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labusinessjournal.com LOS ANGELES BUSINESS JOURNAL Volume 33, Number 25 THE COMMUNITY OF BUSINESSTM June 20 - 26, 2011 • $3.00 Up SPECIAL REPORT BANKING AND FINANCE Painful Breakup Front In Development REAL ESTATE: Will partners’ split cost Casden properties?

By ALFRED LEE Staff Reporter

A dispute with a longtime partner has brought billionaire residential developer Alan Casden to the brink Local firm cap- of foreclosure on six properties, including his prized tured time on a Palazzo mixed-used complex in Westwood Village. bottle with its Lenders led by Comerica Bank say that Casden has caps that say been missing payments since November and have filed when to take foreclosure lawsuits on the six properties, including your pill. PAGE 3 development sites in Los Angeles and Ventura counties. Representatives of Casden, whose privately held Casden Properties LLC is one of the region’s largest News & apartment builders, blame the missed payments not on financial troubles but on a dispute with Cerberus Part- Analysis ners LP, a division of New York private-equity firm

Please see REAL ESTATE page 55

Prepaid Card King OneWest headquarters in Pasadena.

Why Scott Gray’s RINGO H.W. CHIU/LABJ Draws a Big Rival patience with San Pedro’s PROFITS FINANCIAL: American Express parking meters Since early 2009 has expired. a threat to Green Dot’s top spot. PAGE 5 MONEY OneWest: $2.48 By RICHARD CLOUGH Staff Reporter Energy billion Suddenly rising competition in the prepaid debit card MACHINE market could leave Green Dot Corp. feeling blue. The Monrovia company is the nation’s top issuer ONEWEST BANK has made more in profit than all of the reloadable cards, but new pressure from one of other local banks combined in the two years since it All other L.A. County the largest financial firms in the United States could arose from the failed IndyMac Bank. Why? Because banks and thrifts threaten Green Dot’s position. of a lopsided deal handed to it by the FDIC, which combined: New York-based American Express Co. $186 million announced last week the launch of a prepaid debit expects to lose $10 billion as a result. This special card with much lower fees. It is the first of what could report examines how L.A.’s biggest failure was be many large financial companies to enter the transformed into a spectacular money machine for nascent but fast-growing market. the wealthy and influential buyers. “If you’re Green Dot and you wake up and read Hal Washburn is that American Express is introducing a prepaid debit buying oil fields BEGINNING ON PAGE 17 Source: FDIC anywhere but Please see FINANCIAL page 54 California. PAGE 10 Trade Group’s HQ Plan Draws Static MAIL TO: But Saul Levine, owner of Mt. Wilson Broad- RADIO: Some station owners casters and country music station KKGO-FM rip move-in with media giant. (105.1), believes that housing the trade group in the offices of a giant media conglomerate would com- By JOEL RUSSELL Staff Reporter promise its integrity and independence. He has formed an alliance with about six other local station When Mary Beth Garber left as president of the owners to fight the proposal. Southern California Broadcasters Association in “The SCBA must be restored to its independent April, the organization’s board wanted to restructure status and not be an arm of any station or station – a decision that set in motion a battle over the group,” he said. “It must have its own offices, apart future of the radio trade group. from any station or group.” The board discussed moving the association into Levine, a longtime critic of giant station groups offices provided by Katz Media Group, the sub- in the radio industry, noted that SCBA has decided

sidiary of Clear Channel Communications that RINGO H.W. CHIU/LABJ hired Garber away from the association. Please see RADIO page 53 Ex-SCBA: Mary Beth Garber at Katz’s L.A. office. 2-Page Spread Single Page View Thumbnails | LABJ User Guide | Front Page | Table of Content Previous Page Zoom In Zoom Out Next Page

2 LOS ANGELES BUSINESS JOURNAL JUNE 20, 2011

LOS ANGELES BUSINESS JOURNAL ®

JUNE 20 - 26, 2011 VOLUME 33, NUMBER 25

FREEanywhere DELIVERY in Downtown LA!

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RINGO H.W. CHIU/LABJ Page 6: Founder Jake Winebaum at Brighter.com’s Santa Monica office. HEALTH CARE – Jake Winebaum’s (213)TICKETS SPECIAL REPORT: company named Brighter hopes to link the (842-5387) BANKING & FINANCE uninsured with dental deals...... 6 QUARTERLY ENTERTAINMENT – Video game maker GROWTH – OneWest investors are Magic Pixel is aiming for console players reaping billions from the bones of despite the growing mobile device niche. . .7 IndyMac thanks to unusually generous PUBLISHING – Energy drink maker Red terms from the FDIC, which is on the Bull is pouring its efforts into a new magazine hook to help cover many of the busted to promote the brand...... 8 thrift’s loans...... 17 SPORTS – Manhattan Beach has courted LENDING – OneWest homes in on a USA Volleyball and a marketing firm to help business model that downplays mortgage revive the city’s pro open...... 8 loans...... 26 ENERGY – BreitBurn’s chief says California AL BROOKS TICKETS CHARTS – Quarterly banking data.28-29 lawmakers’ thirst for oil taxes spurred him to THEATRE • CONCERTS • SPORTS expand operations out of state...... 10 900 Wilshire Boulevard, Los Angeles, California 90017 Columns & features – Media Watch 10, ON THE COVER www.albrooks.com Health Care & Biotech 12, Banking & FINANCIAL – Analysts expect American Finance 12, News of the Week 14 Express to swipe more than a little business from prepaid debit card leader Green Dot. THE LIST RADIO – A proposal to headquarter a trade RANKING – The 20 largest foreign group in a media conglomerate’s office has companies with U.S. headquarters in Los generated bad buzz with some independent Angeles County, ranked by parent company station owners. revenue...... 15 REAL ESTATE – Six local properties including Westwood’s Palazzo are at the INVESTMENTS & FINANCE center of bad breakup between billionaire Alan Casden and a partner. Columns & features – LABJ Stock Index 46, Econowatch 48 UP FRONT REAL ESTATE DINING – Self-ordering eatery Stacked thinks it will be better served focusing on food and Columns & features – Real Estate not games...... 3 Column 48 HEALTH CARE – A Thousand Oaks company has captured time on a bottle with L.A. BIZ SEEN its caps that track when to take pills...... 3 INVESTMENT – Criterion Capital is giving CELEBRATIONS – Photos from L.A. business community events...... 56 investors something to chew on with its pickup of 10 Fatburgers...... 3 Columns & features – Page 3, COMMENTARY Regional Report 4 COMMENT – The notion that more restaurants may put touch screens on tabletops is NEWS & ANALYSIS causing heartburn for Charles Crumpley. .58 POLITICS – Joel Fox thinks L.A. voters will GOVERNMENT – San Pedro and have to make a close call if businessmen Wilmington merchants are hoping to drive off Austin Beutner and Rick Caruso run for parking meters after business plunged in the mayor...... 59 wake of a 2009 rate hike...... 5 ECONOMY – President Obama’s choices for APPAREL – The popularity of rivals’ his jobs panel just don’t work for Bill wide-leg denim lines have thinned out profits Gunderson...... 59 for skinny-focused Joe’s Jeans...... 5 Columns & features – LABJ Forum 58

