipartisan moment looms large. That might ences and symposia to like getting Iraq, Iran and Israel to- ment programs, a scorecard on fed- Thursday night when speakers be one reason emails the region. gether at the same table.” erally funded medical research, and from both ends of the political and calls started com- Alexander said the Patterson has said he began fo- profiles of life science and medical spectrum joust at the annual ing in last week asking supplement would be cusing on health care when he no- device companies and technologies. fundraiser for the Michigan Politi- for extra copies of our shown to prospective ticed that Beaumont Health Sys- If you missed the supplement, cal Leadership Program. Medical Magnet supple- meeting planners of tem was taking over the No. 1 slot you can order copies for $1 each In one corner, Pulitzer Prize- ment that was part of health care meetings. as the county’s largest employer, from our customer service depart- winning Washington Post colum- the Feb. 13 issue of An international cardi- outpacing the auto companies. ment at (877) 824-9374. nist Eugene Robinson. In the oth- Crain’s. ology group that has The supplement was Crain’s Mary Kramer is publisher of er, Ari Fleischer, once White “Thank you, thank met only twice in the own independently reported con- Crain's Detroit Business. Catch her House press secretary to President you,” said Larry Alexander, CEO U.S. is a current target. tent, but Medical Main Street take on business news at 6:10 a.m. George W. Bush. of the Detroit Metro Convention & Alexander credited Oakland members supported the project by Mondays on the Paul W. Smith show Tickets are $150 apiece. (See the Visitors Bureau. Alexander’s new County Executive L. Brooks Patter- purchasing advertising. on WJR AM 760 and in her blog at MPLP website at www.ippsr board chair, Henry Ford Health son for pulling together a regional Medical Magnet is exactly the www.crainsdetroit.com/kramer. .msu.edu.) System President and COO Bob branding program. The county’s type of resource that attendees of E-mail her at [email protected]. Each year since 1992, 24 people selected from around the state attend a weekend immersion into the political process through programs on policy and leadership. The idea is to create a cadre of public service-oriented people to run for political office or in some other way shape public policy in Michigan. Since 1992, the program has A LOAN WITH graduated more than 500, including more than 130 who have been elected to local offices (including school boards), 52 to county offices and 28 elected or appointed to office in state government. The program is housed in Michi- gan State University’s Institute for Public Policy and Social Research. The Livonia dinner is its biggest fundraiser. Robinson and Fleischer have big shoes to fill. Past matchups have included Mary Matalin and James Carville, Jack Kemp and Bill A CITIZENS BANK LOAN LETS YOU FOCUS ON THE FUTURE ... Bradley, and Pat Buchanan and because the businesses Howard Dean. that will succeed tomorrow are the ones that make the right choices today. They are “Aside from the (Mackinac Poli- cy Conference), this is one of the led by individuals who see opportunity for growth and expansion, and take action with largest bipartisan events in the state,” said Anne Mervenne, one of complete conﬁdence. A loan from Citizens Bank will keep you moving forward and the program’s coordinators. never wondering, “What could have been?” Both speakers have ties to Michi- gan. Robinson graduated from the University of Michigan and was the first black co-editor of the student Get the loan you deserve now. To make an appointment with a Citizens Banker, newspaper, The Michigan Daily. 800-946-2264 CITIZENSBANKING.COM/BUSINESS Fleischer served as press aide to call or visit . former U.S. Rep. Jim Dunn during Dunn’s unsuccessful GOP primary run for the U.S. Senate in 1984. Attracting attention to health care Health care is the region’s largest employer — larger than even automotive companies. Yet Southeast Michigan hasn’t been entirely successful in marketing itself either as a destination for health care or a good place for life science- and medical-related companies to roost. One reason: The biggest players in health care are also fierce competi-

LETTERS CONTINUED ■ From Page 8 Finally, the U.S. economy benefits two ways: by the expectation of social change in China — that it will move closer to a democratic model; and by the Chinese immigrants who remain in the U.S. after graduation, who, like generations of immigrants before them, will propel the U.S. forward. This reinforces Gov. Rick Snyder’s recent initiatives to attract immigrants to Michigan. Ernest Nolan Provost and vice president for academic administration Madonna University 20120220-NEWS--0010,0011-NAT-CCI-CD_-- 2/17/2012 10:24 AM Page 1

Page 10 CRAIN’S DETROIT BUSINESS February 20, 2012 Extra

growing small businesses

EDITOR’S NOTEBOOK

Gary Anglebrandt is Web editor of Crain’s Detroit Business and Buy or be bought Detroit Make it Here. He can be reached at (313) 446-1621 or ganglebrandt Appliance parts business uses regional strategy to gain national reach @crain.com BY ELLEN MITCHELL Gary Anglebrandt SPECIAL TO CRAIN’S DETROIT BUSINESS im Adler saw too many companies in Crain’s launches his industry get snapped up for him to K sit idly by and watch his business become one of them. contracting guide The company, Center Line-based 1st Source Servall Inc., distributes replacement Readers of Crain’s Second Stage appliance parts from companies such as business coverage should take note Whirlpool Corp., General Electric Co., Electrolux of a few changes coming next month. Home Products North America and Frigidaire Co. Beginning March 7, a new “Contract “Twenty years ago, there Opportunities” feature in the Crain’s were 15-20 appliance manu- Michigan Business weekly e- LAWSUIT facturers. Now there are newsletter will highlight business development opportunities with the Espionage three — they all consolidat- state of Michigan, showcasing claim: ed,” said Adler, 1st Source existing contracts that soon will open Competitor Servall’s president. “We real- files suit in for new rounds of bidding, and ized that if we didn’t get larg- New York, er, we would become part of contracts currently open for bids. Page 11 The feature replaces the Crain’s one of the companies that Second Stage Report e-newsletter, were getting larger.” which will run for the final time Feb. Rather than be the sitting duck waiting 23. to get bought out, 1st Source Servall need- The Second Stage newsletter ed to take action. But where to begin? provided owners of small and midsize The strategic picture began to present it- businesses with information on useful self in 2006, when the company, then local resources and expert advice on named Servall Inc., learned that the owner growing a business. The new Contract of Houston-based 1st Source Parts Center Opportunities feature will point the was retiring. way to specific business development A Texas buy would fit nicely into Ser- opportunities. vall’s big-picture goals for two reasons: Contracting opportunities also will That state’s stronger economy meant be listed at growth in the immediate area. And, second, crainsdetroit.com/contractopps it would provide a sound regional base beginning in March, in conjunction from which to begin expanding outward. with the launch of this new newsletter “We call it our connect-the-dots theory,” feature. Adler said. “It’s a matter of trying to fill in Crain’s is working with the Michigan the holes between Michigan and Texas. Economic Development Corp. and That economy is growing and expanding, Michigan’s Department of Technology, and it gave us the opportunity to grow the Management & Budget to bring this companies we eventually acquired.” new feature to readers. With 1st Source’s presence in Texas, The administration of Gov. Rick Sny- Colorado and New Mexico, an acquisition der, as part of its Pure Michigan Busi- would immediately broaden the compa- ness Connect initiative, is pushing ny’s reach. state agencies to contract with in-state “Our industry is getting smaller, and at businesses. the time, we knew we wanted to grow our The Contract Opportunities listing business,” said COO and General Manager GLENN TRIEST mainly will contain contracts set to ex- Kevin Sullivan. “We felt the operations in President Kim Adler (right) and COO and General Manager Kevin Sullivan are focused on pire in the upcoming weeks or months, Texas complemented our operations in acquisitions to grow 1st Source Servall Inc. many of them currently held by busi- Michigan and we would be able to service Louisiana, adding eight retail operations. nesses based outside Michigan. national-level accounts instead of regional.” Started in 1929 on Gratiot Avenue in De- Subscribers to the Second Stage Although 1st Source was a larger compa- troit as a small parts distributor, the com- newsletter automatically will be signed ny, Servall was able to fund the acquisi- Our industry is getting pany moved to Center Line in 1996 and ex- up for the Crain’s Michigan Business tion with a combination of bank financing “ smaller, and ... we knew panded into Ohio. The acquisitions, plus newsletter. and its own capital, Sullivan said. The eastward expansions of the original busi- Readers can control their combined company changed its name to we wanted to grow our ness, grew the distributor from 13 loca- newsletter options by updating their 1st Source Servall. tions in two states to 51 locations in 13 account settings at crainsdetroit.com. That response to industry consolidation business. states, including 12 distribution centers. Crain’s will continue to cover pressure has since turned 1st Source Servall ” The employee count has gone from 75 be- second-stage businesses and issues into the nation’s second-largest distributor Kevin Sullivan, 1st Source Servall Inc. fore the first Texas acquisition to more pertaining to them, including in this of appliance parts behind St. Louis-based than 515 now. The company projects rev- special section, which runs the third Marcone APW LLC and pushed revenue from every year since 2006, including Corpus enue of $150 million this year. Monday of each month. $20 million in 2005 to $125 million last year. Christi, Texas-based Standard Appliance The acquisitions laid the groundwork I encourage readers to continue The move made it easier to enter the Parts Co., and Lubbock, Texas-based Nunn for relieving another competitive pressure contacting me for possible stories on Southeast market in 2010, when 1st Source Appliance Parts Co., both in 2007, and Tulsa, point: expectations of national reach. companies and topics pertaining to Servall purchased Birmingham, Ala.-based Okla.-based Greer Appliance Parts Inc., with “Our industry demands one-day (deliv- second-stage businesses. Alabama Parts Co. and Appliance Parts Co. of locations in Missouri and Kansas, in 2009. ery),” Sullivan said. “If your appliance I can be reached at (313) 446- Mississippi. It also established a Southeast The company’s most recent acquisition breaks, you want it fixed yesterday.” 1621 and [email protected]. distribution center in Birmingham. came last September, when it bought The company has made an acquisition Alexandria, La.-based Appliance Parts Co. of See Buy, Page 11 20120220-NEWS--0010,0011-NAT-CCI-CD_-- 2/17/2012 11:03 AM Page 2

February 20, 2012 CRAIN’S DETROIT BUSINESS Page 11 Second Stage Extra Buy: Parts biz’s strategy ■ From Page 10 Sullivan said 1st Source Servall Working Capital seeks more acquisition targets, Buffalo competitor IN ACTION and that growth beyond the Rocky Mountains and along the East Coast would give the company the accuses Servall of national reach it needs. “We’ve laid out our map and identified places we are unable to deliver corporate espionage to in one day,” he said. “We want to Appliance parts distributor become a true national player.” 1st Source Servall is fighting a Livonia-based Bill & Rod’s Appli- lawsuit brought by competitor ance Inc. has been doing business Marcone APW LLC. with 1st Source for 36 of the 49 According to the lawsuit, Creve years it’s been open, said owner Coeur, Mo.-based parts distribu- Kim Legato. As in any relation- tor Marcone Supply Co. bought Buf- ship, it’s had its ups and downs, falo, N.Y.-based AP Wagner in 2010 but Legato said he always comes to establish itself in the North- back to 1st Source Servall. east. 1st Source Servall opened a Although parts availability and Buffalo sales office shortly after. prices forced him to turn to other A few months later, Marcone suppliers in the past, recent acqui- Supply, now Marcone APW LLC, sitions and the increased number of noticed that many of Wagner’s warehouses at 1st Source Servall best customers were no longer brought him back to the parts giant. placing orders. Marcone sued 1st “The business is always chang- Source in July 2010, accusing two ing,” he said. “With all the new ap- former employees and 1st Source We partner with business owners across Michigan to help their second pliances today, it’s good to have a Servall of corporate espionage. stage companies succeed beyond expectations. Our working capital huge selection of warehouses to Marcone alleges in the suit options increase cash ﬂow and our network capital connects search for parts because of the that Karl Rosenhahn and Mark needs.” Creighton, two former Wagner entrepreneurs with the people and resources they need to expand. Targeting certain regions in a executives and co-defendants in fragmented marketplace allows Marcone’s suit, stole a list of companies to get into areas and names, addresses, data on past Let us put our growth capital and financial make distribution and meaningful orders, pricing and credit histo- wisdom to work for your business! contact with clients easier and ry of Wagner’s clients after they faster, said Richard Ackley, man- were hired by 1st Source. aging director of Chicago-based Marcone’s suit, filed in New 248.658.1100 HennesseyCap.com strategy consulting firm Change York Supreme Court’s 8th Judicial Resources Inc., which has experi- District in Erie County, doesn’t ence in regional growth strategies. specify a damage amount, and “To increase your brand name, no trial date has been set. it’s easier to buy another company Supreme Court Justice John in the region you’re looking at Michalek issued an order last than to start things from scratch,” February that prohibits 1st he said. “It allows you to quickly Source from soliciting business create an identity.” from Marcone’s customers. (The Ackley said due diligence also is New York Supreme Court is pri- key, and he suggests targeting marily a trial court, roughly clients in regions where there is equivalent to the district courts, little competition, noting that most superior courts or circuit courts of the regions 1st Source Servall of other states. The highest court targeted were not large metropoli- in New York state is called the tan areas. Court of Appeals.) But Ackley cautions business An appellate court in March owners not to jump before they as- 2011 unanimously backed sess the marketplace. Michalek’s ruling, but with a “Many times, growth is not al- modification that allows Servall ways the appropriate strategy,” he to accept unsolicited orders from (for the car . . . show) said. “The ability to move ahead is Marcone’s customers. based upon how deep your pockets Servall issued a statement are and your industry position.” calling the appellate ruling “a Sullivan said there’s always the significant victory” and said it possibility competitors will feel wants to serve “customers im- threatened and try to prevent 1st pacted by Marcone’s recent poor Source from gaining new footholds. service and price gouging.” “The competitors there may “We’ve gone from being a very take certain actions to prevent you small competitor to being a large from gaining any kind of competi- competitor, and these things tive edge,” he said. “They will use happen,” 1st Source COO and deeper discounts in their pricing, General Manager Kevin Sulli- try to open new locations or van said to Crain’s. “We do look change their hours. We don’t have forward to our day in court.” any operation in Indiana or Illi- Several calls to Marcone were nois, and it’s very possible our not returned. competitors could beat us there.” — Ellen Mitchell Sullivan said building the right team and making the business name known to potential cus- usually finds acquisitions through tomers has helped the company networking and when people ap- overcome competitor obstacles. proach his company. The company Knowing the culture of the new also makes sure to let it be known This ain’t your father’s car show. market and having the right in- that it plans to continue growing ventory also is crucial. in certain locales. “There’s an inherent cultural dif- Sullivan said he has turned Watch Autoweek’s Vinsetta Garage ference that you need to try to adapt down acquisitions when he didn’t to, to adapt to the customer base,” think the talent was there. on Tuesday nights at 8:30/7:30c on Velocity. he said. “The product mix in an area “That’s really what we look for in can be somewhat different based on an acquisition: good quality people, Velocity is the ﬁrst and only television network for upscale men. the climate or other factors.” to (the point) where our customers vinsetta.com Available only in stunning HD. Contact your local cable or satellite provider for more information. Adler said 1st Source Servall want to do business with us.” 20120220-NEWS--0012-NAT-CCI-CD_-- 2/17/2012 11:04 AM Page 1