Los Angeles Business Journal (ISSN 0194-2603) is published weekly. © 2011, Los Angeles Business Journal. Offices are located at 5700 Wilshire Blvd., Suite 170, Los Angeles, CA 90036. Periodicals postage paid at Los Angeles, CA and additional offices (USPS #492-930). Subscription prices: 51 issues and special issue, $99.95. For new and renewal subscriptions, call 1-800-404-5225. All other inquiries (323) 549-5225. Single copies, $3.00. Mailed copies, $5.00. Back issues, $8.00. Address and subscription inquiries to: Circulation Department, Los Angeles Business Jour- nal, 5700 Wilshire Blvd. Suite 170, Los Angeles, CA 90036. This newspaper is designed to inform decision-making executives, investors and managers on the trends, the growth and the ideas important to commerce and industry in Los Angeles County. Information in Los Angeles Business Journal is gathered from sources considered to be reliable, but the accuracy of this information cannot be guaranteed. Neither that information nor any opinion which may be expressed here constitutes a solicitation for the purchase or sale of any securities. Opinions expressed in letters to the editor and commentaries are those of the authors and not necessarily those of Los Angeles Business Journal. Member Audit Bureau of Circulations. LABJ has been adjudicated Nov. 1985 to be a newspaper of general circulation. POSTMASTER: Send address changes to Los Angeles Business Journal, PO Box 16825, North Hollywood, CA 91615. 2-Page Spread Single Page View Thumbnails | LABJ User Guide | Front Page | Table of Content Previous Page Zoom In Zoom Out Next Page

JUNE 20, 2011 UP FRONT LOS ANGELES BUSINESS JOURNAL 3

tion to bring in new customers. Blowing “It’s cheap enough to be The Lid Off given away. It’s profitable because the retailers experi- Innovation ence an increase in prescrip- tions,” Burke said. Company’s bottle caps At $3.50 each, Burke’s cap help patients know is a lower-cost but lower-tech alternative to GlowCap, devel- when to take pills. oped by L.A.-based Vitality For patients prone to for- Inc., which sells for $99. getfulness, technology is GlowCap, which uses a Wi-Fi replacing the string around RX Timer Cap connection, social media and the finger. ring tones to alert patients that Richard Burke Jr., chief Bartell Drugs chain, before it’s time to take their meds, is executive of RX Timer Cap, unrolling nationwide later this owned by L.A. billionaire thinks his custom pill bottle cap year. RX Timer will also start Patrick Soon-Shiong. can help keep people on their selling to pharmacies on the Proponents of smart caps medication schedule. The trick? company’s website in July. say they can reduce long-term Each time the cap is popped, a The company recently raised health-care costs by preventing timer resets to zero. If you look $1 million in venture capital. patient negligence and over- back exactly four hours later, RX Timer launched in doses. But the smart cap field the cap’s timer will display 2009 after Burke sold a nutri- is too new for these claims to RINGO H.W. CHIU/LABJ “04:00,” so you know how long tional supplements company. be backed up by research. Screen Saver?: Stacked’s Paul Motenko with order tablet at the Torrance eatery. ago you took your last dose. A friend of his had heard a “There isn’t a lot of good The Thousand Oaks com- talk by the cap’s inventor, and evidence that they increase pany, which has eight Burke bought the patent, smit- compliance over a long period Adding plish both of those objec- that, with a touch of a screen, employees, spent last year ten by the a-ha factor. of time,” said Geoffrey Joyce, tives,” Motenko said. can be ordered and cus- working out manufacturing But instead of selling the an expert in health-care eco- The Right They plan to roll out loca- tomized with a variety of top- problems, and the caps are caps retail, as was the inventor’s nomics at the USC School of tions in San Diego and Cerri- pings and sauces. Diners can now being tested at pharma- plan, Burke decided to take Pharmacy. “We can only infer Touch? tos in the coming months. save the past meals they’ve cies in Washington state, them wholesale to chains such that there are costs savings Such concepts have been ordered on the iPads. They where Burke made his first as CVS and Costco, which and benefits downstream.” Self-ordering eatery tried before, often without can also preorder meals distribution deal with the could use the caps as a promo- – Jonathan Polakoff Stacked puts its focus much success. For example, online and then punch in a on food not games. Atari founder Nolan Bush- code at the restaurant so it nell’s uWink bistro chain knows that they have arrived. Levin doesn’t see it that way. Fatburger is considered a Will another restaurant allowed diners to order meals With iPad service, fewer Beefing Up “Whether it’s in new higher-end fast-food concept concept centered on comput- from table-top touch-screen waiters can tend to a greater The Menu media or quick-service restau- because it offers fresher ingre- erized orders stack up better computers and then play number of customers – and rants, we look for solid invest- dients at slightly higher prices. than previous attempts? games on them. Restaurants the restaurant saves about one- Beverly Hills firm adds ments,” Levin said. Levin said all At Torrance eatery Stacked: were opened in Woodland third of its labor costs. Waiters 10 Fatburgers to its Actually, Levin 10 of the Fatburg- Food Well Built, diners order Hills and at the Hollywood & are still needed to serve meals, investment portfolio. had been looking ers were profitable and pay for their meals on table- Highland complex, but by last refill drinks and check to for a way into the before the bank- top iPads – although servers are year they had closed. make sure that the hamburger Meet a local investor who restaurant business ruptcy. available for the electronically But at Stacked, Motenko is medium rare or a pizza has moved from high tech to for two years. Criterion, challenged. said the dining experience is tastes good, for example. high fat: Adam Levin, manag- When he saw the which had three Paul Motenko and Jerry focused on the food, not the But do customers lose ing partner of Beverly Hills- Fatburger fran- Papa John’s pizza Hennessy, co-founders of the computer screen. some of the human touch? based merchant bank Criteri- chises for sale, he franchises before BJ’s Restaurant and Brew- “We don’t have gaming,” “I’m afraid you are going on Capital Partners. scooped them up the Fatburger deal, house chain, developed the Motenko said. “UWink was to lose the social interaction He led Criterion’s pur- for $1.5 million. wants to buy 50 idea of using iPads for their about social gaming. You that you go to a restaurant chase of social network The previous Levin restaurant loca- new venture in an effort to were across from someone, for,” said Jerry Prendergast, Bebo.com from AOL for franchisee, Fat- tions by the end of provide customers with quick but the computer was almost of Culver City restaurant con- $880 million last June. Earlier burger Restaurants of Califor- the year. service in a sit-down restau- grabbing you and saying, sultancy Prendergast & this year, he led the purchase nia Inc., a subsidiary of Santa Lately, he has been mak- rant atmosphere. ‘Hey, look at me, don’t look Associates. of 10 Fatburger franchises Monica-based Fatburger ing the rounds of the restau- “If we had a way for our at the person you are having Motenko said guests are from Palm Springs to Wood- Corp., filed for Chapter 11 in rants even while working on guests to order at their table dinner with.’ ” tipping an average of 15 per- land Hills, including six in 2009 after defaulting on new investment deals. and at their pace from a Stacked, which opened at cent. “That’s the strongest Los Angeles County. loans. Twenty-six locations in “My job doesn’t allow me device, which would then the Del Amo Fashion Center signal that they are feeling It may seem there’s a huge California and Nevada were to flip burgers on a daily directly communicate with last month, serves burgers, they are being well serviced.” difference between social auctioned off as part of bank- basis, though,” he said. the kitchen, we could accom- pizzas, salads and sausages – Alexa Hyland media and hamburgers, but ruptcy proceedings. – Jonathan Polakoff

Sailing on Downtown’s Waters When Joel Miller vacationed across the pond So, does Miller also have his sites set on win- national award. As a several years ago, he returned with the most PAGE 3 ning this year’s race? result, he got a trip to unlikely of souvenirs: a paper boat race. “I’m not good at arts and crafts. It takes me Washington, D.C., and Miller, head of the planning and entitlements CHARLES CRUMPLEY three minutes to make my paper yacht and I even a tour of the White team at the Psomas don’t win,” he said. “But my yacht has never House. engineering firm in sunk.” Levin said one of downtown Los Angeles, you construct them well enough. So instead of his company’s banks visited friends in Tat- making it an endurance contest, it’s a race.” Surprise Honor nominated him because tingstone, England, in But finding a location for the race wasn’t Barry Levin might start double-checking Snak King persevered 2008 and noticed a tro- easy. before throwing out junk mail from now on. through tough times a phy for the town’s Miller, 60, asked several downtown buildings if The chief executive of City of Industry food few years ago when its annual paper yacht he could use their pools, but they asked for thou- manufacturer Snak King Corp. recently learned Levin factory roof caved in. race. He asked about sands of dollars to rent the bodies of water. So he through a letter in the mail that he was named Levin and his workers the prize and was so approached Psomas’ landlord, Thomas Properties Small-Business Person of the Year in Los Ange- rebuilt the business “almost from scratch.” inspired that he decided Group, about staging the race in the fountain of les by the U.S. Small Business Administration. What else does Snak King’s bank appreciate Miller to start a paper boat downtown’s City National Plaza building. Thinking it was just junk mail, though, he almost so much about it? race sponsored by Pso- Thomas Properties agreed to let Miller use tossed it. “The fact we pay our bills,” Levin said. mas – but with a few tweaks. the fountain for free and now, the fourth annual “It was very shocking going through my “Each year, they float their paper boats in the Psomas Paper Yacht Challenge is being staged mail,” said Levin, 53, who was feted for his Staff reporters Alexa Hyland and Richard Clough lake, and the boat that is the last to sink is the one there Wednesday. Miller is hoping to raise accomplishment at a luncheon this month. contributed to this column. Page 3 is compiled that wins the trophy,” Miller said. “But I didn’t $10,000 from entry fees and a silent auction for He also was named California Small-Business by Editor Charles Crumpley. He can be reached at know that boats will float for hours and hours if the Los Angeles Ronald McDonald House. Person of the Year and was nominated for the [email protected]. 2-Page Spread Single Page View Thumbnails | LABJ User Guide | Front Page | Table of Content Previous Page Zoom In Zoom Out Next Page

4 LOS ANGELES BUSINESS JOURNAL UP FRONT JUNE 20, 2011

News and notes from communities across REGIONAL REPORT Los Angeles County

CENTRAL AREA CENTURY CITY

Boxed Up: OpenGate Capital LLC, a DOWNTOWN LOS ANGELES Century City private equity firm, has bought two U.S. subsidiaries that make boxboard Acquisition and Order: Aecom Tech- from Montreal’s Cascades Inc. Cascades nology Corp., a downtown L.A.-based engi- Boxboard Group-Connecticut LLC is a paper neering company, has purchased Spectral Ser- mill facility in Versailles, Conn., and Cas- vices Consultants Pte. Ltd., a Noida, India- cades Boxboard US Inc. is a converting facil- based buildings services consultancy. Financial ity in Hebron, Ky. They had combined rev- terms of the deal were not disclosed. enue of more than $100 million last year. Financial terms of the deal were not dis- Brokerage Pickup: Wedbush Inc., a closed. downtown L.A.-based investment firm, has acquired Lime Brokerage LLC, a New York- based trading technology and services company. Financial terms of the deal were not disclosed. Regional Report SAN FERNANDO VALLEY To be considered for publication, Regional Report submissions should be e-mailed to: [email protected] VAN NUYS Business news from companies in Los Ange- les County or nearby areas is listed on the Stroke Certification: Van Nuys’ Valley Van Nuys: Valley Presbyterian Hospital has earned stroke center certification. page. Please be sure that press releases Presbyterian Hospital has earned certification specify the name of the city and the name of as a primary stroke center by the Joint Com- the company along with the description of mission, an Oakbrook Terrace, Ill.-based non- SOUTH BAY WESTSIDE the news. Submissions are evaluated on the profit that accredits and certifies medical orga- basis of company size and the significance of nizations and programs. the announcement. The Business Journal COMPTON WESTCHESTER tries to include as many listings as possible, CANOGA PARK Medical Testing: DxTerity Diagnostics Fund Launch: Del Rey Global Investors but some may not be published due to space Inc., a Compton maker of genomic testing LLC, a Westchester asset management firm limitations. Taking Shots: Divine Shots technology, has acquired intellectual property with a focus on international equities, is Please address all inquiries to the e-mail Photography, a provider of studio and loca- rights to several blood-based cancer tests from launching its first mutual fund, the Del Rey address above. If you do not receive a tion photo services with a focus on portraiture, Boulder, Colo.’s SourceMDx Inc. Included in Monarch Fund. The fund will be managed by response in a timely manner, has opened in Canoga Park. The studio is at the tests are early diagnosis for breast and lung Paul J. Hechmer, who will be looking for call (323) 549-5225, ext. 229. 9025 Eton Ave., Suite C. cancer. undervalued foreign stocks. 2-Page Spread Single Page View Thumbnails | LABJ User Guide | Front Page | Table of Content Previous Page Zoom In Zoom Out Next Page