Page 12 CRAIN’S DETROIT BUSINESS February 20, 2012 Second Stage Extra StageTwo Strategies A look at problem-solving by second-stage companies. Machinery and Equipment Problem to be There was no as- Egrin said the look and feel of solved: When signed space for tools the company now is bringing in- Exchange Inc. (dba Broaching Egrin took over What we did in 2007 and or machines. creased orders. When clients see leadership of the “ Solution: To solve the organization and cleanliness of Machine Specialties Co.) company in 2004, 2008 has allowed us to be here the disorganization, the floor, they want to do business. he knew he want- Egrin used available The change came just in time. Location: Novi ed to make some today. cash to undergo a With the downturn in the automo- Description: Designer, manufac- serious changes. ” lean manufacturing tive industry in 2008, the compa- turer and servicer of new and re- He said the Matt Egrin, Broaching Machine Specialties transformation, set- ny’s revenue began to fall. In 2007, built broaching machine systems company was ting up orderly, mod- revenue was $5.7 million. By 2009, President: Matt Egrin steeped in disor- For example, workers who ern procedures de- it was $3 million. Founded: 1946 ganization, costing time and mon- couldn’t find a repair part might signed to remove waste in the If the company had been as inef- Employees: 25 ey. Orders were not going out on order it — only to realize later that manufacturing process while ficient as it had been in 2004, rev- Revenue: $4.4 million for 2010; time because of the lack of orderly it had just been in a different place adding control to inventory sys- enue could have been much lower, projected $6 million for 2011 procedures. than where they were looking. tems. possibly to the point of sinking the company. Egrin and the people at BMS were able to fall back on the new system to make it through the downturn. “We were able to come out of it, and now, because we made those changes, that is all adding to our bottom line,” Egrin said. “What we did in 2007 and 2008 has allowed us to be here today.” Risks and considerations: The transformation to lean manufacturing does not happen overnight, and it isn’t cheap. Egrin knew both of these things before undertaking the change. BMS had been working with the same process since 1965, Egrin said, and many employees had WHY YES, the grass been around for decades. He knew getting them to do things different- ly for the “boss’ son” was not going to be easy. He is the third genera- GREENER tion to run the family business. is over here. Cost was another risk. Moving machines into storage, reconfigur- ing the work floor, painting walls and other steps in the transformation all required money. Egrin was concerned about getting a return on his investment. “I always tell people it was the best $125,000 I ever spent,” Egrin said. Expert opinion: Dave Brudon is the director of business development at Automotive Industry Action Group in Southfield and has watched companies undergo a lean transformation. A small company like BMS faces advantages and disadvantages when going lean, he said. It’s easier for them to get all of their man- Sometimes brilliant accounting agement on board, but they face and advising isn’t enough. Allow us to time and money constraints. give you an extra nudge over the fence. He said companies must exam- ine their problems and waste and Exceptional client service is what separates Baker Tilly from decide what they want to change the rest. Our customized Client Service Plan outlines your needs and before undergoing a lean transformation, but they always benefit ensures you receive the individual attention you deserve. It’s our pledge to you, from the change. because in the end, your deﬁnition of satisfaction is the only deﬁnition that matters. “You want to say, ‘Here’s the current state. If we had no barri- Come see what’s happening on our side. ers ... what would it ideally look like?’ ” Brudon said. “It’s not that bakertilly.com you ever get to the ideal, but when Connect with us: you go to the future state, it should be in the direction of the Alan Whitman, Managing Partner ideal state.” 248 368 8833 | [email protected] — Michelle Muñoz

If your company has overcome a tough challenge, other growing businesses want to hear about it. Contact Web Editor Gary Anglebrandt at [email protected] to share your story. For other news on growing small businesses, © 2012 Baker Tilly Virchow Krause, LLP. sign up for Crain’s twice-monthly Baker Tilly refers to Baker Tilly Virchow Krause, LLP, an independently owned and managed member of Baker Tilly International. Second Stage newsletter at crainsdetroit.com/getemail. 20120220-NEWS--0013-NAT-CCI-CD_-- 2/17/2012 10:26 AM Page 1

February 20, 2012 CRAIN’S DETROIT BUSINESS Page 13

A CONVERSATION WITH

Lesley Rosenthal, Lincoln Center for the Performing Arts Inc. Law

Crain’s reporter Sherri Welch spoke with Lesley Rosenthal, vice president, general counsel and secretary of New York’s Lincoln Center for the Performing Arts Inc. Rosenthal was in Detroit with her husband, jazz pianist Ted Rosenthal, who performed with the Detroit Symphony Orchestra, and Big cases was promoting her new book “Good Counsel: Meeting the Legal Needs of Nonprofits.” Rosenthal joined the center after 13 years in private practice, giving her an informed perspective on the legal needs of the two sectors. Top verdicts,

Who is the book written for? It’s written for three primary audiences: students and professors in law, social settlements entrepreneurship and arts management programs; nonprofit executives and board members; and of 2011 lawyers who want to serve nonprofits on a fee basis or pro bono.

Do the legal needs of a nonprofit differ from those of for-profits? Many of the areas actually do overlap. ach year, we comb our archives and accept Reports on additional cases can be found at Governance has many similar features submissions from law firms and other www.crainsdetroit.com/verdicts. on the nonprofit and for-profit sides, JEFF JOHNSTON/CDB E sources to compile this review of the big The cases range from automotive supply chain along the lines of checks and cases of the year. price fixing (story below) to intellecutal property balances ... and certain elements of Legal reporter Chad Halcom searched legal and employee compensation disputes. corporate governance such as whistle- records and talked with myriad sources to com- Case profiles begin on this page and continue blower policy, conflict of interest pile this list of a dozen significant cases from 2011. through Page 18. policy and document management procedures. Nonprofits are subject to the same equal employment opportunity laws … manufacturers three years be- Bloomfield Park: Failed in general terms, as the for-profit Auto supplier CASE PROFILES fore the first model year of a development settles with proposed part’s typical four- to sector. And you better be compliant. Ponzi scheme: Iraqi-American contractors, Page 17 Similarly, with intellectual property, six-year production life. The investors targeted, Page 14 Scrap contract: Demolitions you should make sure that you bidding company executives price fixing Drug overbilling: Lawsuit never happened, Page 17 safeguard your own good name, your names 20 Michigan hospitals allegedly aligned prices on a organization’s trademark and its Gas station buyout: Eminent model-by-model basis, and U.S. v. Furukawa Electric Co. Ltd., and labs, Page 14 domain case resolved, Page 18 copyrighted materials. Dancer classification: Strip sometimes resorted to code Junichi Funo, Tetsuya Ukai, 5-Hour Energy: Rival products words, meetings at home or re- club performers considered showed “intentional” How are they different? They’re Hirotsugu Nagata employees, not contractors, infringement, Page 18 mote locations to help keep the Page 15 conspiracy secret, according to different by degree rather than by Venue: U.S. District Court, kind. The rules about your use of Detroit; Judge George Steeh Store explosion: Consumers court records. Energy didn’t pinpoint gas leak, WEB EXTRA At least 19 public companies other people’s copyrighted works are Case filed: Sept. 29, 2011 a little bit looser, (for example) … for Page 15 More profiles: Ambulance have indicated in public disclo- Judgment: $200 million nonprofits. So if I wanted to quote Mortgage fraud: Government assault, lending discrimination sures that they cooperated something from a copyrighted work for Date: Nov. 14, 2011 says falsified applications cost and six other cases, with searches, subpoenas or an educational nonprofit purpose, I Plaintiff: U.S. Department of USDA $2 million, Page 16 crainsdetroit.com/verdicts raids on four continents as have a little bit more latitude than I Justice, antitrust division part of the global investigation would if I were quoting that same Lead counsel: Acting Assistant Hamilton LLP, Philadelphia; Peter The Furukawa judgment since early 2010. At least five material for a commercial purpose. Attorney General Sharis Pozen, Morris, partner, Sheppard Mullin comes out to nearly one-fourth have entered guilty pleas or ac- and John Terzaken, director of Richter & Hampton LLP, Los of the estimated $839 million in cepted fines in the U.S., Japan criminal enforcement Angeles. What are some areas in which total Furukawa sales to U.S. or both countries. nonprofits are often surprised to hear Co-counsel: Kathryn Hellings, manufacturers during the peri- Some analysts at local adviso- national crime enforcement they must also be compliant? Just ry and turnaround firms have section About the case od it allegedly colluded with because you have tax-exempt status, other suppliers, according to speculated to Crain’s that the Defendants: Furukawa Electric doesn’t mean you’re exempt from all The $200 million agreement the antitrust division. But the price fixing is a reaction to the Co. Ltd., Tokyo, Japan. Parent taxes. You’re still subject to the in Detroit between Tokyo- company of American Furukawa total also comes close to 8 per- automakers’ pricing pressures, payroll taxes. And when you close a Inc. in Plymouth and Furukawa based Furukawa Electric Co. Ltd. cent of the parent company’s holding suppliers to close exam- nonprofit, you can’t just walk away. Wiring Systems America Inc. in and the U.S. Department of Jus- $2.4 billion global revenue in ination and razor-thin profit There has to be an orderly dissolution Texas. Separate prosecutions tice was the largest judgment fiscal 2010, as did the fines for margins while selecting some … pursuant to (your) state’s laws. and sentences for Hirotsugu in any Michigan court for 2011. Yazaki and Denso. component bids on non-finan- Whatever remaining assets there may Nagata (former CFO of American It also launched the largest Furukawa and at least three cial criteria. be must be put toward another charity Furukawa), Junichi Funo prosecution in history against a of its executives — former Local attorneys have said to- or nonprofit that has a complementary (assistant general manager of single industry, the automotive American Furukawa Inc. CFO Hi- tal fines for collusion could ex- mission. Honda sales at American supply chain, for the Justice De- rotsugu Nagata, former Assis- ceed $5 billion if all of the com- Furukawa until 2009), and Another thing that’s perhaps partment’s antitrust division. tant General Manager Junichi panies that have been tied to surprising and important is that when Furukawa parent company executive Tetsuya Ukai. Two more Japanese suppliers, Funo for Honda sales at Ameri- the investigation so far are the organization has stopped its Tokyo-based Yazaki Corp. and can Furukawa, and parent found guilty. operations but hasn’t been properly Lead counsel: Robert Calo, co- Kariya, Japan-based Denso company General Manager of Ukai, 56, is already serving shut down yet, the directors’ and chair of the white-collar criminal Corp., both went on to make sep- Honda sales Tetsuya Ukai — his 18-month sentence at a fed- officers’ liability insurance may no defense practice, Lane Powell allegedly took part in several eral prison in California. Naga- longer be in effect. The individuals PC, Portland, Ore. arate agreements for a com- ta, 47, and Funo, 41, have both who were behind the organization may Co-counsel: Michael Monico, bined $548 million in payments, meetings with competitors to be flying out there with no insurance partner, Monico, Pavich & covering the same period of al- learn each other’s prices, and entered guilty pleas and are ex- coverage. That’s when the personal Spevack, Chicago; Thomas leged price fixing between Jan- align them. pected to begin their prison sen- liability attaches to them. Gallagher, partner, Pepper uary 2000 and early 2010. Bids usually came in for U.S. tences soon. 20120220-NEWS--0014-NAT-CCI-CD_-- 2/17/2012 10:28 AM Page 1

Page 14 CRAIN’S DETROIT BUSINESS February 20, 2012 Focus: Law

investors, most in Southeast Mantese Honigman owner, Ferrebee & Associates, to collecting damages for the vic- Ponzi scheme Michigan. Defendants: Dearborn Heights- Livonia, for Alabadi tims after one of two alleged mas- Lead counsel: based Fedek Group Inc. and President Co-counsel: Chris Kokkinakos, terminds was apprehended. David Honigman, Ahmed Alabadi, Chicago-based Fatima attorney, Law Offices of Chris Peter Ahmed Alabadi and Abdzahra Fadhila Abass et al. v. Abdzahra partner, Mantese International Inc. and owner Abdzahra Kokkinakos PLLC, Southfield, for Al- Shalushi, both formerly of Michigan, Shalushi, Ahmed Alabadi et al. Honigman Shalushi, Fatima General Manager Aumary, Adam Atallah and Lufti Rossman and Hussein Alsaedi (dismissed), Fedek Alrashoud. are believed to have been living over- Venue: U.S. District Court, Detroit; Williamson PC, General Manager Kathen Al-Aumary seas since at least 2008, when the Judge David Lawson Troy (dismissed), Adam Trade Inc., Hassan market downturn led to customers Case filed: May 6, 2010 Co-counsel: Zwein, Mohsin Alebory, Saad Mishit, About the case calling in their investments in the Judgment: $174 million. Motion to Gerard Mantese, Abdulkhaliq Almahanna, Mohsen Shalushi-owned Fatima International set aside pending. partner, and Aljabiri, Alaa Al-Yaaquibi and Fathel A lawsuit judgment for Ponzi Inc. or in Alabadi’s Fedek Group Inc. Date: Nov. 10, 2011 David Hansma, Mohammed Aljibori. schemes targeting local Iraqi- Alabadi allegedly operated a Plaintiffs: About 200 Iraqi-American associate, Honigman Lead counsel: Ronald Ferrebee, American investors may be closer Ponzi scheme since 1998 and Shalushi since about six years ago, both purporting to invest in infrastructure projects, purchase commodities and other ventures to ben- Environmental and Conflict Minerals Corporate Responsibility Professional Jet Management efit war-torn Iraq. Water Sustainability Training Individual investors paid in any- where from $5,000 to as much as Global Working Global Chemical Social Media and $6 million, for a total of $57.5 mil- Conditions Management Communication lion over time, and were generally promised a return of 80 percent or Strategies more on principal within a year. But the investors later alleged in a 2010 lawsuit that most funds either went to enrich Shalushi and Special presentations: Tuesday & Wednesday, March 6 - 7, 2012 Alabadi or to pay off earlier in- - OEM & Supplier MSU Management Education Center vestors in two ongoing and inter- Panel Discussions 811 W. Square Lake Road | Troy, MI 48098 Experience the difference. related Ponzi schemes. - HR/Policy/Compliance The plaintiffs originally sought Best Practices You’re invited to learn, communicate and share critical All inclusive management at an affordable fi xed cost. class-action status and $1 billion in - Supply Chain corporate social responsibility information at the claims against dozens of people; but Transparency •Forming partnerships now 2012 AIAG U.S. District Judge David Lawson Keynote address by: •Small, midsize and large cabin jets refused to certify a class in late 2010, Corporate Responsibility Summit Mr. Robert L. Corcoran •Reduce your total operating cost and the investors later dismissed President & Chairman “Today,Tomorrow and Beyond” more than 50 defendants considered GE Foundation •Maximize your aircraft effi ciency “agents” in the scheme. Shalushi while enhancing your aircraft and several other defendants either Reserve Your Seat Today appearance, performance & value www.skywayavjets.comwww skywayavjets com never got served with or responded Register by calling 248.358.3003 in court to the lawsuit, and the in- ™ vestors last summer obtained a de- The Catalyst for Peak Performance or online at www.AIAG.org Call today for more information, Geoff Sherman 1.248.568.0979 fault judgment for nearly 200 people. The investors’ attorneys at Troy- based Mantese Honigman Rossman and Williamson PC learned that Al- abadi, who had answered the lawsuit, was living in the Middle East and arranged to meet them for a possible resolution to the case short Contingent Fee of seizing his assets, said partner and lead attorney David Honigman. Alabadi flew from Iraq to Toron- to to take part in those talks, but Business Litigation? Honigman notified the FBI, who in turn contacted Canadian authorities who detained him on arrival. He was arraigned earlier this month at U.S. District Court in Detroit In a word, “Yes.” on two criminal counts of bank When your lawyer is as investedvesteed in fraud and one of money laundering. “The federal authorities have the outcome of your case as you are, been great at trying to help these you know you will be getting your people who were defrauded, because some of them borrowed money’s worth. In Michigan, no firm money to invest with this guy and handles contingent fee business some have gone bankrupt while this has been going on.” litigation better than we do. A motion to withdraw the civil judgment for Alabadi awaits a Don’t pay hourly legal bills. March 7 hearing in Lawson’s court. Choose Sommers Schwartz for all your business litigation needs. Drug overbilling U.S. ex rel James Wagel v. GE Healthcare, Amersham plc et al. Venue: U.S. District Court; Judge John Corbett O’Meara Case filed: Nov. 29, 2006 Settlement: $30 million Powerful Attorneys. Remarkable ReResults.suultts.s. Date: Dec. 29, 2011 Plaintiffs: James Wagel, pharmaceutical representative for GE DW>KzDEdͻ>^^ d/KE^ͻWdEd >/d/'d/KEͻKEdZd/^Whd^ Healthcare competitor Bristol-Myers Squibb; and U.S. government via www.sommerspc.com | | | election to intervene 248-415-2234 1-888-884-3878 2000 Town Center, Suite 900, Southfield, MI 48075 Lead counsel: Monica Navarro,

ADVERTISING MATERIAL special counsel, Frank Haron Weiner PLC, Troy See Next Page 20120220-NEWS--0015-NAT-CCI-CD_-- 2/17/2012 10:28 AM Page 1

February 20, 2012 CRAIN’S DETROIT BUSINESS Page 15 Focus: Law

From Previous Page maximize doses available per vial agreed to offer $11.3 million in cash Defendants: GE Healthcare, a and patient injections, inflating sums and rent credits to a class of biomedical Medicare’s reimbursement. exotic dancers. business unit of Wagel collects $5.1 million of the The settlement, approved in July General Electric settlement as a “relator” — a private by U.S. District Judge Stephen Mur- Co., Connecticut; individual with knowledge of fraud phy in Detroit, offers up to $500 in predecessor against the federal government who cash or $1,000 in rent credits for in- company brings the lawsuit on its behalf. dividual dancers who allege they Amersham plc, The lawsuit also names more were misclassified as independent Do the Little Chalfont, contractors under the federal Fair England, acquired than 20 Michigan hospitals and car- by GE Healthcare diology laboratories that allegedly Labor Standards Act. in 2004; about 20 took part in the Myoview billing in- Said Jason Thompson, the plain- Michigan flations. But these were dismissed tiff attorney from Sommers Navarro hospitals or from the case prior to settlement. Schwartz: “These entertainers Right Thing physicians practices dismissed prior should have been classified as em- to the settlement including Oakwood ployees under FLSA. They don’t Healthcare Inc., Dearborn; Henry Ford have a standalone business, and Health System, Dearborn; Harper- they don’t have the same freedom to Hutzel Hospital, Nuclear Imaging Dancer status set their fees as the employer.” Ethos Week Consultants LLC, Romeo; and Eastside Cardiovascular Medicine PC The women, who pay about 35 percent of tips collected during dances, Lead counsel: Undisclosed (sealed Jane Doe I-IV et al. v. Déjà vu complaint) Consulting Inc., Cin-Lan Inc., sued in 2008 alleging they should March1-1 have been classified as employees. Harry Mohney et al. Attorneys for Déjà vu and Lans- ing-based Cin-Lan Inc. contended in About the case Venue: U.S. District Court, Detroit; court that dancers have the choice cob.emich.edu A business unit of Connecticut- Judge Stephen Murphy to be employees or contractors in based General Electric Co. agreed to Case filed: June 25, 2008 applicant forms, and that contract pay more than $24 million to the Settlement: $11.3 million — part dancers are not employees in part Centers for Medicare & Medicaid Ser- cash sum, part rent credit pool because they can choose their own vices, plus $5.1 million to a Michigan Date: July 13, 2011 hours and whether to grant perfor- representative of competitor Bristol- Plaintiffs: One unidentified mance requests for customers. Myers Squibb, to settle allegations of Michigan dancer, one California The settlement, less attorney fees overbilling for the drug Myoview. dancer and two Minnesota dancers, of about $3.5 million, offers past and James Wagel, a Taylor resident for a class of more than 2,000 present dancers going back to 2005 and pharmaceutical representative dancers since 2005 at 72 nightclubs nationwide owned by Déjà vu, up to a $500 cash sum, depending on selling Bristol-Myers’ radiophar- including more than 150 dancers at the number of hours worked, or up maceutical drug Cardiolite, which clubs in Detroit, Highland Park and to $1,000 in credits against future competed with Myoview, brought a five other Michigan locations. rental fees. federal whistle-blower action in Lead counsel: Jason Thompson, 2006. The federal government joined shareholder, Sommers Schwartz PC, WJR’s Paul W. Smith in the sealed lawsuit later, as did 18 Southfield states that were later dismissed as Co-counsel: Shareholders Andrew EMU’s David Mielke evidence indicated the scheme Kochanowski and Kevin Stoops and turned on federal billing only. two associates at Sommers Store explosion Myoview is a drug used in cardi- Schwartz; and Hart Robinovitch, ology practices to perform nuclear partner, Zimmerman Reed PLLP, Paul Franks v. Consumers Energy Co. stress tests and is mixed with the Minneapolis (Scottsdale, Ariz. office). Estates of Diane Zell and Leslie radioactive element Technetium Defendants: Lansing-based Déjà vu Consulting Inc. and Cin-Lan Inc., Machniak v. Consumers Energy Co. GUARANTEE YOUR to make blood vessels show up in owning affiliated nightclubs imaging scans and help detect nationwide, and company founder blood flow obstructions. Harry Mohney. OPENING DAY SEATS The government and Wagel al- Lead counsel: Allan Rubin, leged that England-based Amer- partner, Jackson Lewis LLP, sham plc and later GE Healthcare, Southfield office, for Déjà vu which acquired it in 2004, actively Consulting and its clubs. encouraged health care providers Co-counsel: Walter Piszczatowski, to dilute Myoview and overbill shareholder at Hertz Schram PC, Medicare for additional doses. Birmingham, for Cin-Lan. But GE Healthcare settled claims under the federal False Claims Act About the case Olsman Sklar for a period of billing Medicare Venue: Wayne County Circuit from 2000 to 2003. During that time, Déjà vu Consulting Inc. and its adult Court; Judge Jeanne Stempien Myoview was allegedly diluted to entertainment clubs nationwide Cases filed: Jan. 18, 2011, and Jan. 28, 2011 Settlement: $10 million (Crain’s estimate) Date: Sept. 26, 2011, and Oct. 24, 2011 Plaintiff: Paul Franks, owner of William Franks Furniture Inc. in Wayne; the estates of James Zell and Leslie FULL SERVICE ASSEMBLY Machniak, a salesman and clerical worker at Franks Furniture, via their TOOLING SYSTEMS surviving spouses, Diane Zell and Robert Machniak Lead counsel: Jules Olsman, president, Olsman, Mueller, Wallace & CONTINGENT WORKFORCE MacKenzie PC, Berkley, for Paul SELECT A SEAT & OPEN HOUSE Franks. Stuart Sklar, shareholder, Fabian, Sklar & King PC, Farmington SATURDAY, FEBRUARY 25 • 10 AM – 2 PM SERVICES Hills, for the Zell and Machniak estates. SEASON TICKET PACKAGES AS LOW AS $324 Defendants: Consumers Energy Co., Jackson • Visit Comerica Park and select your 2012 Season Ticket Lead counsel: Scott Feringa, location shareholder, Sullivan Ward Asher & 29401 Stephenson Highway Patton PC, Southfield, for • Party Suites and MotorCity Casino Hotel Champions Club Madison Heights, MI 48071 Consumers in the estates cases and packages also available at least eight others filed on behalf 248 548 6010 of neighbors and others who claim • Complimentary parking in Tigers garage (entrance on I-75 service drive) www.gonzalez-group.com injury and property damage, or their insurers. David Schlee, president and co-founder, Schlee, Huber, McMullen & Krause PC, Kansas City, Mo., for AEROSPACE | DEFENSE | AUTOMOTIVE (313) 471-BALL (2255) See Next Page 20120220-NEWS--0014,0015,0016,0017,0018-NAT-CCI-CD_-- 2/17/2012 10:45 AM Page 3

Page 16 CRAIN’S DETROIT BUSINESS February 20, 2012 Focus: Law

From Previous Page that the estates’ cases were likely Consumers in the Franks case. worth at least $1.5 million to $2 mil- Co-counsel: Michael Wilson, lion apiece, while Paul Franks’ cooley.edu assistant general counsel and lawsuit could be worth several mil- director of litigation for Consumers, in lion more due to ongoing health both the Franks and estates cases. care costs, a greater potential loss of income for the business owner than for his employees and any re- Cooley About the case quired reimbursements to any in- Around 9 a.m. on Dec. 29, 2010, surer that covered Franks’ benefits Open Houses owner Paul Franks of William before the settlement was reached. Franks Furniture Inc. arrived to open Four other lawsuits remain the store for business in downtown pending as of February against Join us in March, from 4-7 p.m. Wayne and found two store em- Consumers. ployees — James Zell, 64, and DAYANA, COOLEY STUDENT Leslie Machniak, 54 — waiting outside to begin their shifts. Monday, March 5 | GRAND RAPIDS, MI Wednesday, March 7 | ANN ARBOR, MI After unlocking a store entrance Tuesday, March 6 | LANSING, MI Thursday, March 8 | AUBURN HILLS, MI and letting them inside, Franks Mortgage fraud turned to walk back toward his Friday, March 2 | TAMPA BAY,FL New Campus! truck when an explosion leveled the U.S. v. Shore Financial Services, family-owned business of 44 years. dba Shore Mortgage Attend a Cooley Law School Open House in March and talk to Cooley administrators,department Rescue crews recovered the bodies Venue: Settled out of court representatives,students,and faculty members from all five of our campuses,including our newest of Zell and Machniak in the wreck- age hours later, and Franks was tak- Case filed: Investigation filed Jan. campus in Tampa Bay, Florida. en to the University of Michigan Health 28, 2011. Register online for one or all five Open Houses in March at cooley.edu System burn center for treatment. Settlement: $6.2 million or register onsite the day of the open house. You are encouraged to At the time of the explosion, Investigator: U.S. attorney’s office visit more than one campus. Jackson-based Consumers Energy Lead counsel: Craig Weier, U.S. Co. was investigating a gas leak in attorney’s office Learn about Cooley Law School at cooley.edu the area after two separate reports Respondent: Shore Financial

Thomas M. Cooley Law School is committed to a fair and objective admissions policy. Subject to space limitations, Cooley of gas odors from residents on a Services, dba Shore Mortgage, John offers the opportunity for legal education to all qualified applicants. Cooley abides by all federal and state laws against nearby street — one at 6:13 a.m. and Scott Hoose discrimination. In addition, Cooley abides by American Bar Association Standard 211(a), which provides that “a law school Scan here to learn more about nowledge. skills. ethics. shall foster and maintain equality of opportunity in legal education,including employment of faculty and staff,without discrim- Cooley Open Houses and and the next at 7:40 a.m. Lead counsel: Michael Friedman, k ination or segregation on the basis of race, color,religion, national origin, gender,sexual orientation, age or disability.” register online to attend The service worker on the first Birmingham (for the Hoose brothers) ICG.0112.007.AD call made several checks at the home and a nearby vacant house but did not find evidence of a gas About the case leak and left the area at 7 a.m., ac- An investigation of two former cording to an incident investiga- employees of Shore Financial Ser- tion report released by Consumers vices Inc. turned into a wider exam- last December. The second service ination of mortgage fraud between worker found “occasional whiffs of 2001 and 2004 at the Birmingham- natural gas … which could not be” based lending company. traced to an origin point and con- John and Scott Hoose, employ- tacted a supervisor around 8:45 ees of Shore’s Brighton office, a.m. to call for a mobile survey pleaded guilty Dec. 15, 2011, for truck. The explosion occurred be- preparing and submitting falsified fore that vehicle arrived, accord- loan files to the U.S. Department of ing to Consumers. Agriculture’s Rural Development The source of the blast is be- Administration. lieved to be a 2-inch steel gas main The government alleged that that separated at a coupling. false claims were found in loan ap- Consumers faced at least 10 sepa- plications from the Brighton office rate lawsuits in the aftermath of on employment, income and the the blast, including one on behalf number of household members for of the two deceased employees and applicants. These changes let one by Paul Franks, alleging he homebuyers qualify for lucrative, suffered severe burns and traumat- low-interest loans under the gov- ic brain injury. Both of those law- ernment’s Guaranteed Single suits were settled last October and Family Home Loans program. November, on confidential terms. The program is designed to help But other personal injury plain- low-income families buy homes in tiff and defense lawyers estimated See Next Page

Don’t miss the closing keynote speaker Get the details at Dan Gilbert, Founder/Chairman, Quicken Loans Inc. March 7 crainsdetroit.com/idea 20120220-NEWS--0017-NAT-CCI-CD_-- 2/17/2012 10:30 AM Page 1