JUNE 20, 2011 NEWS&ANALYSIS LOS ANGELES BUSINESS JOURNAL 5

areas of Los Angeles, the rates are now as high as $2 per hour. The budget also extended the metered hours well into the evening, with vary- ing times in different parts of the city. In San Pedro, hours were extended to 9 p.m. The backlash from merchants when the rates took effect in 2009 was immediate. Hahn quickly introduced a motion to roll back meter hours to 6 p.m. in San Pedro and Wilmington. She also helped set up a free-parking period for two weeks before Christmas and reduced the price for monthly parking permits for store employees. But the problem persisted. “The complaints started coming in after the quadrupling of the rates and they haven’t let up since,” said Dan Hoffman, executive director of the Wilmington Chamber of Commerce. Matters got worse because the city’s Depart- ment of Transportation took a more aggressive approach to parking meter enforcement. “People would come into our store and shop, and when they get back to their car after an hour, they see a $70 ticket on their window,” said John Foto, owner of Wilmington’s Santa Fe Seconds store, which sells discount and used goods. “Once they get a ticket, many don’t ever come back.” Foto said the aggressive enforcement has prompted him to remind his customers con- stantly to make sure they have enough money RINGO H.W. CHIU/LABJ in the meter and that they get back five min- Parking Drive: Maritime Research Center’s Scott Gray holding an anti-parking meter pamphlet in San Pedro. utes before their time is set to expire to make sure they don’t get a ticket. He said the meters in Wilmington have not been upgraded to accept credit or debit cards, so customers often have to ask him for change when they come into his store, then run back Curbing Business? out to feed the meter. “Needless to say, all this does not exactly build customer loyalty,” he said.

GOVERNMENT: Merchants in San Pedro and Increasing turnover The parking meters in question were first Wilmington look to ax parking meters. installed decades ago in San Pedro, Wilming- ton and many other areas of the city with the By HOWARD FINE Staff Reporter several other strategies to boost business in of San Pedro and Wilmington. The two shop- goal of allowing more turnover in parking for those areas – including free parking on ping areas near the Port of Los Angeles have customers. The city of Los Angeles collects the HEN parking meter rates in down- evenings and weekends, and during a two- been stuck in a long-term decline as residents meter money, which pays for parking improve- town San Pedro quadrupled two week stretch before the Christmas holiday – have flocked to nearby malls and chain stores. ments, including the installation of parking W years ago to $1 an hour, Scott all to little effect. A few years back, San Pedro boosters had meters that accept credit and debit cards. Gray’s maritime crafts and book business “This is the last resort begun to reverse the tide, heav- But in San Pedro and Wilmington, the plunged 25 percent and within six months had after I’ve tried about 10 LABJ POLL ily promoting the local arts number of people using the parking meters has fallen by two-thirds. things to turn this area scene and backing mixed-use dropped so dramatically since the 2009 rate His business has yet to recover. around,” she said. Credit card parking meters: projects to bring residents into increase that Hahn said that the citywide park- “People visit us once and then never come The City Council has asked Convenient or too expensive? downtown. But the recession ing revenue fund is subsidizing the mainte- back because of the parking,” he said. the Department of Transporta- labusinessjournal.com hammered the region. Some nance and operation of the parking meters in Gray, who owns Maritime Research Center tion to report back within 30 stores have shuttered, others the two neighborhoods. on Seventh Street, and fellow merchants have per- days on the feasibility of remov- have fewer and fewer sales. The meters, she said, should be transferred suaded Los Angeles City Councilwoman Janice ing the meters; the proposal could come back to The parking meter rate increase was part of to other parts of the city where they would Hahn, who represents the area, to try to pull down the council for a final vote later this summer. the 2008 city budget. Hahn voted for the budget, generate revenue instead of diminish it. several thousand parking meters in downtown The call to remove parking meters represents which doubled or quadrupled rates throughout The proposal has won widespread support San Pedro and nearby downtown Wilmington. the latest effort by Hahn and other city officials much of the city. In San Pedro and Wilmington, Hahn last week said that she has tried to help the struggling central business districts rates rose from 25 cents an hour to $1; in other Please see GOVERNMENT page 54 Wide Legs Put Squeeze on Premium Denim Maker APPAREL: percent from last June’s 52-week high of $2.30. But in an April conference call, Chief Execu- Skinny focus of The slumping stock led Nasdaq to warn the Joe’s Jeans Inc. (Nasdaq: JOEZ) tive Marc Crossman acknowledged that a decline company that it was in danger of being delisted Commerce FRI. CLOSE, PAST 5 WKS in its jeggings business dragged first quarter sales Joe’s Jeans proves a poor 0.95 because its stock has been selling for less than $1 CEO: Marc Crossman June 15: $0.76 0.90 down 9 percent to $21.3 million. However, he fit as fashion shifts. a share for 30 consecutive trading days. The com- Employees: 154 0.85 added, sales began to pick up after the company 0.80 pany has until Dec. 5 to maintain a closing price at Market Cap: $50 million made changes to its spring lineup, introducing By ALEXA HYLAND Staff Reporter $1 a share for at least 10 consecutive trading days. 0.75 updated styles such as the skinny microflare jean P/E: 25 0.70 The company disclosed the warning June 10. 0.65 that plays into the wide-leg trend. What’s the skinny on premium denim The latest earnings, reported two months EPS: $0.03 8/13 5/20 5/27 6/3 6/10 Nationally, less expensive jeans are selling maker Joe’s Jeans Inc.? ago, showed the company’s first quarter sales *Twelve months trailing. Source: Yahoo Finance slightly better than a year ago, but high-end denim The Commerce apparel company found suc- had declined and net income dropped 73 per- sales are down, according to Port Washington, cess with its skinny jeans such as jeggings – cent from the previous year. when its shares traded for little more than a quar- N.Y., market research firm NPD Group Inc. jeans that fit and look like leggings. But the $158 David Griffith, senior research analyst at ter. And the company’s predecessor, Innovo In response to the challenges in this envi- tapered-leg jeans have become a fashion victim. Newport Beach investment banking firm Roth Group, was warned of a possible delisting in June ronment, Joe’s Jeans is updating styles for its Joe’s Jeans was slow to slip into the trend Capital Partners LLC, who follows Joe’s 2006, when shares hovered around 75 cents. fall lineup and opening more retail stores in the of wide-leg jeans that shoppers, particularly Jeans and rates the company’s stock “neutral,” Joe’s Jeans regained compliance after both United States and abroad. those who are still spending upward of $150 a said the company has recognized its missteps. warnings, and the company hit its stride last year Crossman is counting on the company’s pair, now prefer. What’s more, sales for premi- “They said, ‘We had a tough spring, we didn’t with then-stylish skinny jeans and other items design power to help boost sales. um denim remain flat as more consumers get the merchandise exactly right.’ And it’s certain- such as nondenim pants, basic T-shirts and but- “For fall 2010, we’ve built on this momentum switch to less expensive blue jeans. ly a tough environment for denim,” Griffith said. ton-down shirts. It also began opening retail from spring by placing more focus on fashion-for- As a result, the company’s stock has been slip- Joe’s Jeans has faced Nasdaq delisting warn- stores at high-profile locations such as the newly ward trends and silhouettes as well as fabric inno- ping. Shares closed at 76 cents June 15, down 67 ings before. In September 2009, a warning came remodeled Santa Monica Place shopping mall. vation,” Crossman said in the April conference call. 2-Page Spread Single Page View Thumbnails | LABJ User Guide | Front Page | Table of Content Previous Page Zoom In Zoom Out Next Page