February 20, 2012 CRAIN’S DETROIT BUSINESS Page 17 Focus: Law

From Previous Page just beginning. rural areas. But because of the falsi- More than 120 companies filed fied paperwork, applicants with almost 200 liens on the property to- higher incomes were allowed very taling more than $48 million for low mortgage rates, the govern- unpaid balances on their contracts or brought lawsuits in Oakland ment alleged. The government con- County Circuit Court in the months tends that the fake information after work stopped. from Shore’s Brighton office cost Many of those sums were redun- the USDA more than $2 million, and dant because some general con- fined the Hooses about $1.6 million. tractors and their subcontractors The government also alleged or suppliers filed liens on the same that these practices stretched be- unpaid claims, and 24 of those yond the Hooses, and began inves- companies had their liens dis- tigating a larger cross-section of missed by agreement or court or- Shore Financial Services’ loans. der. In all, attorneys believe about The company negotiated a set- $25 million was still owed. tlement out of court. While no This created a massive barrier judgment was made and Shore did to foreclosure for Wells Fargo Bank not admit liability, the company NA, which had approved $48 mil- paid a settlement of $6.2 million. lion in acquisition loans for the — Meghana Keshavan project in 2006. Every lawyer must pass the bar. At that time, a joint venture of New York-based Coventry Real Es- tate Advisors and Ohio-based Devel- Ours go on to raise it. opers Diversified Realty Corp. had Bloomfield Park just redeemed the development from foreclosure and acquired a Wayne Law, a Best Value Law School, offers students a Wells Fargo Bank NA v. Coventry II DDR 50 percent stake in it from Craig Harbor Bloomfield Phase I LLC et al., Schubiner, founder of developer strong and comprehensive legal education. Detroit’s vibrant B&V Construction Inc. v. Coventry II Bloomfield Hills-based Harbor Cos. legal market provides students with direct access to internship Developers Diversified owned and employment opportunities at state and federal courts, DDR Harbor Bloomfield Phase I LLC 20 percent of the joint venture with government offices, multinational corporations, unions and et al. (consolidated cases) Coventry and paid back $9.8 mil- AIM HIGHER lion before construction halted; major law firms. It’s no wonder Wayne Law alumni continue but Wells Fargo was still out more than $40 million with interest. to lead the way in the annual Michigan Super Lawyers ranking. In late 2009, a judge appointed Farmington Hills-based Finsilver/ Learn more about earning a J.D. or LL.M. degree from Wayne Friedman Management Corp. as re- Law at law.wayne.edu or contact our Admissions Office at ceiver to handle site security, (313) 577-3937. Wayne State University. Aim Higher. property tax payments and season- al weatherization of the site while the litigation continued. About 95 of the lien-holder compa- Greene Yert nies agreed in late May 2011 to a set- Venue: Oakland County Circuit tlement worth about 13.6 cents for Court; Judge Wendy Potts every dollar owed on the $25 million Case filed: Aug. 21, 2009 total, but a few holdouts lingered. Settlement: About $3.6 million Last of the contractors to settle were brothers Bruce and Dan Israel, Date: July 6, 2011; judgment to foreclose Sept. 7, 2011 owners of Pontiac-based Asphalt Spe- cialists Inc and Lou’s Scrap Transport Plaintiffs: Wells Fargo Bank NA, . San Francisco, for loan balances Inc., which together hold liens worth totaling more than $40 million. B&V more than $500,000, before the settle- Construction Inc., Wixom, a ment was finalized in July. construction subcontractor who sued In September, Judge Wendy As a tier one auto supplier, my business stalled in to foreclose on a nonpayment lien. Potts signed a judgment of judicial 2008. It was First State Bank who recognized Lead counsel: Alan Greene, foreclosure on Bloomfield Park for partner, Dykema Gossett PLLC, Wells Fargo and dismissed the two the problem wasn’t my company – but my industry. Detroit, for Wells Fargo; Jason Yert, lawsuits bundling the contractor partner, Kerr Russell and Weber PLC, claims. Wells Fargo had yet to take By refinancing the equity in my equipment, the new Detroit, for B&V possession of the site as of early Co-counsel: Brian Moore, partner February. loan allowed me to pay down my line of credit at Dykema, for Wells Fargo A separate legal dispute be- and free up my working capital, which enabled Defendants: More than 100 tween Schubiner’s companies and contractors, subcontractors, his former partners at Coventry materials suppliers and service me to steer my business in the right direction. and DDR is still pending. companies involved in the construction of Bloomfield Park, the - Dave unfinished mixed-use development at First State Bank Business Customer Square Lake and Telegraph roads. Lead counsel: Patrick Facca, partner, Facca, Richter & Pregler PC, Scrap fraud Troy, for general contractor Clark Construction Co.; John Clappison, Grand Sky Enterprise Co. Ltd. general counsel for Colasanti Group Inc., Macomb Township, largest lien v. Future Financial Investments LLC, holder. Romel Cassab Co-counsel: More than 30 law Venue: Oakland County Circuit firms involved for the various lien- Court; Judge Leo Bowman At First State Bank, we realize that local businesses drive holder companies, including Farmington Hills-based Ronald B. Filed: July 26, 2010 our economy. That’s why we’re invested today – and every Rich & Associates PLLC and firm Judgment: $3.46 million day – in helping them grow with a diverse portfolio of President Ronald Rich for eight Date: Dec. 7, 2011 products and services. companies, and Ronald Deneweth, Plaintiff: Grand Sky Enterprise Co. partner at Troy-based Deneweth, Ltd., a Brunei-based commodities s3"!OR#ONVENTIONAL%QUIPMENT,OANS Duggan & Parfitt PC and attorney for trader in scrap metals, plastics and s2EAL%STATE,OANS five companies. electrical components s,INESOF#REDIT Lead counsel: J. Laevin Weiner s#ASH-ANAGEMENT3ERVICES About the case and Melinda Balian, attorneys, Frank Haron Weiner PLC, Troy www.thefsb.com/businessloans Construction halted on the #ALL866-372-1275 today to learn more about the Defendant: Future Financial 866-372-1275 planned $350 million, 18-building Investments LLC, Novi, and co-owner tools that help move your business forward. Bloomfield Park mixed-use devel- Romel Casab, Commerce Township Earning your trust today…and every day. opment in November 2008, but the Lead counsel: Barry Steinway, contractor noise in Pontiac was See Next Page 20120220-NEWS--0018-NAT-CCI-CD_-- 2/17/2012 10:31 AM Page 1

Page 18 CRAIN’S DETROIT BUSINESS February 20, 2012 Focus: Law

MEET AARON... From Previous Page 2, 2009, that it was necessary to ex- AT KP - WE’RE A TEAM. WHEN pand the road beyond its current boundaries — which involved buy- WE PARTNER WITH YOU ON A ing several private properties to complete the Rochester Road im- PROJECT - YOU BECOME AN EQUAL provement project. PART OF THE TEAM. WE WORK One of the properties offered a buyout under eminent domain law TOGETHER TO ENSURE A QUALITY was Safeway Acquisition Co., owned PRODUCT IS DELIVERED ON TIME by Dearborn-based oil wholesaler Sam Beydoun. The company Cantor Lorelli AND ON BUDGET. IT ALL STARTS owned a Shell Oil Co. station and Weiner Balian IN OUR SALES & ESTIMATING convenience store at Rochester owner, Law Offices of Barry and Wattles roads. About the case DEPARTMENT. AS OUR CHIEF Steinway, Bingham Farms The city filed a lawsuit in June Farmington Hills-based Innova- 2009 and said it made a good-faith tion Ventures LLC expects an appeal ESTIMATOR, AARON SNYDER About the case offer to Beydoun’s company for of its $1.75 million jury verdict IS THE BEGINNING OF YOUR $949,000. against the California-based com- Brunei-based Grand Sky Enter- When Beydoun rejected the offer, petitor Nitro 2 Go or N2G Distribut- PARTNERSHIP WITH KERKSTRA prise Co. Ltd., which purchases and saying it wasn’t enough compensa- ing Inc. for a series of N2G energy PRECAST. HE WORKS DILIGENTLY trades in scrap metals, entered tion for overtaking the station’s shot products that resemble the into two contracts in April 2008 key location, the city filed a court popular 5-Hour Energy drink. TO COORDINATE PRICING, 3D with Novi-based Future Financial In- order in January 2010 to mandate The company founded by CEO vestments LLC, a Novi business that MODELS AND SUBCONTRACTORS that Beydoun sell his property. Manoj Bhargava (See profile, Page Romel Casab allegedly operates, to The city and Safeway came to a 1) in 1998 brought a lawsuit alleg- TO ENSURE YOUR PROJECT STARTS foreclose on industrial properties. consent agreement in June 2011 ing trademark infringement, The contracts dealt with two OUT RIGHT. JOIN AARON AND THE that increased the compensation copyright infringement and false building sites in Detroit and Ham- amount. Oakland County Circuit advertising or designation of ori- REST OF OUR TEAM ON YOUR NEXT burg, Mich., where Grand Sky Court Judge Denise Langford Mor- gin — one of more than a dozen would put up a majority share of ris further increased the amount. similar intellectual property law- PROJECT! the demolition costs, with the rest — Meghana Keshavan suits in recent years to involve Liv- coming from Future Financial, and ing Essentials at various federal then collect several thousand tons courts. of building scrap from both sites. At issue with N2G were the bot- Grand Sky allegedly paid $1.4 mil- tle designs in several N2G prod- lion combined toward both demoli- 5-Hour Energy ucts that the company claimed re- tions, which never occurred, and sembled its 5-Hour Energy drink later discovered Casab’s company Innovation Ventures LLC launched in 2004, or the variant 5- didn’t own the properties. v. N2G Distributing Inc., Alpha Hour Energy Extra Strength shot Grand Sky sued in 2010 for breach launched in 2008. 800.434.5830 - WWW.KERKSTRA.COM of contract and fraud. Future Finan- Performance Labs Living Essentials obtained a cial and Casab sought to dismiss the Venue: U.S. District Court, Detroit; preliminary injunction against case, claiming in part that Grand Judge Paul Borman N2G in April 2008, shortly after fil- Sky as a Brunei company was not Case filed: March 7, 2008 ing the lawsuit. N2G later modi- registered in the U.S. and had no le- Verdict: $1.75 million fied its packaging designs, but Liv- gal standing to sue. Future Finan- Date: Nov. 18, 2011 ing Essentials contends the use of cial also alleged Grand Sky a similar mountain sunrise bottle breached the two contracts. Plaintiff: Innovation Ventures LLC, Farmington Hills, dba Living design and color scheme could still Judge Bowman denied the re- Essentials, makers of the popular confuse or mislead customers into quest to dismiss, claiming the U.S. 5-Hour Energy shot drink. believing they are Living Essen- Schechterize it registration was not essential be- Lead counsel: Mark Cantor, tials products. fore the time the lawsuit was filed. president, Brooks Kushman PC, A jury found last November that After an evidentiary hearing the Southfield, and Marc Lorelli, Brooks six N2G products, including its 6 judge in November granted Grand Kushman shareholder Hour Energy shot drink, Pure En- Sky’s motion for summary disposi- Defendants: N2G Distributing Inc. ergy Fast Acting drink, Nitro 2 Go tion, awarding Grand Sky of Highland, Calif., makers of the Instant Energy and Firepower Ex- $3.46 million in damages including drinks 6 Hour Energy, Nitro 2 Go treme for seven hours of energy, interest and return on the invest- Instant Energy 7 Hour Energy, 14 showed “intentional” infringement capital, plus attorney fees. Hour Energy Mega Shot and Pure Energy, and Alpha Performance Labs, ment by N2G and awarded a Nevada corporation owned by N2G $1.75 million in damages. President and CEO Jeffrey Diehl. The court is reviewing post-trial Lead counsel: James Thome, motions, but an appeal is not yet Gas station buyout shareholder, Vandeveer Garzia PC, Troy filed. City of Troy v. Safeway Acquisition Co. Venue: Oakland County Circuit Court Case filed: June 29, 2009 Settlement: $2.36 million, June 8, 2011 {before} {after} Plaintiff/ counter- defendant: City of Our experts are the difference. Troy Lead counsel: We have big thinkers that understand the complicated issues that Lori Grigg Bluhm, wealthy families and business owners face. Our team of CPAs, JDs, Allan Motzny Counter- MBAs, CLUs, design life insurance strategies that have been coined plaintiff: Safeway Need growth capital? When businesses “Schechterized” – a robust analysis and application of financial Acquisition Co., Business on face the up-and-down demands of tools that solve complex wealth transfer situations and can simply dba Safeway Oil Bluhm Co., Abbey the rise? growth, purchasing goods, or even to make save money with existing life insurance policies. Enterprises, Alsaham Inc. payroll, Crestmark’s service and 75 years of sophisticated planning with 100s of wealthy families Lead counsel: Alan Ackerman, innovative solutions can be the answer. Ackerman Ackerman & Dynkowski PC has made us a national leader in the life insurance arena. Providing accounts receivable financing and asset-based lending to small- and mid-sized About the case businesses nationwide for over 15 years. One of the lifelines of Troy’s Call me today for more information. commercial strip, Rochester Road, underwent construction in 2009 and 2010 to improve congestion. Anntreal Hemmingway-Smith Following an early analysis of BIRMINGHAM, MICHIGAN 248.731.9500 248.267.1629 | [email protected] the project’s scope, the city of Troy WWW.SCHECHTERWEALTH.COM contended in a resolution on Feb. OVER $200,000,000 PROVIDED TO NEW CLIENTS IN 2011 20120220-NEWS--0019-NAT-CCI-CD_-- 2/17/2012 10:37 AM Page 1

February 20, 2012 CRAIN’S DETROIT BUSINESS Page 19

BUSINESS DIARY CALENDAR

ACQUISITIONS lected by General Motors Co., Detroit, to supply special equipment to grind X-Ray Industries, Troy, a provider of ESD GOLD AWARD BANQUET the faces of pinions and sun gears for nondestructive testing services, ac- the global front wheel drive electric The Engineering Society of Detroit quired Arcadia Aerospace Industries drive unit transmission. The ma- hosts its 41st annual Gold Award LLC, Punta Gorda, Fla., a composite chines will be delivered to GM’s War- banquet Thursday at the Dearborn structures inspection company. ren transmission plant. The award is Inn. for two double disc grinders and two Receiving the Gold Award will be ONE HU CONTRACTS G ND special face grinders. Lewis Walker, IN R T E A D Bankable Marketing Strategies, De- president of R Y B E

E A

L troit, will provide marketing commu- R

EXPANSIONS Lawrence E S nications and PR services for the new C 100 Ningbo Swell Industry Co. Ltd., Technological restaurant in downtown Hudson Cafe Kuangyan Town, Cixi, Zhejiang, Chi- University. He Detroit. na, opened a North American sales will be joined Preferred Data Systems LLC, Farm- and marketing office at 1895 Crooks by 30 others, ington Hills, announced a distribu- Road, Suite A, Troy. Telephone: (248) who will be tion agreement with Vidtel, Sunny- 643-2191. recognized for vale, Calif., to deliver their enterprise-grade video conferencing MOVES contributions services to small and midsize enter- and Walker prises as part of the Vidtel channel Advocate Commercial Real Estate Ad- commitments partner program. visors of Michigan LLC moved from to the field. 28411 Northwestern Highway to 2000 A reception including a silent Performance Assembly Solutions, Town Center, Suite 1790, Southfield. Livonia, was chosen by JetHeat Inc., auction and entertainment begins Telephone: (248) 262-7984. Website: at 6 p.m., dinner is at 7 p.m. and Livonia, to be its exclusive manufac- www.advocateadvisors.com. turer of the Jet Turbine powered heat- the awards ceremony begins at 8 p.m. ing system. NEW SERVICES Molecular Imaging Inc., Ann Arbor, Tickets are $70; a table of 10 entered into a licensing agreement The Samuel Zell and Robert H. Lurie costs $600. Tickets for the with Dana-Farber Cancer Institute, Institute for Entrepreneurial Studies optional Order of the Engineer Boston, Mass., to access a substantial at the University of Michigan’s Ross ceremony are $20. School of Business, and Michigan number of luciferase-enabled cancer For more information, visit State University’s Institute of Entre- cell lines developed at Dana-Farber. www.esd.org or contact Della preneurship and Innovation in the Eli This expands Molecular Imaging’s Cassia at (248) 353-0735, ext. Broad College of Business created the ability to apply bioluminescent imag- 112, or Lori Birman at Michigan Entrepreneurship Educa- ing technology to cancer disease mod- [email protected]. els, including expanded capability in tion Leaders Forum. Website: various leukemias, multiple myelo- www.zli.bus.umich.edu. 00 ma, triple-negative breast cancer, CRAIN’S NEWSMAKERS TO BE SAVE $100 OFF glioma and melanoma. STARTUPS Epic Translations, Farmington Hills, Local Stew LLC, an online and mobile HONORED THURSDAY IN DETROIT has been selected by Boston Public resource that tells you what’s going Crain’s Detroit Business honors the School system, Boston, Mass., to pro- on in your area, at 5722 W. Maple 2011 Newsmakers of the Year 11:30 vide translation and interpretation Road, West Bloomfield Township. materials for more than 134 schools. a.m.-2 p.m. Thursday at the Westin Telephone: (248) 633-3684. Website: Book Cadillac in Detroit. C&B Machinery, Livonia, has been se- www.localstew.com. Honorees include Saad Chehab, CEO of Chrysler/Lancia brands, Chrysler Group LLC; and Sue Mosey, president, Midtown Detroit Inc. Tickets are $60 for current Crain’s subscribers; $55 in groups of 10 or more; $70 for Detroit Economic Club, Mosey Inforum or Adcraft members; and $85 for nonsubscribers. A special $84.50 ticket that includes a one-year subscription to Crain’s is available. For more information, contact: Kacey Anderson, (313) 446-0300; email [email protected]; or visit What IF your law firm www.crainsdetroit.com/events. One-stop Resource provided Insight for the ASE HOSTS HR CONFERENCE challenges at hand and to Protect Your Business. The American Society of Employers Foresight for the issues invites HR professionals to its on the horizon? ninth annual People Profit Don’t let lack of knowledge hold your organization back. Progress conference March 14, beginning with breakfast at 7:15 Use your Michigan Chamber of Commerce membership to a.m. at the Suburban Collection Showplace in Novi. gain access to the Chamber Compliance Center and assure Keynote speakers include Mary that you have the most current and accurate compliance Corrado, president and CEO of the ASE; and retired U.S. Army Lt. Gen. information and resources available. Russel Honoré Workshops will include sessions Join the Michigan Chamber of Commerce for full access. on employee training, I-9 audits, social media trends and disability Call (517) 371-2100 or visit http://ccc.michamber.com accommodation. Carl J. Grassi Stephen M. Gross Tickets are $225 for ASE members and $255 for President Detroit Managing Member nonmembers before March 1; McDonald Hopkins PLC admission is $30 more thereafter. The registration deadline is 39533 Woodward Ave., Suite 318 March 7. Bloomfield Hills, MI 48304 • 248.646.5070 Sponsors include Clark Hill and Leading Businesses. Moving Michigan Forward. Priority Health. For more information, call ASE at www.mcdonaldhopkins.com Local: (517) 371-2100, Toll Free (800) 748-0266 (248) 353-4500 or visit www.michamber.com Chicago • Cleveland • Columbus • Detroit • Miami • West Palm Beach www.aseonline.org. 20120220-NEWS--0020-NAT-CCI-CD_-- 2/17/2012 10:38 AM Page 1

Page 20 CRAIN’S DETROIT BUSINESS February 20, 2012 Job Front PEOPLE FINANCE Anthony Belloli to manager, Plante IN THE SPOTLIGHT Moran Trust, Southfield, from trust of- The Detroit Medical Center has ficer. Also, Chris Harper to relation- named Jeffrey Dawkins COO at ship manager, from senior financial planner, Plante Moran Financial Ad- DMC Sinai- visors, Southfield. Grace Hospital. Dawkins, 58, HEALTH CARE had been COO at DMC Detroit Susan Ferraro to Receiving director of public Hospital. relations, Ameri- can House Senior He succeeds Living Communi- Gregory ties, Bloomfield Berger, who is Hills, from public now the chief relations execu- Dawkins medical officer tive, Martopia for DMC’s accountable care Public Relations organization Pioneer ACO. Group, Ann Ar- Dawkins earned a bachelor’s bor. Ferraro degree in psychology from Eureka College in Eureka, Ill., and a INFORMATION TECHNOLOGY master’s degree in health care Kathleen Tate to director of business administration from Washington development, Tendras Business Advi- University in St. Louis, Mo. sors, Southfield, from partner account ner, Bloomfield Hills, from attorney. manager, Microsoft, Southfield. LAW MANUFACTURING Adam Jahnke, Adam Keith, Matthew Jon Riley to vice president, digital Keuten, Evan Leibhan and Shawn manufacturing, National Center for Strand to partners, Honigman Miller Manufacturing Sciences, Ann Arbor, Schwartz and Cohn LLP, Detroit, from from executive director of design and attorneys. Also, Brett Krueger to part- engineering programs.

Invest in a bank invested in Michigan.

Any bank can sell you products. We’d rather offer you solutions. Whether your business is just starting out or already established, count on us for financing and cash management options in step with your needs.

Lines of Credit r Term Loans r Merchant ServicesrPayroll Services Business Checking/SavingsrOnline BankingrRemote Deposit Payment and Cash Services

Partner with Flagstar Call, click, scan, or visit: (888) 324-4100 flagstar.com/business

Member FDIC 20120220-NEWS--0021-NAT-CCI-CD_-- 2/17/2012 4:51 PM Page 1

February 20, 2012 CRAIN’S DETROIT BUSINESS Page 21

Agents: Federal rules reduce insurers’ fees HEAR BIG IDEAS AT IDEA: DETROIT CONFERENCE Crain’s Detroit Business and Advertising Age ■ From Page 3 present the second Idea: Detroit Conference 8 a.m.- 5 p.m. March individual and small group market of un- represent groups with prescription cov- 7 at the Fox der 100 employees. erage will be paid $10 per employee per Theatre. The In 2011, insurers that spent more on It is harder month from $19.80, and groups without event brings administrative costs than allowed, in- “ prescription coverage will be paid $7.25, out provocative thinking and workable business cluding Priority, Humana, United to serve this down from $14.50. ideas on reinventing the city. Healthcare and John Alden Life Insurance Mike Nixon, president of AGIS LLC, a Keynote speakers are Mike Jbara, president and Co., will be required to pay $89 million in market Troy-based insurance broker with 70 CEO of New York-based music label WEA Corp.; Rob rebates to their policyholders starting in agents in three states, Weisberg, chief marketing officer of Cambridge, August, HHS said last month. because of the said his company has- Mass.-based Zipcar Inc.; and Erik Qualman, author of Socialnomics. Mike Krause, president of Farmington n’t yet been affected by Hills-based Krause Benefits, said he has fee cuts. the medical-loss ratio Other speakers include: The Rev. Barry Randolph of the Church of the Messiah, Corktown investors personally absorbed 15 percent rate cuts ” regulations, primarily Mike Krause, Krause Benefits Angel Gambino and Scott Griffin, and Kiva Detroit by Blue Cross and other insurers. His because he serves larg- founder Rishi Jaitly. two employees have not received a raise er groups up to 1,000 Business leaders, entrepreneurs, advertising in three years, he said. agents who sell Blue Care Network HMO employees, but he said professionals and social entrepreneurs are “I work the under-25-employee market, policies to employer groups of 50 employ- he knows many agents encouraged to attend. Registration information can and my clients call and need help with ees or under. who have lost commis- be found at www.crainsdetroit.com/events. The cost claims and benefit questions,” Krause “We don’t have any plans to reduce sion revenue. is $85 to $125, depending on affiliations and said. “I operate a small business, and it is commissions in 2012, but we need to “Blue Cross identi- Nixon whether attendees are Crain’s subscribers. getting harder to serve this market be- monitor the situation,” Dallafior said. fied pockets of business that were not as cause of the fee cuts.” If the bill in Congress is approved, Greg cost-effective as others and chose to re- Embry, who also is senior account di- Liposky, CEO of Troy-based Creative Bene- duce commissions on the smaller groups WHO ARE THE TOP CFOS? rector at Comerica Insurance Services Inc. fit Solutions LLC, said health insurers that didn’t have as big a block of busi- CFOs are often the unsung heroes of in Detroit, said the majority of the cuts should slow the pace of commission and ness,” Nixon said. organizations’ senior management teams. These to agents have come from Blue Cross and fee cuts. More cuts are expected in 2014, Nixon said it is possible that other car- leaders grapple with budget Priority Health. Health Alliance Plan is when the state health insurance exchange riers this year will use the medical-loss pressure and increased red tape and contribute to strategic one of a few carriers goes into effect, he said. ratio regulations as an excuse to cut com- planning in major ways. that have not yet re- “Some agents are folding up their shops missions. Crain’s Detroit Business is duced commissions, because of the fee cuts of 20 percent to “The entire health insurance industry seeking nominations for its he said. 60 percent that hits hardest in the smaller will continue to evolve regardless what annual CFO awards to give But Ken Dallafior, group range of under 25,” Liposky said. happens with (health care reform),” recognition to these financial Blue Cross senior vice Last year, two health insurers, Priori- Nixon said. “There will be fewer agents leaders. Winners and finalists president of group ty and United Healthcare, moved from a and more consolidation” where indepen- will be recognized in the May 28 edition and at a business and corporate 3 percent to 5 percent commission based dent agents will join larger companies. June event. marketing, said the on aggregate premiums to a per capita Krause said he also expects agents To nominate someone, visit Blues did not cut com- fee based reimbursement arrangement, who serve smaller groups also will look www.crainsdetroit.com/nominate. Nominations must mission rates in 2011. agents said. at health benefits as a part-time pursuit be received by Feb. 27. Dallafior However, in October “Groups with 10 and under lives, those and diversify into financial planning and To be eligible, nominees must be CFOs or hold an 2010, Blue Cross instituted a four-tiered commissions have been cut 70 percent- life insurance lines. equivalent job. Judges will select winners based on commission structure — called Blue plus,” Liposky said. “Guys like me will still be around, but excellence in financial or other corporate operational Alignment — that rewards agents with In a 2010 letter to agents, Priority Health we will have to look for other ways to management. Nominees will be considered for public companies, private companies and nonprofits. higher commissions based on volume of announced it would lower fees to reduce make income,” he said. Blue Cross business in the 100 employee costs and prepare for health care reform. Jay Greene: (313) 446-0325, Questions? Contact Bill Shea, enterprise editor, at and under market. It also cuts rates for For example, Priority said agents who [email protected]. Twitter: @jaybgreene (313) 446-1626 or [email protected] REAL ESTATE JOB FRONT

COMMERCIAL PROPERTIES INDUSTRIAL PROPERTY NON-PROFIT POSITIONS AVAILABLE

For Sale AVAILABLE NOW Accounts Receivable Specialist RDM Associates, Clarkston, MI Garden City - Zoned Commercial D.D.A. area. Taylor/Romulus Area — 4,000 to 80,000 sq. ft. Accounting services firm 14,000 sq. ft. bldg. on 2 ac. Many uses, built as Ideal for logistics company, 5 -7 years a/r & general accounting experience Medical $595,000. manufacturing or warehousing. BA/BS degree in accounting OPEN POSITIONS ARE Plymouth - Old Train Station, bldg. completely Yvon Rea 734-946-8730 Non-profit experience, $40,000/yr + benefits redone, good for offices, restaurant, large lot, one Send resume to: [email protected] whole block. $299,000.

Call for additional information Van Esley Real REAL ESTATE 14200 ft2 – industrial 15 ton crane building Estate @ 734-459-7570 (North Madison Heights) CAREER OPPORTUNITY 14,200 square foot building with 15 ton overhead FREE TO POST OFFICE SPACE crane. 2000 amps of 480 service with step Creative Loft Office Space down transformers. Buss duct and air lines and Detroit - For Sale throughout the shop area. Tube type infra red Leasing Manager heat. 12,000 feet of shop and 2200 feet of office. Director of Property Management Approximately 4,733 square feet 12 ft. x 14 ft. grade door and truck well. Available Wired for voice and data immediately. Private owner. Brokers protected. Secure Parking with Remote Access !" Call Exclusive Realty 248-588-7796 313.963.7653 www.friedmanrealestate.com VACANT LAND 60 Proposed Building Lots MARKET |JOB FRONT Possible Senior Citizens Complex crainsdetroit.com/jobfront Westland PLACE EXPERIENCED BROKER NEEDED Transwestern is a national, privately-held Asking $49,000 operating company specializing in commercial real ANNOUNCEMENTS & estate services, investment and development. The Call broker: Tony 586-530-1094 SERVICES Detroit office is seeking an experienced broker with a proven track record of success and Call Us For Personalized excellence in the Detroit metropolitan and Service: (313) 446-6068 Vacant Commercial Land DELIVERY SERVICES suburban markets. Responsibilities include sales Call or email today for information and leasing of the company’s Detroit portfolio. All FAX: (313) 446-1757 Local Trucking/Warehousing inquiries will be held in confidence. Please email on a custom advertising plan! Vacant commercial corner locations at 1 Pallet - Truck Loads E-MAIL: [email protected] resumes to [email protected] traffic lights in Canton, Westland, Ann “Where You Get Your Buck$ Worth” Same Day - Next Day INTERNET: Canadian Consolidations www.crainsdetroit.com/section/classifieds Arbor, Plymouth, Brownstown, Romulus & Storage Trailers [email protected] Trailer Parking See Waterford. Call Van Esley Real Estate at www.mrtransportation.com 313.446.6068 Crainsdetroit.com/Section/Classifieds 734-459-7570 [email protected] 734-946-7031 for more classified advertisements 20120220-NEWS--0022-NAT-CCI-CD_-- 2/17/2012 5:01 PM Page 1

Page 22 CRAIN’S DETROIT BUSINESS February 20, 2012 Romney: Local biz leaders pony up ■ From Page 1 the 11th most of all states to Rom- ney’s campaign. And that’s not to mention the or- ganizational support the state’s Tight race, ‘super PACs’ business community is providing Romney’s campaign, nor the donations made to Restore Our Future, a super political action committee fatten TV ad spending that is backing the son of former Michigan Gov. George Romney. BY BILL SHEA take aim at Santorum as a spend- CRAIN’S DETROIT BUSINESS thrift Washington insider. Santo- Romney fundraisers rum, a former U.S. senator from Among the business leaders vol- The sudden uncertainty in Pennsylvania, is beginning to unteering for the Romney cam- Michigan’s Republican presiden- run ads critical of Romney’s at- paign is Edward Schwartz, presi- tial primary, along with the unlim- tack ads. dent of Gregory J. Schwartz & Co. Inc., ited fundraising abilities of the “We didn’t anticipate a great a Bloomfield Hills investment ad- “super PACs” that didn’t exist in deal of spending early on this visement company. Schwartz, his the last election, has proved to be a year,” said Ed Fernandez, general father, Gregory Sr., and brother financial windfall for local televi- manager and vice president at De- Walter are among Romney’s Michi- sion stations. troit ABC affiliate WXYZ-Channel 7. gan finance co-chairmen. Two other Detroit native Mitt Romney was He said the Santorum campaign brothers, Joe and Gregory Jr., are thought to be a lock to win his has alerted his station that it’s go- members of the campaign’s South- home state’s Feb. 28 primary, but ing to buy airtime for commer- east Michigan fi- with Rick Santorum surging past cials, but not yet a dollar amount. nance commit- him in several He declined to disclose financial tee. recent specifics on the ad buys thus far. “Basically, statewide polls, Santorum’s poll lead is forcing it’s raising mon- the GOP front- the Romney campaign to spend its ey,” Edward runner and his cash on TV ads in Michigan rather Schwartz said of allies have been than in other battleground states, his role in the pouring money said Matt Grossmann, an assistant campaign. “It’s into Michigan professor of political science at going to people TV ads. Michigan State University and co-au- that we know, Romney’s thor of the Campaigns & Elections who are friends Ed Schwartz campaign textbook. Santorum and clients, to ask them to con- bought $178,000 “No one was prepared for (San- tribute to Mitt’s campaign. in commercial airtime last week torum’s surge),” he said. “That’s a hard to thing to do,” on Detroit NBC affiliate WDIV-Chan- Fernandez compared the TV ad Schwartz said. “Our initial incli- nel 4 for a new 30-second spot that spending to a poker game among nation was to say ‘no thank you’ ” highlights his Michigan roots, The the campaigns, with each spend- when the family was approached New York Times reported. ing only a certain amount and see- about supporting the campaign in The Romney-allied Restore Our ing what happens — and how the such a public manner, he said, be- Future super PAC bought more other candidates respond. cause the firm’s clients hold a than $470,000 for commercials that “The next couple of weeks will range of political views. will run Feb. 14-20 in the Detroit, be incredibly active,” he said. “But we felt in our hearts, with Grand Rapids, Lansing and Flint The Gingrich and Ron Paul cam- 100 percent sincerity, that Mitt had markets, the Times said. That will paigns are spending nothing or the skills to do the job,” Schwartz bring the group’s TV spending in very little on TV airtime in Michi- said. Michigan to more than $700,000 by gan, he said. Giving to the super PAC have this week, according to the Times. Thus far, the 2012 primary sea- been Farmington Hills-based law However, some of those ads tar- son is making up for a lackluster firm Trott & Trott PC, $200,000; Troy- get Newt Gingrich, who is fading 2008, when the Democratic Party based Suburban Collection President in the polls, rather than Santorum candidates pledged not to cam- and CEO David Fischer, $150,000; — who is ramping up his own paign in Michigan during the pri- Kentwood-based Autocam Corp. Michigan spending, with $438,000 mary because of an impasse over President John Kennedy, $100,000; in new ad buys for the next two the election date, said Marla Drutz, Detroit-based Soave Enterprises Inc. weeks, according to NBC News. WDIV’s vice president and general President and CEO Anthony Soave, The pro-Santorum super Pac manager. She also declined to talk $50,000; Liggett Co. Chairman Red White and Blue Fund is reported about financial specifics. Robert Liggett, $25,000; and South- to have bought another $652,000 in “From the TV side, it benefits field-based Young and Susser PC, Michigan. us,” she said, noting that contested $7,500. All figures are from the Overall, Romney and his super congressional races add revenue, FEC website. PAC are estimated to have spent as well. Michigan Attorney General Bill $2.2 million on TV in Michigan, Grossmann predicts this race Schuette, Romney’s state cam- while Santorum and his group will be the first to surpass $1 bil- paign chairman, said Romney has have spent $1.1 million, accord- lion in overall campaign spending, “significant appeal to job ing to an NBC report quoting the largely because of the super PACs. providers in Southeast Michigan.” ad tracking firm Smart Media Bill Shea: (313) 446-1626, “They’re not looking for any- Group Delta. [email protected]. Twitter: thing other than sound manage- Some Restore Our Hope ads do @bill_shea19 ment and someone who under- stands the economy,” he said. “There’s a lot of us working for the forefront during the general Michigan Gov. Rick Snyder also Mitt because we believe in him,” election, particularly considering endorsed Romney on Thursday. said Robert Taubman, chairman, the revived fortunes of General Mo- Romney hasn’t lived in Michi- president and chief executive offi- tors and Chrysler, Ballenger said. gan since heading to college after cer of Bloomfield Hills-based Taub- But Richard Hilgert, automotive graduating from Bloomfield Hills’ man Centers Inc. “The money is im- securities analyst covering the Cranbrook Schools in 1965. But his portant, but so is the time and supply base for Chicago-based Michigan background tends to thought process.” Morningstar Inc., agreed with Rom- deepen his support here, said Bill ney’s take on the auto bailouts. Ballenger, editor and publisher of “We would have definitely seen Inside Michigan Politics. For exam- Auto bailouts more bankruptcies and more ca- ple, serving as Romney’s national pacity right-sizing without the finance co-chairmen are John Romney’s views on the GM and bailout, but in the long run, it Rakolta Jr. — head of Detroit- Chrysler bailouts have become a would have been better for the in- based construction company Wal- key topical area in the campaign. bridge Aldinger Co., whose wife, Ter- Romney has defended his posi- dustry had it gone through a nor- ry, is the sister of Romney’s tion, explaining that he would mal bankruptcy process rather former sister-in-law — and G. have favored “managed bankrupt- than being subsidized by the U.S. Scott Romney, a partner at Honig- cy” for the auto companies. government,” he said. man Miller Schwartz and Cohn LLP Democrats and the UAW, howev- Reporter Dustin Walsh con- and Mitt’s brother. er, will be sure to move the issue to tributed to this report. 20120220-NEWS--0023-NAT-CCI-CD_-- 2/17/2012 5:02 PM Page 1