6 LOS ANGELES BUSINESS JOURNAL NEWS & ANALYSIS JUNE 20, 2011 Dental Website Looks to Link Uninsured With Deals checkups, for about $64 com- Cal also eliminated its dental benefits in HEALTH CARE: Brighter pared with the typical cost of 2009. hopes to shine up crowded $156. A person who wants to “Dental plans are more prevalent in get the discount then signs up the individual market because they can industry tainted by fraud. for a membership. offer you something that looks like Brighter makes money by insurance but that’s cheaper,” Pourat By NATALIE JARVEY Staff Reporter charging its annual member- said. “But the discount might not be ship fee. enough, depending on your income, to HEN Jake Winebaum found out his John Meyers, a partner at really remove that price barrier.” retired father-in-law paid more Ervin Cohen & Jessup LLP But the popularity of discount health W than $6,000 for three crowns at the in the firm’s health care law and dental plans has also led to a number dentist because he wasn’t insured, he decided department, said Brighter dis- of fraud cases. The California Depart- to use his technology and business back- counts could be more benefi- ment of Managed Health Care started ground to make it easier for people like his cial for someone who needs investigating these plans in 2005 after father-in-law to find affordable dental care. lots of expensive dental work consumers logged complaints that some Winebaum, an L.A. entrepreneur, has than for someone just looking plans pretended to be insurance launched Brighter.com, which combines den- for a checkup. providers, overstated benefits, promised tist-finding services, discounts for members “You have to look at how access to doctors who hadn’t agreed to and online recommendations. expensive the procedure nor- give discounts or didn’t offer any sav-

“The amount of money that people are spend- mally costs and how much it RINGO H.W. CHIU/LABJ ings at all. Since then, the department ing out of pocket on dental care is significant,” he costs with the discount and Smile: Winebaum at screen showing Brighter’s site. has ordered a number of plans to cease said. “Those folks spent that money with no the Brighter fee,” he said. “You and desist until they change their advertis- knowledge of what procedures should cost.” might, as an informed consumer, say that it’s Winebaum previously founded Business.com, ing and business practices. The Santa Monica startup has a database of worth it.” a web directory and business search engine The department requires all plans operating in dentists nationwide who have agreed to offer Brighter launched last month with more that he sold for $345 million, and California to register and obtain a license, but won’t Brighter members discounted rates on services than 25,000 dentists across the country on eCompanies, a tech incubator that helped fund investigate a plan unless a customer has made a for- such as a yearly checkup or cavity filling. board. The company paid for access to the net- LowerMyBills.com and launch Boingo Wire- mal complaint, according to a spokeswoman. Typically, dentists charge insurance compa- work of Careington International Corp., a less Inc. He’s drawn on his tech background Winebaum said he chose Careington nies discounted rates when their patients visit. Frisco, Texas, company that negotiates dis- with Brighter, which fuses Yelp recommenda- because it has a proven track record and seeks But uninsured patients are billed top price. counted rates with dentists for groups such as tions with pricing information to show cus- to comply with all state regulations. In addi- Brighter charges a $79 annual membership trade associations or unions. tomers the top dentists in their area. tion, Brighter’s website has a lengthy state- fee to give people access to the same rates – up to But there are already dozens of companies ment at the bottom of each page explaining 60 percent off a procedure – that insurance Health care options that offer discounts on health care and dental that its memberships are not the same as an providers are charged. It’s also offering a small- Brighter is part of a growing number of care to the uninsured. insurance membership. business plan that costs $49 a year per employee. startups aimed at making health care more Website DentalPlans.com shows more than As long as discount plans are upfront with No businesses have signed up, but about 30 com- affordable. Seattle’s Qliance charges a mem- 10 discount dental plans with dentists in the customers, they shouldn’t run into legal issues, panies have been testing the service for Brighter. bership fee for access to its small group of L.A. area, and major health insurers Aetna said Ervin Jessup & Cohen’s Meyers. Brighter works like this: Anyone can search physicians and doesn’t require insurance. One Inc. and UnitedHealth Group also operate “I don’t see anything inherently wrong with for a dentist on the website for free. A search for Medical Group in San Francisco offers pri- programs that offer discount services. the idea that somebody can aggregate buying a Santa Monica dentist offering discounts on an mary care for an annual membership fee and Nadereh Pourat, director of research at the power and then force discounts,” he said. “The adult checkup, for example, shows a list of near- accepts insurance from a number of providers. UCLA Center for Health Policy Research, said issue was about companies misrepresenting by dentists offering the best deals. The website Brighter, however, works more like a tech- discount plans have become attractive options themselves as an insurer. That doesn’t seem to then shows which dentists will give discount nology startup than a health care company. as employers have cut dental benefits. Medi- be the case here.”