February 20, 2012 CRAIN’S DETROIT BUSINESS Page 23 Atwater: Brewery changes biz model ■ From Page 3 Brewing Co. was producing about more tanks this year to reach his Inc., said Michigan can easily sup- 2,500 barrels of beer. Last year, it production goal of 32,000 barrels. port another large-scale craft produced 7,500 barrels, which sat- The new tanks also allow expan- brewery. isfied only about half of its pur- sion into new markets again. Beer “It seems there is one thing all chasing orders. Every barrel holds will be distributed by year’s end to microbreweries have in common, 31 gallons of beer, or a little more 12 states, including Ohio, Illinois, they can’t make enough beer or ex- than 14 cases. Pennsylvania, Indiana, Massachu- pand fast enough,” he said. Rieth said his main demograph- setts, New Hampshire, Vermont, The dividing lines between mi- ic is males age 21 to 35 but that At- Rhode Island and Maine. cro, craft and mass-market brew- water’s distinctive product offer- The growth has Rieth looking to eries aren’t hard and fast. ings, such as its chocolate stout add space for a much larger bot- In Michigan, beer makers are and vanilla java porter, are a hit tling and distribution facility. considered microbrewers for li- with female beer drinkers. In fact, He plans to either add 60,000 censing purposes if they make less vanilla java porter makes up about square feet to his current building than 30,000 barrels a year. Larger 25 percent of total sales. or build a 100,000-square-foot brewers, whether craft or mass Revenue also has grown. building next door while keeping market, fall into the same licens- In 2005, the company generated his remaining building running as ing category. The Brewers Associa- about $750,000 in revenue. Last the brew house. tion, a trade association for inde- year, it was about $1.6 million. Pro- Rieth said the expansion is go- pendent small brewers, defines jections are for $3 million in 2012 ing to cost about $6 million and craft brewers as independent and $6 million in 2013. will require 30 more employees. brewers making up to 6 million Demand for brews outstripped Scott King, owner of MillKing It barrels a year of traditional beer. supply enough that Rieth said he Productions, said sales at his Royal In Michigan, microbreweries had to pull out of five markets, in- Oak brewery are increasing at a sold 276,809 barrels of beer in 2010, cluding Chicago, because he could slow but steady clip. 159,819 barrels of which were sold not manufacture enough suds to “We are still in a position where in-state. fill the orders. as much beer as we make we sell, Graham says all craft beer made Rieth said a rebranding effort is and then some,” King said. “Our up about 4 percent of total beer sales one of the biggest reasons for the name of the game is not selling in the state, but Michigan brews increase in sales. Atwater spent more beer, it’s increasing capacity made up half of all craft beer sales. about $100,000 on new packaging. to meet demand.” The nationwide average for craft “Craft beer is just like any prod- But King said he also is having a beer sales hovers around 5 percent. uct, first you have to get consumers hard time meeting demand. “We are lagging behind the na- to try it,” Rieth said. “Then you “We don’t want to sell 500,000 tional trend, but if you start com- have to have a good enough product barrels a year,” King said. “I don’t paring Michigan to the nation we to get them to come back.” want to get into a place where we are not average when it comes to Rieth recently installed four new are behind the eight ball and have making craft beer,” Graham said. brewing tanks, at $30,000 each, ca- to bring in investors. We want to “We have more breweries than all pable of individually producing focus on the beer, and we do that but four states.” 2,600 gallons of beer, increasing its by limiting distribution.” Nathan Skid: (313) 446-1654, current production to 15,000 bar- Scott Graham, executive direc- [email protected]. Twitter: rels. He also plans to add eight tor of the Michigan Brewers Guild @nateskid Inforum: Setting sights on angel funds Litigation Experience ■ From Page 3 by Michigan Women’s Foundation April 2 at the University of Michigan- women-led, high-growth ventures In Your Corner. President and CEO Carolyn Cassin Dearborn. — will provide coaches to help fe- and fellow managing partner Lau- The program will teach women male high-tech entrepreneurs ren Flanagan to invest in woman- with some technical or business from Michigan qualify for mem- owned companies. experience to create technology bership in the program. Angel education builds on two companies based on inventions The group will also promote other efforts Inforum launched in from the region’s research institu- Michigan to high-tech, woman-led January to spur female-owned tions and federal laboratories. ventures around the world and high-tech ventures: the Achieving UM-Dearborn, Michigan Small bring its venture capitalists and the Commercialization of Technol- Business and Technology Develop- angel investors from around the ogy in Ventures Through Applied ment Center, TechTown, Automation globe to Michigan through a series Training for Entrepreneurs (AC- Alley and Walsh College are collabo- of events over the next two years TIVATE) technology commercial- rating with Inforum on the ACTI- to bring them face to face with ization curriculum and local pro- VATE curriculum. high-tech women entrepreneurs gramming from Astia, a global The program costs $3,500, with and other VC and angel investors network of entrepreneurs, men- need-based scholarships provided in Michigan. tors and investors whose member- through the NEI grant, Barclay Since 2003, the 200 startups that ship is open to female founders said. have come through Astia have and top managers. Webinars on the program are achieved a greater than 60 percent Backing the three-pronged ini- available at funding success rate, meaning that tiative is a $718,000 grant from the www.inforum 60 percent of the people or compa- Michigan 21st Century Jobs Fund and michigan.org. nies who pitch in front of Astia in- a $250,000 grant approved by the Inforum hopes vestors are successful in getting New Economy Initiative. to get 40-50 funded, Viges said. “Women-led, innovation-based women focusing Lifetime membership in Astia ventures is really a space that has on high-tech and costs $5,000. been untapped,” Barclay said. innovation- Inforum hopes to help the local “The goal for the initiative is to po- based technolo- women entrepreneurs who join sition Michigan as the Midwest gy through the Astia to attract $8 million in capi- hub for high-tech, high-growth program and tal within the next five years. Brett Rendeiro Viges women entrepreneurs.” eight to 10 com- NEI is interested in funding an Fewer than 10 percent of high- panies launched by those students innovation system that works, tech ventures around the globe are over the next two years, Viges said. said NEI’s executive director Dave led by women, said Kapila Viges, Classes and online sessions take Egner, who is also president and executive director of entrepre- place one evening a week and one CEO of the Detroit-based Hudson- neurial strategies at Inforum. Saturday each month. Webber Foundation. In Michigan, about 30 percent of Inforum plans to expand the Inforum’s initiative “connects First Tier Ranking small businesses are woman- training to west Michigan in 2013. to multiple pieces already in the in Seven Areas owned, but most are lifestyle mi- In exchange for a $90,000 spon- entrepreneurial ecosystem.” of Litigation croenterprises employing fewer sorship from Inforum, San Fran- Sherri Welch: (313) 446-1694, than 10 people, Viges said. cisco-based Astia — a global non- [email protected]. Twitter: I Metro Detroit I Grand Rapids I Kalamazoo I Grand Haven I Lansing ACTIVATE’s first class kicks off profit dedicated to the success of @sherriwelch 20120220-NEWS--0024,0025-NAT-CCI-CD_-- 2/17/2012 5:19 PM Page 1