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JUNE 20, 2011 NEWS & ANALYSIS LOS ANGELES BUSINESS JOURNAL 7 Video Game Maker Shoots for the Console Player ENTERTAINMENT: But “When you virtually or E3, held earlier this throw a ball, we can cap- month at the Los Angeles can Magic Pixel thrive ture spin, velocity and Convention Center. The angle,” he said. “You motion-controlled games in new mobile climate? have more control so the that garnered the most atten- game is made more tion from fans and industry By NATALIE JARVEY Staff Reporter accessible to you.” insiders were titles aimed at Casual games surged in the audience of core gamers Mark Tsai and his team have worked popularity when Nintendo that prefer to play shoot- together to create games for some of the indus- introduced the Wii and ’em-up games instead of try’s biggest publishers, including THQ Inc. games for the device such rolling or throwing virtual and Electronic Arts Inc. Now they’ve as bowling and tennis. But balls. launched their own L.A. studio. some of that audience has Hickey pointed out that Magic Pixel Games in Westchester is abandoned consoles for some games for the casual about to launch its first game. The company games on their mobile Game On: A scene from Magic Pixel’s upcoming ‘Carnival Island’ game. market at E3 showed signs adopted a focus on games for motion-con- phones and iPads. of success. trolled devices for “casual gamers” – those “A couple of years ago, there wasn’t that industry has said maybe we need to refocus on And Tsai is confident that Magic Pixel’s who enjoy an occasional round of Wii bowl- sort of opportunity to play mobile casual the core gamer experience.” family-friendly games will still find an audience. ing, for example, as opposed to the core audi- games,” said Mike Hickey, an analyst with That was evident at the industry’s annual “We feel like there’s a good-sized market ence of gamers who prefer titles such as “Call Janco Partners in Denver. “The video game conference, the Electronic Entertainment Expo, for these more casual games still,” he said. of Duty.” But casual games seem to be moving quickly off traditional consoles and on to mobile devices. “The market (for casual games) is huge, but it’s not on the consoles anymore,” said Michael Pachter, an analyst with downtown L.A.’s Wed- There’s Simply More Health Care bush Securities. “It’s migrating away from the consoles to the smart Options with Our Dual Network Offering phones and iPad.” The industry veter- ans at Magic Pixel, however, believe SimpleS for your employees, simply more for your company there’s still a market for their games. And YourY employees get any number of tailored network plans, plus up to they’ve got the backing of industry giant fourfo new, full network HMO plans. The right solution at every turn. Tsai Sony behind them. The company has To ﬁnd out how Health Net makes health care work for you and received funding from Sony to release its first your employees, contact your Health Net representative or broker. game, “Carnival Island,” exclusively for the PlayStation Move, a motion-controller used with Or visit www.healthnet.com. the PlayStation 3. Magic Pixel will work with Sony to publish and distribute the game and is collaborating with Sony’s Santa Monica studio for “Carnival Island’s” holiday release. “Having access to the first-party folks is helpful when it’s a new technology,” Tsai said. “That’s something we’ve taken full advantage of. They’ve been a good partner to us.” But Tsai hasn’t ruled out working on future games for other motion-controlled devices, including Microsoft’s Kinect and Nintendo’s Wii. Pachter said the company’s publishing agreement with Sony should help it sell games. “A publisher gives you marketing expertise,” he said. “They know how to advertise your game.” But the company will need to move beyond Sony, too. “Making anything exclusive for Move is pretty limiting,” Pachter said. “Magic Pixel will probably be lucky to capture 5 percent of that market. That’s not exactly a big deal.”

Work history The Magic Pixel team began working together at Helixe, a now-disbanded THQ studio in Boston, where they developed Nintendo games based on Pixar and Nickelodeon charac- ters. They then moved to EA’s office in Playa Vista, where they worked on motion technology research for the Kinect. But the entire team was laid off as part of the gaming giant’s staff cuts. So last year they decided to open their own studio. “We decided to see if we could preserve that working relationship and continue to build interesting and really accessible experiences custom-tailored to each platform,” Tsai said. ChristianChhristian Aparicio, The company, which has 23 employees, chose to stay focused on creating games for HeHealthealth NetNet motion-controlled devices and continue mak- HHelpinge your ing family-friendly titles that appeal to a demo- ememployees navigate graphic of more casual gamers who aren’t like- thetheir plan options. ly to play a first-person-shooter title. Motion-controlled games are attractive to people with little gaming experience, because Health Net is a registered service mark of Health Net, Inc. © 2011 Health Net of California, Inc. All rights reserved. they simulate real-life actions, Tsai said. 2-Page Spread Single Page View Thumbnails | LABJ User Guide | Front Page | Table of Content Previous Page Zoom In Zoom Out Next Page

8 LOS ANGELES BUSINESS JOURNAL NEWS & ANALYSIS JUNE 20, 2011 Drink Maker Takes a Can-Do Attitude to Magazine PUBLISHING: by Red Bull Media House North America. The and circulation standpoint even if they have the erate revenue from content in lifestyle, culture Red Bull company’s media division was founded in capital. The sophisticated reader might dismiss and sports,” said Werner Brell, managing turns to print to pump up 2007 and operates separately from the energy branded content as purely advertising.” director of Red Bull Media House North drink business. The magazine offers The drink maker’s publishing America. “We have a long-term commitment the company’s brand. plenty of pictures of and features on division has a staff of hundreds to grow the magazine business and aggressive- Red Bull’s 100 sponsored athletes, THE LIST of journalists and photographers ly build a subscriber base, strong single-copy By DAVID NUSBAUM Staff Reporter but also runs original articles U.S. Headquarters of worldwide who produce TV, sales and an iPad app.” designed to appeal to its core demo- Foreign Companies film, print, mobile and digital Red Bull, which ranks No. 13 on the Busi- According to its advertising slogan, the graphic audience of males 15-34. PAGES 15-16 products. For example, Media ness Journal’s list of U.S. headquarters of for- energy drink Red Bull has wings. But it has a Subjects include travel tips, work- House will produce 30 hours of eign companies, is privately held and would magazine, too. out advice and even recipes. Never- television for major networks in not disclose the American magazine’s startup The magazine now has a total circulation of theless, the magazines are marketing vehicles North America this year. costs or whether it intends to make the maga- 4.6 million worldwide in 10 countries with last designed to sell energy drinks. Its tagline is “An The American edition of Red Bulletin will zine a standalone profitable venture. month’s launch of the U.S. version of the com- almost independent monthly magazine.” be available on more than 20,000 newsstands Outside advertisers pay as much as $44,900 pany’s Red Bulletin by Red Bull USA in But isn’t this the age of the print-killing nationwide for $4.99 or by subscription for for a full-page color advertisement, according Santa Monica. The local subsidiary of Fuschl Internet? $12 a year. It will also be inserted in Sunday to the company’s rate sheet. Rates for the full am See, Austria-based energy drink manufac- “Any magazine launching in this economy is editions of major newspapers such as the Los international package are $119,000 for a full- turer Red Bull GmbH said it will distribute tough,” said Carla Blanco, publisher and co- Angeles Times, Chicago Tribune, New York color page. Other countries in the international 1.2 million copies in the United States. founder of Westlake Village-based 3Digit Media Daily News and Miami Herald. package include Great Britain, Germany, Aus- The 100-page branded monthly is produced LLC. “It’s a difficult market from an advertising “Like any media company, we seek to gen- tria, South Africa and New Zealand. Manhattan Beach

Reserve Wants Volleyball Your Table Back in Rotation or Seat Today! SPORTS: Marketing firm and Olympics group are tapped to revive open.

By JONATHAN POLAKOFF Staff Reporter

Wednesday, June 29, 2011 Manhattan Beach hopes it can get the “Wimbledon of beach volleyball” over the net 11:00am – 1:30pm • Millennium Biltmore Hotel • Individual Tickets $95 | Tables of 10 $800 this year – so it brought in some help. The City Council has enlisted New York- The Los Angeles Business Journal is proud to present a tribute to the nonprofits of Los Angeles. We based marketing firm IMG and USA Volley- honor those professionals and organizations that continue to make a positive impact on the community ball, the sport’s Olympics-sanctioning body, to and do so under difficult financial constraints. Equally as important are the efforts of the corporations give an assist in staging the 2011 Manhattan supporting these nonprofits. Many corporate executives volunteer time on boards and lend support Beach Open in August. through financial donations and sponsorships. These awards recognize both equally important groups. The Association of Volleyball Profession- als Tour had run the event since 1984. But when the AVP shut down a week before the August 2010 Manhattan Beach Open, USA Please join us as we honor our 2011 Awards Finalists: Volleyball and the city scrambled to put together a last-minute version of the tourna- NONPROFIT AWARDS CORPORATE CITIZENSHIP AWARDS ment. With just $25,000 in prize money, com- Organization of the Year - Small Corporate Partner of the Year pared with $250,000 the prior year, the match Food on Foot Hasbro Studios failed to attract big-name competitors. Minds Matter of Los Angeles STAPLES Center Foundation Last fall, a City Council committee The Trevor Project Toyota Motor Sales, USA, Inc. approached IMG and USA Volleyball about Organization of the Year - Medium Leadership Excellence running this year’s event. One condition was a Barlow Respiratory Hospital David Elson, Manatt Phelps & Phillips minimum of $200,000 prize money, paid by Downtown Women’s Center Lyndon Faulkner, Pelican Products USA Volleyball and IMG. The two producing Society of St. Vincent de Paul, Council of Los Angeles John Gutierrez, El Arca, Inc. partners will share with the city any revenue Organization of the Year - Large Volunteer beyond the break-even point. Goodwill Southern California Mark & Shirley Ballas Sponsored naming rights to the event will Tobinworld Jim & Marcia Brammer, State of the Art Images - also change. Last year’s event was supposed to Union Rescue Mission Photography by Jim Brammer be called “AVP Nivea Tour Manhattan Beach Jack Wagner Open,” but when AVP went under, the Nivea Leadership Excellence Nancy Aossey, International Medical Corps Corporate Social Responsibility money went away. This year, the sponsor, Robbie Gluckson, Premiere Oncology Foundation Mattel, Inc. which has yet to be named, will be listed after Vivian Seigel, JVS Sony Pictures Entertainment the event title, as “presented by.” But compa- Warner Bros. Entertainment nies don’t pay as much for that. Nonprofi t Team “It’s a tougher economic model for us and LA’s Prom Closet In-Kind Supporter Los Angeles Neighborhood Land Trust Daisy Rock Girl Guitars IMG because they take away the event title National Kidney Foundation Los Angeles Chapter Team Goodyear Tire & Rubber Co. sponsorship and require us to pay a minimum of Michael E. Walton prize money,” said Dave Williams, managing Project Collaboration director of beach volleyball for USA Volleyball. Children Youth and Family Collaborative - Educational Pilot Project The goal is to restore the event to its former Communities in Schools of Los Angeles & City Year Los Angeles JVS’ BankWork$ stature. In the past, it had been televised on NBC and drew crowds numbering as high as 60,000. Social Enterprise After the 2008 Olympics, the network did not Abode Communities renew the contract. Last year, the tournament Girls Scouts of Los Angeles was shown online and on cable channel Ion. Tobinworld “We have to look at a bigger (broadcasting) partner,” Williams said. “NBC is a natural PRESENTING SPONSORS: PLATINUM SPONSOR: GOLD SPONSOR: For more information or to attend, please visit since they’re an Olympic broadcaster and www.labusinessjournal.com/bizevents we’re an Olympic partner.” United Way of or call 323.549.5225 Spectators will have free admission to the Greater Los Angeles 64-team open-style tournament, which will take place the last weekend of August. The event will be part of a three-stop minitour presented by IMG and USA Volleyball. 2-Page Spread Single Page View Thumbnails | LABJ User Guide | Front Page | Table of Content Previous Page Zoom In Zoom Out Next Page

JUNE 20, 2011 LOS ANGELES BUSINESS JOURNAL 9

Save up to $10,000 on SBA fees (up to 1% of loan amount) on select loans.2 Chase is proud to be the nation’s #1 SBA lender,3 and right now we’re offering big savings on new SBA loans and lines of credit. Plus, we’ve made an even bigger commitment this year - we’ll lend $12 billion to small businesses in 2011. But hurry, this fee-waiver offer ends August 31.