Page 24 CRAIN’S DETROIT BUSINESS February 20, 2012 Bhargava: Energy drink mogul pursues big ideas,big returns ■ From Page 1 osmosis, the most commonly used cause after you invent it there is a procedure. whole lot of work that has to hap- Such an improvement would go Bhargava on both ends of stock deal for charity pen before it makes any money. far beyond current forecasts to re- “That’s why most inventions duce the cost and energy consump- Despite a business philosophy ed transaction could jeopardize Trust, it gave out only $1.2 million die.” tion of desalination by 30 percent of simplicity, Manoj Bhargava’s the tax-exempt status (of the to three groups, the American India But even with a billion dollars in the next 20 years, said Leon charitable donations are far from charity) and actually trigger a lot Fund, the Hans Fund and the Acu- in hand, there are still headwinds Awerbuch, a Boston-based desali- simple. of tax issues (for the companies),” men Fund in 2010. to bring projects to market, said nation consultant and member of One in particular involves a se- she said. Another $3.9 million in grants David Brophy, who works to pair the board of directors for the Tops- ries of deals with a charity he But donating shares rather were given through India-based inventors with equity partners as field, Mass-based International De- uses, Rural India Supporting Trust, than cash is a very common form Devyani Management Services. director of the Center for Venture salination Association. which has $1 billion in cash on of charitable giving, she said. Because Rural India is a sup- Capital and Private Equity Fi- Reducing the cost of desalination hand. If shares were bought at $2 a porting trust, it does not have a nance at the University of Michigan’s would have a major impact by mak- In 2009, Bhargava’s Innovation share and donated at $10, she said, minimum amount that needs to Ross School of Business. ing it comparable to traditional Ventures LLC donated 45 percent of the donor not only gets a tax bene- be donated each year as a private “It’s easy to say that having a methods of getting water from the company’s shares to the chari- fit for the donation but also does- foundation does. billionaire behind you helps, but rivers and lakes. The current cost of ty, according to Rural India’s fed- n’t have to pay the capital gains A list of the grants supplied by that’s not always true,” he said. desalination, in round numbers, is eral Form 990 disclosure form. on the $8-a-share appreciation. Lieberman include donations to a “Someone with too much money $4 for every 1,000 gallons desalinat- That same year, those shares Bhargava declined to comment hospital and a school in India as isn’t going to be as dependent on ed, compared to half that cost for ex- were sold for $623 million to a on the situation specifically. well as the Society for the Visually the success of a product like some- isting water extraction methods. Carson City, Nev.-based entity And his name is not on Rural Handicapped, which helps people one who is worried about starving “If there is a gentleman who can called Nevada 5 Inc. India Supporting Trust. Rather, in India who are blind. There are or going broke.” reduce the costs of this process by Bhargava is president, secre- the principal officer is David 18 charities in total on the list. 80 percent, then more power to tary, treasurer and director of Lieberman, of counsel at South- Bhargava said he’s in the Size, price matters him,” Awerbuch said. “I don’t Nevada 5, according to incorpora- field-based Seyburn, Kahn, Ginn, process of “ramping up” the use think that’s possible. But there are tion documents from the state of Bess and Serlin PC. of the charity and trying to find It was execution that Bhargava institutions working on this Nevada. The trustee is Indu Rawat, of the groups that are truly helpful and his team brought to 5-Hour En- around the world. And if there is a The idea of one person having India. Rawat is identified as an in- versus groups that “will just steal ergy. better process out there, the indus- control of both the donor and the vestor in Living Essentials in an the money.” The idea came to him while he try will surely adopt it quickly.” buyer of the shares could be a pro- exhibit filed in a wrongful death “I’m not thinking about this the was attending a trade show, some- While Bhargava was short on hibited transaction, said Heather suit related to 5-Hour Energy that way the government would, that thing he often did as a way to find details, the machine would go into Raschke, who heads the nonprofit was withdrawn in November. if you throw enough money at a new ideas. He sampled an energy an infrastructure placed between practice for the Michigan office of “If the government gives me a problem it will be solved,” he drink that had a different effect an intake and an outtake pipe. UHY LLP in Farmington Hills. choice of whether to give my mon- said. “There are people doing than other products on the market. “The last 50 years were about Raschke, who does not know ey to a charity and help those in some great things and helping the It was a 16-ounce drink, and oil,” Bhargava said. “The next 50 Bhargava’s situation firsthand, this world who are truly poor, or people in this world who are truly Bhargava was eager to partner years will be about water. Maybe said the IRS typically wants a cer- give it to the government, which poor, and the challenge is to sepa- with the inventor to collaborate on you’re responsible for something tain amount of separation among is rich, I’m going to give it to the rate the ones doing great things a new business. that can help, really impact, a bil- the companies involved in such a poor,” Bhargava said. from the ones doing marginal “They were science guys; I was lion people around the world.” deal. And despite the $1 billion ac- work.” just a lowly business guy,” said Aside from the water technolo- “Being involved in a prohibit- count for Rural India Supporting — Daniel Duggan Bhargava. “I said, ‘Look, you pro- gy, he’s got other companies with duce it, I’ll sell it.’ high potential. “They didn’t want to work with Among them: A hydroponic gar- an MBA can be harmful to the turning them into businesses. ness where things aren’t sold me, though.” dening system where one 12-inch process by trying to make it too based on what they cost, it’s based The innovation he brought to square box can have as much pro- complicated.” Finding ideas on what they do.” the table, however, isn’t the formu- duction as an entire acre of farm His philosophy of absolute sim- His search for new businesses la as much as it is the size. land. Since it’s indoors, farming plicity is easy to see throughout Bhargava dropped out of the became a business. Around 2000, The formula for 5-Hour Energy can happen all year long, rather his offices. business school at Princeton Univer- he attracted the interest of a few is different from what he original- than once a year. The headquarters of Innovations sity after deeming the education large corporations that shared his ly sampled, particularly the taste. “And it can be pesticide free, be- Ventures LLC, which does business there as something that wouldn’t interest in finding new ideas. “It was severe,” he said. cause it can be done in any factory as Living Essentials LLC, occupies be useful to him. Instead, he threw Bhargava created Chemicalpart- He reduced the size to two in any metro area,” he said. 25,000 square feet in a Farmington himself into a long string of odd ners.com, in which he earned a fee ounces as a way to compete Diesel fuel is also in the sights. Hills tech park. jobs such as driving a cab, laying from corporations by finding new against Monster, Red Bull and the In particular, a way to make diesel The building is hidden in plain brick and driving a dump truck. inventions and business ideas. other drinks on the market. fuel 20 percent more efficient with sight along an industrial park dri- In 1990, he came across a It was a business that made Despite its smaller size, he priced the use of a special chemical addi- ve. It can’t be seen from any free- company for sale that produced money, but became frustrating. it with the other energy drinks on tive. ways or main roads, but “Living vinyl strapping for outdoor furni- “They’d pay us, but they weren’t the market at $3 per bottle — de- “The locomotive industry alone Essentials” is clearly on the side of ture. Because he was able to negoti- ever, really, going to do anything spite the advice of retailers. uses 3.2 billion gallons of diesel the building. ate a sale price that was less than with these ideas,” Bhargava said. “Everyone we took this to want- fuel a year,” he said. “Think about “Nothing fancy,” he says, with the amount of money that could be “Large corporations are looking ed to tell me that we’d never be what a 20 percent savings means, pride. generated by selling the assets, he for ideas to fill their plants. They able to sell it for $3, that it has to be and that’s just for locomotives.” The conference room table is was able to find a bank willing to want something new, as long as lower,” he said. “I said, ‘OK, Bhargava’s funds are also back- clean, tidy and made of maple-col- back him. it’s not different. That’s really dif- maybe you’re right, maybe it ing a company with a procedure to ored Formica. Another point of “I said, ‘I know I can turn that ficult to find. won’t sell for $3. But if you’re remove 98 percent of the mercury pride. company around in 60 days,’ ” he “I’d say, ‘Hey guys, look, if this wrong, I can never raise the price from coal. “That was my only request for said. “And the bank went along be- is a new idea, it’s not gonna fit to $3.’ ” “But the target is to create some- this conference room,” he boasts. cause the price we were paying your plant.’ Come on.” Now, Bhargava is glad he kept it thing like this which has an im- “I told them the table can be any- was less than liquidation value.” at $3. pact, but also saves money for the thing, as long as it’s made of He turned the company around Knowing the inventor And the guys from the trade guys running these factories,” he Formica.” and parlayed that into the acquisi- show? said. “It cannot be government The one-story office space has tion of another company in the The take-away, for Chemical- “Now they’re out of business.” supported, because then what hap- long hallways and walls clean and plastics supply chain, Prime PVC partners.com, was a greater under- pens when the government fund- white. The break room has pret- Inc. in Marion, Ind. standing of the mind of the inven- Court challenges ing dries up? You have the next zels and Poppycock on a table for When he built the firm up to $25 tor. ethanol.” employees, next to a large display million in sales in 2000, he retired. Spending several years and col- One topic Bhargava declined to of 5-Hour Energy. He sold it in 2006. lecting close to 2,500 submissions discuss was Chaser, a so-called His office is a shared space with “It was so boring,” he said of his from inventors around the world cure for hangovers, based loosely A ‘simple’ philosophy four other executives. retirement. “I sat around saying, through the company, Bhargava on the use of activated charcoal. Bhargava’s interest in the com- Not messy, not neat, it’s the ‘OK, what do I do now?’ ” learned that the idea is crucial, but It seemed like a great idea, he panies and technologies is driven space of someone who works for a Bhargava set out looking for in- it will die without execution. said. “But people never believed it. by an eye for ideas that’s been living. The large office space is ventions, technology and ideas “Most guys who invent stuff It really does work.” honed over more than 20 years of decorated with posters taken from that he could use for building a don’t have the execution or the The product is no longer on the buying businesses. the website despair.com. new company. He focused on capital, because they’re inven- market, and Bhargava refused to “I’m not looking for ideas that One example: “Government: If chemical-oriented ideas because of tors,” he said. talk about it other than to say “it’s have to fit with what this company you think the problems we create their potential profitability. “And a lot of times they won’t not something we’re even working is doing,” he said. are bad, you should see our solu- “Basically, you mix a bunch of part with their ideas. They say, with anymore.” “I use a technical term,” he tions.” stuff together and you can sell it ‘I’m the inventor, I’m worth 90 per- His work on Chaser also repre- added with a playful grin. “Is it a Dressed in a pair of loose, faded for more than you bought it for,” cent of this idea.’ sents a project involving two for- slam dunk? It’s as simple as that. It jeans, Bhargava said his life’s he said. “But they’re not worth 90 per- mer executives who’ve been in con- doesn’t take an MBA to figure out work has been dedicated to finding “I can mix two nickels together cent. They’re usually worth 10 per- flict with Bhargava in recent years. if it’s a slam dunk or not. In fact, new inventions and ideas, and and sell it for a dollar. It’s a busi- cent, depending on what it is, be- See Next Page 20120220-NEWS--0024,0025-NAT-CCI-CD_-- 2/17/2012 5:19 PM Page 2

February 20, 2012 CRAIN’S DETROIT BUSINESS Page 25

From Previous Page In Manoj Co-creator of Chaser was Tom WHAT 5-HOUR HAS BUILT Bhargava’s Farmington Hills Morse, one of two former execu- www.crainsdetroit.com office, a grave tives who have testified against Revenue EDITOR-IN-CHIEF Keith E. Crain marker signifies PUBLISHER Mary Kramer, (313) 446-0399 or Bhargava as witnesses in court Ⅲ $1.2 billion in 2011 sales a victory in a [email protected] cases. Morse and Kevin Zwierz- “cemetery” of EXECUTIVE EDITOR Cindy Goodaker, (313) 446- chowski did not return two phone Real estate 0460 or [email protected] rivals to 5-Hour MANAGING EDITOR Jennette Smith, (313) 446- messages left by Crain’s. Ⅲ West Tech Park, a technology Energy. Bhargava 1622 or [email protected] In particular, they have testified park near Haggerty and 12 Mile has a track DEPUTY MANAGING EDITOR Daniel Duggan, (313) roads in Farmington Hills that has record of bringing 446-0414 or [email protected] that it was Bhargava’s goal to con- SENIOR EDITOR Bob Allen, (313) 446-0344 or nine buildings on 25 acres. It’s trademark [email protected] stantly transfer all assets out of In- across the street from the novations Ventures to make Bhar- lawsuits against WEST MICHIGAN EDITOR Matt Gryczan, (616) 916- executive offices of Innovation would-be 8158 or [email protected] gava “judgment proof.” COPY DESK CHIEF Gary Piatek, (313) 446-0357 or Ventures LLC. competitors. And the lawsuits are plenty. [email protected] Employees ASSISTANT NEWS EDITOR Jeff Johnston, (313) There have been 30 cases involv- NATHAN SKID/CRAIN’S DETROIT BUSINESS 446-1608 or [email protected] ing Innovation Ventures since Ⅲ 60 in executive and sales DATA EDITOR Brianna Reilly, (313) 446-0418, positions in Farmington Hills [email protected] 2003 in U.S. District Court around safety of 5-Hour Energy is straight- that’s a headache enough. Why WEB DEVELOPER Steve Williams, (313) 446- the country. The cases show the Ⅲ 300 manufacturing 5-Hour forward. would I want another headache in 6059, [email protected] Energy in Warsaw, Ind. WEB EDITOR Gary Anglebrandt, (313) 446-1621, spirit of Bhargava and his team: “I use it every day,” he said. my life?” [email protected] bringing trademark suits against Ⅲ 400 offering 5-Hour Energy “Any product I produce is some- Front row seats at the Super EDITORIAL SUPPORT Robertta Reiff (313) 446- samples in offices using 66 vans 0419, YahNica Crawford, (313) 446-0329 competitors, winning or settling thing I’d be comfortable having my Bowl? in 27 markets NEWSROOM (313) 446-0329, FAX (313) 446- most of the cases, and appealing family use.” “No, I really don’t like to go to 1687 TIP LINE (313) 446-6766 the few losses. Funds crowded places. Really, the only REPORTERS His group is plaintiff in 18 of the Ⅲ sport I like to play and watch is Daniel Duggan, deputy managing editor: Covers cases. Within the complaints, Stage 2 Innovations LLC, a ‘I do business because real estate. (313) 446-0414 or [email protected] $100 million fund led by former tennis.” Jay Greene, senior reporter: Covers health care, there are stories of intense compe- Chrysler LLC CEO Tom LaSorda to I like business’ Spoiled child? insurance and the environment. (313) 446-0325 or tition, such as allegations that [email protected] find new manufacturing ventures “I tell my son (who is in college) Chad Halcom: Covers law, non-automotive Bhargava’s teams spread incorrect His life outside of work is dedi- Ⅲ Lifeline Ventures LLC, a that he is not poor enough to quali- manufacturing, defense contracting and Oakland information to retailers that 5- cated to his family and a few activ- and Macomb counties. (313) 446-6796 or $100 million fund run by fy for one of my charities, so he’s [email protected] Hour Energy’s competitors’ prod- ities, such as tennis. MicroDose Life Sciences LLC, on his own.” Tom Henderson: Covers banking, finance, ucts are on recall. which also oversees a $50 million He is engaging, relaxed and very technology and biotechnology. (313) 446-0337 or In his younger days, Bhargava [email protected] Energy drinks in 2-ounce bot- medical device incubator fund casual in his mannerisms. He’s not drove a cab in New York, he has Nancy Kaffer: Covers small business, the city of tles, using similar names to 5-Hour Ⅲ ETC Capital LLC, another private known as someone who attends Detroit and Wayne County government. (313) 446- operated a printing press, laid 0412 or [email protected] Energy, are all open season. equity fund used by Bhargava, business or social events locally. Bill Shea, enterprise editor: Covers media, In his office, he has a “ceme- total capitalization unknown He wouldn’t give his net worth, brick and driven a dump truck. advertising and marketing, the business of sports, In the mind of Manoj Bhargava, and transportation. (313) 446-1626 or tery” in which the so-called impos- though a person with knowledge of [email protected] jury verdict against California- his finances said it is “meaningful- it’s all work. Something he enjoys. Nathan Skid, multimedia editor. Also covers the tors are laid to rest. When the legal food industry and entertainment. (313) 446-1654, team wins a victory, a small card- based competitor N2G Distributing ly north of a billion.” And from “There are a lot of people who do [email protected] Inc. for selling a product that re- what Bhargava says, his spending business to be important and to be Sherri Welch: Covers nonprofits, services, retail board tombstone is placed by a bot- and hospitality. (313) 446-1694 or tle of the product. sembles 5-Hour Energy. (See story, isn’t characteristic of other bil- powerful and to be well known,” [email protected] Page 18.) lionaires. he said. “I do business because I Dustin Walsh: Covers auto suppliers, steel, higher Holding a bottle of “6-Hour Ener- education and Livingston and Washtenaw gy,” Bhargava shakes it in the air. There also are cases that involve His home? like business. counties. (313) 446-6042 or [email protected] “Seriously?” he says playfully. false advertising claims that Chas- “My wife would like to see us in “There is no other motive. I’m ADVERTISING “6-Hour Energy? Come on.” er or 5-Hour Energy don’t have the a bigger home, but I think it’s not doing this to get that. I just like ADVERTISING DIRECTOR Marla Wise, (313) 446- 6032 or [email protected] The team has won five cases out- effects advertised. enough.” it. It’s my football, it’s my basket- SALES INQUIRIES: (313) 446-6052; FAX (313) right and lost two — which are There was also the suit involv- Yachts? ball. 393-0997 both on appeal. In 14 of the cases, ing Antonio Hassell, a Memphis “No.” “And with all of it, I just try to do SENIOR ACCOUNT EXECUTIVES: Matthew J. Langan,Tamara Rokowski there was a settlement or volun- man whose family blames 5-Hour Travel? things that make sense and that ADVERTISING SALES Christine Galasso, Lori tary dismissal by one of the par- Energy for his death in 2009 from “Pretty much only for business. are simple.” Tournay Liggett, Dale Smolinski a heart attack. The complaint was We go to Florida once in a while.” Daniel Duggan: (313) 446-0414, CLASSIFIED SALES (313)-446-0351 ties. The other cases are open. MARKETING DIRECTOR Jeff Kapuscinski The 5-Hour team has victories withdrawn in November. Vacation homes? [email protected]. Twitter: EVENTS DIRECTOR Nicole LaPointe such as the recent $1.75 million Bhargava’s only response to the “I have one home, here, and @d_duggan EVENTS COORDINATOR Kacey Anderson SENIOR PRODUCER FOR DIGITAL/ONLINE PRODUCTS Pierrette Dagg MARKETING ARTIST Sylvia Kolaski SALES SUPPORT Suzanne Janik, YahNica Crawford AUDIENCE DEVELOPMENT MANAGER Candice Yopp Music: MARKETING COORDINATOR Jenny Griffith Model T plant a new chamber for music PRODUCTION MANAGER Wendy Kobylarz PRODUCTION SUPERVISOR Larry Williams ■ From Page 1 CUSTOMER SERVICE Chamber Music Festival and Eisen- Adolphus Hailstork’s “John Hen- not as likely they’ve heard cham- The society has performed al- MAIN NUMBER: Call (877) 824-9374 or write [email protected] hower Dance. ry’s Big” (Man vs. Machine), ac- ber music. most exclusively at the Seligman SUBSCRIPTIONS $59 one year, $98 two years. But Detroit Chamber Winds, companied by a pianist. A Universi- “Structurally Sound” is just one Performing Arts Center. The audi- Out of state, $79 one year, $138 for two years. Outside U.S.A., add $48 per year to out-of-state which is operating on a budget of ty of Michigan music professor, example of a classical music group ence that typically comes to the rate for surface mail. Call (313) 446-0450 or about $800,000 this year, continues Jackson will bring some of his mu- going into the community to at- Chamber Music Society’s concerts (877) 824-9374. SINGLE COPIES: (877) 824-9374 to seek sponsors for each perfor- sic students to perform with De- tract new audiences. is not getting any younger, Presi- REPRINTS: (800) 290-5460, ext. 125; mance. troit Chamber The Detroit Symphony Orchestra dent Steve Wogaman told Crain’s (717) 505-9701, ext. 125; or lindsay.wilson @theygsgroup.com Historically, the organization Winds musi- has expanded its community pro- earlier this month. TO FIND A DATE A STORY WAS PUBLISHED: has focused its performances on cians. gramming with the new musicians “They are incredibly passionate (313) 446-0367 or e-mail [email protected] suburban religious institutions Music from contract put in place last spring. and committed, but we have to CRAIN’S DETROIT BUSINESS IS PUBLISHED BY like Kirk in the Hills Presbyterian the early 1900s Through its Neighborhood Con- look ... to the next generation of lis- CRAIN COMMUNICATIONS INC. CHAIRMAN Keith E. Crain Church or St. Hugo of the Hills will comprise a cert Series, the DSO is taking its teners.” PRESIDENT Rance Crain Catholic Church in Bloomfield Hills, second part of performances to the suburbs, per- The society, which operates on SECRETARY Merrilee Crain Okun said. the concert, and forming at venues like the Selig- an annual budget of about $750,000, TREASURER Mary Kay Crain Executive Vice President/Operations “While we want to continue 15-20 musicians man Performing Arts Center at Detroit isn’t “mining for donors in Novi,” William A. Morrow those relationships, we also know will perform Country Day School Group Vice President/Technology, in Beverly Hills, but it is looking to attract new lis- Manufacturing, Circulation there’s a significant and growing from different Kirk in the Hills, Grosse Pointe teners to its concerts from that Robert C. Adams Jackson Vice President/Production & Manufacturing urban audience we want to reach,” points in the Memorial Church, Congregation area, he said. Dave Kamis he said. “In order for us to play a plant to take advantage of the Shaarey Zedek in Southfield and Its new series includes shorter, Chief Information Officer role in the next generation of the building’s acoustic properties. Ford Community & Performing Arts informal and interactive perfor- Paul Dalpiaz Chief Human Resources Officer community, we have to keep Wayne State University’s Irvin D. Center in Dearborn. mances and presentations that in- Margee Kaczmarek stretching ourselves.” Reid Honors College and its dean, The DSO said in January that it clude things like taking apart a pi- Director of Audience Development Operations Michelle Roth Detroit Chamber Winds report- Jerry Herron, worked with Detroit increased the number of donors to ano. G.D. Crain Jr. Founder (1885-1973) ed total revenue of $832,665 for fis- Chamber Winds on the concept for the symphony by 28 percent dur- A fourth, longer presentation, Mrs. G.D. Crain Jr. Chairman (1911-1996) cal 2011 ended July 31, with net as- the performance. ing its most recent annual scheduled for late May will take EDITORIAL & BUSINESS OFFICES: 1155 Gratiot Ave., Detroit MI 48207-2732; (313) sets of just under $390,000 at year’s Herron will speak about the fundraising campaign, which took place at Novi High School across 446-6000 end. plant’s background and the early place during the last quarter of from the library. Cable address: TWX 248-221-5122 AUTNEW DET CRAIN’S DETROIT BUSINESS ISSN # 0882-1992 The Piquette Plant performance 1900s. He will bring more than 300 2011, and it generated more than $1 Prior to the performance, the is published weekly, except for a special issue the will include music specially pro- students and about 30 WSU faculty million in new or increased giving. Chamber Music Society plans to third week of August, and no issue the third week of December by Crain Communications Inc. at grammed for the building and the and staff members. By January, four months into its set up a musical instrument “pet- 1155 Gratiot Ave., Detroit MI 48207-2732. Periodicals postage paid at Detroit, MI and early 1900s when the plant That leaves 100 additional tick- yearlong fundraising drive, the or- ting zoo” at the library to intro- additional mailing offices. POSTMASTER: Send hummed with production of the ets, at $10-$35, for sale through De- ganization had raised $6.4 million duce children — and anyone else address changes to CRAIN’S DETROIT BUSINESS, Circulation Department, P.O. Box 07925, Detroit, first Ford Motor Co. vehicles, and troit Chamber Winds’ website at of a $12 million goal for 2011-12. who is interested — to a variety of MI 48207-9732. GST # 136760444. Printed in later the Studebaker Corp. www.detroitchamberwinds.org. In a similar bid to attract new classical instruments. U.S.A. Entire contents copyright 2012 by Crain Detroit Chamber Winds trom- Most young people have been to audiences, the Chamber Music Soci- Sherri Welch: (313) 446-1694, Communications Inc. All rights reserved. bonist David Jackson will per- rock concerts, a symphony or a ety of Detroit launched a free series [email protected]. Twitter: Reproduction or use of editorial content in any manner without permission is strictly prohibited. form contemporary composer jazz concert, Herron said, but it’s at the Novi Public Library this month. @sherriwelch 20120220-NEWS--0026-NAT-CCI-CD_-- 2/17/2012 5:18 PM Page 1

Page 26 CRAIN’S DETROIT BUSINESS February 20, 2012 RUMBLINGS WEEK ON THE WEB FROM WWW.CRAINSDETROIT.COM, WEEK OF FEB. 11-17

Erie, Buffalo and Bingham- acres at 12701 Middlebelt founder of MacLean, Va.- ton, N.Y. New Detroit City Road from light manufac- based Science Applications The first major investor turing to general business, International Corp., donated Woodward in the team is Slows To Go. paving the way for a store $15 million the University of No financial details have Council districts and several outlots that Michigan College of Engi- been disclosed. Menard plans to sell. Also, neering. In honor of the do- Other team co-owners in- give downtown, Menard has asked the city of nation, UM’s board of re- windows get clude Sean Mann, who Warren for zoning vari- gents approved the founded the Detroit City Fut- ances on property on Van renaming of the Computer bol League in 2010, Dave Dyke Avenue. Science and Engineering Dwaihy, Todd Kropp and Midtown 2 seats Ⅲ Van Buren Township- Building to the Bob and Ben Steffans. based Visteon Corp. is in Betty Beyster Building. dvocates of a city Ⅲ a touch of art Season tickets for eight council by district talks with India’s Varroc The Detroit Tigers are home games start at $30. A in Detroit see Detroit Group about a sale of Vis- putting up a $10.5 million even empty store- went up in May and fea- Details about the team teon’s lighting unit, people high-definition video score- fronts on Woodward tured graffiti artists. City Council’s decision to are on its official website at choose a district map that familiar with the sales board at Comerica Park. Its S Avenue in down- Among the new artists is detcityfc.com. process said. The unit, Vis- 6,096 square feet will make it town Detroit will have a New Yorker Ron English, an splits downtown and Mid- town along Brush Street as teon’s smallest, may fetch the fourth-largest in Major more colorful façade for the influential figure among $75 million to $100 million, League Baseball. next four months. street artists, Cory UM business team tops a mixed bag. Ⅲ The approved map ampli- they said. The unit’s net The regional organiza- An art said. worth is $150 million. tion operating Cobo Center installa- The Farbman MBA contest fies the power of the down- Ⅲ town-Midtown area, giving General Motors Co. said reported $7.6 million in rev- tion called Group and Detroit A team from the University those neighborhoods two it will phase out its pension enue in fiscal 2011, up from Woodward Economic Growth of Michigan Ross School of representatives on the plan for salaried workers. $3.6 million in 2010. State Windows Corp. temporarily Business took the top prize council. Yet it creates About 70 percent of GM’s and federal subsidies fell features 17 donated the earlier this month at a local neighborhood districts for 26,000 salaried U.S. workers from $20 million in 2010 to paintings storefront annual MBA competition. the first time. are enrolled in a defined $12.5 million in 2011. and mixed spaces for the The students were charged Ⅲ “It is a historic day,” said benefit plan, and they will The $80 million Raleigh media works project. Also with analyzing a potential Studios COURTESY OF MIKE HAN Vince Keenan, executive di- be shifted to a 401(k) plan film studio that from 15 sponsoring the M&A deal and presenting rector of the nonprofit voter starting Oct. 1. opened last year in Pontiac artists in The Woodward Windows project is De- their findings to a panel of at the site of a former Gener- project places works by a education resource Publius. storefronts be- troit-based judges. al Motors Co. complex de- variety of artists in downtown tween Grand Strategic The Association for Corpo- COURTS Detroit storefronts. faulted when it failed to River and Park Staffing Solutions. rate Growth’s Detroit chapter ON THE MOVE Ⅲ A federal complaint make a $630,000 payment to avenues. See hosted the fifth annual ACG Ⅲ has been filed against bondholders that was due Organizers of the installa- streetculturemash.com/ Detroit Cup on Feb. 11 at Bloomfield Hills real Feb. 1. The State of Michigan estate investor C. Michael Wayne County’s chief infor- tion were the Detroit-based woodwardwindows and a Wayne State University. Retirement System had en- Kojaian has stepped down as mation officer, Tahir Kazmi, studio Street Culture Mash longer story on this project The team of students — tered into an agreement to chairman of the board of charging him with extor- LLC and the Royal Oak- at detroitmakeithere.com Joseph Brannock, Jeffrey Dor- guarantee the bonds under national brokerage Grubb & tion and obstructing jus- based gallery 323East LLC. sheimer, Shane Kelly and the previous administra- Ellis Co., saying this would tice. A second official, Zayd Mike Han, owner of Michael Trudeau — bested tion. On Feb. 1, the pay- let him devote more atten- Alleban, director of enter- Street Culture Mash and Detroit’s new soccer team four other business schools ment was made to bond- tion to his real estate in- prise application, has been lead organizer of Woodward for best business case pre- holders; the retirement to host Cleveland vestments and resolve any charged with obstructing Windows, said the project is sentation, winning $10,000 justice. County Executive system made $420,000 of The semi-pro Detroit City conflicts that might exist an attempt to demonstrate in scholarship funds. Robert Ficano says he won’t that payment. FC soccer team will open its between the investments that art can be an effective A team from Walsh Col- quit despite a call from Re- Ⅲ University of Michigan’s regular season on May 12 he owns through Kojaian marketing tool for business lege took the second prize, publican Commissioner board of regents eliminated and that it will attract cor- against visiting AFC Cleve- Cos. and its work with San- winning $5,000 in scholar- Laura Cox asking him to a rule requiring its presi- porate sponsors that want land at a to-be-determined ta Ana, Calif.-based Grubb ship funds. The remaining step down amid the federal dent and executive officers to reach young profession- location. & Ellis as a service finalists from Michigan State investigation. to retire by age 70. The als. That would allow for Team co-owner Alex provider. University, Wayne State Uni- Ⅲ Judge William Collette school’s president, Mary Sue larger installations and ac- Wright said a deal is near for Ⅲ Joseph Martinico, the versity and University of Michi- of Ingham County Circuit Coleman, is 68. The UM gen- tual commissions for the a home field, but he de- city of Detroit’s director of gan-Flint received $1,000 in Court permanently barred a eral counsel’s office said artists in future projects. clined to say where, other labor relations, has re- scholarship funds. review team studying De- the bylaw constitutes age “We’re activating vacant than downtown. signed. Birmingham-based Con- troit’s finances from using discrimination. spaces, and hopefully that The team nickname is Ⅲ Shonda Johnson is the way Mackenzie Inc., Maynards closed-door sessions, Ⅲ There were 3,495 home will attract new business to “Le Rouge.” new general manager for Industries Ltd. in Southfield, Bloomberg News reported. sales in metro Detroit in them,” Han said. The franchise will play in Ernst & Young Ltd., Birming- Detroit Marriott Renaissance Ⅲ Oakland County expects January, according to data This is the third phase of the National Premier Soccer ham-based Straith Law and Center, succeeding Bob to appeal an Ingham County from Farmington Hills- Woodward Windows, which League’s Midwest Division. London-based Pinsent Ma- Farmery, who is retiring. Circuit Court’s ruling that a based Realcomp II Ltd., up has featured 20 artists in to- The NPSL is a fourth-tier sons LLP sponsored the Johnson has worked for state law passed limiting from 3,265 during the same tal, said Jesse Cory, co-own- league within U.S. soccer’s event. Marriott International Inc. for Oakland to 21 county com- month in 2011. In Decem- er of 323East, which curated organization pyramid, and A statewide ACG Cup 33 years, most recently as missioner districts is uncon- ber, 4,143 homes were sold. the installation and helped Detroit’s divisional oppo- competition will take place manager of the Philadelphia stitutional. Judge William Metro Detroit’s median pay for supplies. The first nents include Cleveland, March 31 at MSU. Marriott Downtown in Philadelphia. Collette found that the new price in January was state law essentially $63,150, up from $60,000 one amounts to an unconstitu- year earlier. However, in COMPANY NEWS tional local act passed at the December, the median price was $68,000. Ⅲ Auto supplier Lear state level, violates a right of Ⅲ Penske Corp. founder Corp. can be sued for ac- judicial review and places Roger Penske and PNC Finan- tions taken after emerging an “unfunded mandate” on cial Services Group Chair- from Chapter 11 on Nov. 9, Oakland to draw a new plan. BEST FROM THE BLOGS man and CEO James Rohr 2009, and might be liable READ THESE POSTS AND MORE AT WWW.CRAINSDETROIT.COM/BLOGS have joined the lineup of for conduct before its emer- speakers at the Detroit Re- gence from bankruptcy, OTHER NEWS gional Chamber’s 2012 Mack- UM has new stem cell line Revstone not in the clear Judge Allan Gropper of U.S. Ⅲ The University of Michi- inac Policy Conference. Revstone Industries LLC, Bankruptcy Court ruled. gan’s board of regents ap- The science is a collection of discarded Since October, 45 suits al- proved naming the univer- arduous,“ time consuming auto supplier divisions leging a price-fixing con- sity’s new $23.2 million OBITUARIES and expensive. But put together by spiracy among manufactur- basketball administration eventually, (stem cell) industrialist George ers of wire harnesses have and practice building after Ⅲ Laura Anne Geist, a use in research is going Hofmeister, eluded near been filed and have been the late Bill Davidson, a UM writer and journalist who to change the world. collapse this week after had worked for Automotive Maybe not my world. consolidated into U.S. Dis- alumnus who owned the De- it closed on new trict Court in the Eastern troit Pistons. The William News, died Feb. 10. She was Maybe my financing. But the simple District of Michigan. Davidson Foundation donated 50. grandson’s. truth is that Revstone is Ⅲ in trouble. Ⅲ The Livonia Planning $7.5 million to the Michi- Jeff Zaslow, renowned ” Commission has recommend- gan athletic department, author and husband of WJBK- Reporter Tom Henderson’s blog about accounting, Reporter Dustin Walsh’s blog on auto suppliers, steel, ed approval of a rezoning re- prompting the naming. Channel 2 reporter Sherry banking, venture capital and high tech can be found higher ed and Livingston and Washtenaw counties can quest from Eau Claire, Wis.- Ⅲ Robert Beyster, 87, a Margolis, died in a car acci- at www.crainsdetroit.com/henderson be found at www.crainsdetroit.com/walsh based Menard Inc. for 46 Michigan native and dent Feb. 10. He was 53. DBpageAD.qxp 2/10/2012 9:22 AM Page 1 DBpageAD.qxp 2/13/2012 10:26 AM Page 1 BUSINESS CAN’T WAIT

TO CONNECT TO THE CLOUD.

PC Mag has named Comcast Business Class the fastest business Internet provider in the nation. It offers download speeds up to 66 times faster than DSL and T1. Plus, you’ll get productivity tools such as NortonTM Business Suite and Web hosting options along with a dedicated local customer service team ready to help you 24/7. Switch to Comcast Business Class.

Go to business.comcast.com or Call 800.391.3000

Restrictions apply. Not available in all areas. Speed comparison between Comcast 100Mbps service and standard 1.5 DSL or T1 (downloads only). Actual speeds vary and are not guaranteed. 2011 rating by PC Mag based on review of customer data from www.speedtest.net. Call for details. Comcast © 2012. All rights reserved.