See a Business Banker at your Chase branch today.

1. Applicable to SBA Express loans up to $150,000. Not applicable if multiple SBA loans are approved or have been approved within the last 90 days totaling more than $150,000.

2. Chase business checking account required to be eligible for fee waiver offer. Offer not available with any other promotions. Application must be submitted by August 31, 2011 and booked by November 30, 2011. Stated Maturity Lines of Credit, Renewable Lines of Credit, and Chase Auto Finance SBA loans are not eligible for this offer. Fee waiver will be credited at the time of closing of SBA loan or line of credit. Minimum loan amount is $10,000. Term of SBA loan or line of credit must be greater than 36 months. Chase origination and other fees may apply, and may vary based on the type and term of the loan. For SBA 504 loans, this offer only applies to closing costs, including appraisal and environmental fees, but not attorneys fees, related to Chase’s senior/permanent loan and shall be limited to lesser of one percent of Chase’s senior/permanent loan up to $10,000 or the actual amount of the closing costs. All extensions of credit are subject to credit approval by JPMorgan Chase Bank, N.A.

3. Based on number of approved SBA loans from 10/1/10 through 3/31/11, as reported by the U.S. Small Business Association.

© 2011 JPMorgan Chase Bank, N.A. Member FDIC. Equal Opportunity Lender. 2-Page Spread Single Page View Thumbnails | LABJ User Guide | Front Page | Table of Content Previous Page Zoom In Zoom Out Next Page

10 LOS ANGELES BUSINESS JOURNAL NEWS & ANALYSIS JUNE 20, 2011

MEDIAWATCH

MOVIE BOX OFFICE Weekend Gross Total Gross Rank Title (millions) (millions) Distributor 1 Super 8 $35.5 $36.5 Paramount 2 X-Men: First Class 24.1 98.0 20th Century Fox 3 Hangover Part 2 17.7 215.7 Warner Bros. 4 Kung Fu Panda 2 16.5 126.8 Paramount 5 Pirates: On Stranger Tides 10.9 208.9 Disney 6 Bridesmaids 10.1 123.8 Universal 7 Judy Moody 6.1 6.1 Relativity 8 Midnight in Paris 5.8 13.9 Sony 9 Thor 2.4 173.7 Paramount

10 Fast Five 1.7 205.1 Universal RINGO H.W. CHIU/LABJ Weekend ended June 12 Source: Bloomberg News Tapping Out: Chief Executive Halbert Washburn at BreitBurn’s Sawtelle Facility. PRIMETIME TV SHOWS Rank Program Network Rating* 1 NBA Finals (Dallas vs. Miami) ABC 13.3 Oil Company No Longer 2 NBA Trophy Presentation ABC 12.3 3 NBA Finals (Miami vs. Dallas, Thurs.) ABC 10.8 4 NBA Finals (Miami vs. Dallas, Tues.) ABC 9.6 5 America's Got Talent (Tues.) NBC 7.4 Digs Tax Talk in California Week ended June 12 *Each rating point equals 1.1 million homes. Source: Bloomberg News ENERGY: brara County in eastern Wyoming, the compa- BreitBurn opts ny jumped. BreitBurn already has operations in CABLE TV SHOWS to boost business outside the Big Horn basin in central Wyoming and Rank Program Network Rating* the Wind River basin in western Wyoming. 1 Pawn Stars (Mon., 10:30 p.m.) History 4.5 state with Wyoming deal. “We are a company that grows by acquisi- 2 (tie) iCarly: iParty Nickelodeon 4.2 tion, taking existing oil-producing fields and 2 (tie) Pawn Stars (Mon., 10 p.m.) History 4.2 By HOWARD FINE Staff Reporter using our technology to get more oil out of 4 American Pickers History 3.4 them,” Washburn said. “And right now, if we’re 5 Sprint Cup Racing TNT 3.2 When downtown L.A.-based BreitBurn Ener- looking at two equivalent oil-producing fields in Week ended June 12 *Each rating point equals 1.1 million homes. gy Partners LP bought an oil field in Wyoming California and Wyoming, we will choose Source: Bloomberg News for nearly $60 million last week, it wasn’t just a Wyoming every time because of the environ- TOP SELLING ALBUMS move to capitalize on rising fuel prices. ment in California. We are voting with our feet, The main driving force was to shift its taking potential investment out of California.” Rank Last Week Artist Title Label resources outside of California to escape the Washburn said terms of the $58.1 million 1 New Lady Gaga Born This Way Interscope Records constant threat of oil severance taxes and the purchase agreement announced last week pre- 2 3 Adele 21 Columbia state’s burdensome regulatory environment. vented him from identifying the seller, but did 3 New Death Cab for Cutie Codes and Keys Atlantic “We feel that we as an industry have a big reveal that it is an oil-producing company. 4 New Eddie Vedder Ukulele Songs Universal Motown target painted on our backs in California,” said “They felt they had done as much with the Records Group Halbert Washburn, BreitBurn’s chief execu- field as they could and that this was the right 5 New My Morning Jacket Circuital ATO Records tive. “Wyoming is a much more stable busi- time for them to sell,” he said. Week ended June 17 Source: Billboard.com ness environment.” Analysts viewed the Wyoming purchase as MOVIE RENTALS - DVD/VHS a shrewd move. The oil field produces about Breitburn Energy (Nasdaq: BBEP) 500 barrels of oil a day and is likely to continue Rank Last Week Title Distributor Partners L.P. producing. Also, one analyst said it should help 1 1 I Am Number Four Disney Los Angeles FRI. CLOSE, PAST 5 WKS balance BreitBurn’s reserves between oil and 2 2 Mechanic Sony 22.0 CEO: Hal Washburn 21.5 gas; about 65 percent of the proved reserves of 3 New Drive Angry Summit June 15: $19.37 Employees: 379 21.0 the company’s properties are natural gas. 4 3 Gnomeo & Juliet Disney 20.5 “A nice aspect of this deal is that it should Market Cap: $1.14 billion 5 5 Roommate Sony 20.0 help balance out the portfolio,” said Bernard 19.5 Week ended June 5 Source: Rentrak P/E*: N/A 19.0 Colson, equity analyst with Oppenheimer & EPS: -$2.08 6/10 6/3 5/27 5/20 5/13 Co. in Kansas City, Mo. (Oppenheimer’s DVD SALES *Twelve months trailing. Source: Yahoo Finance investment banking division receives compen- Rank Last Week Title Distributor Suggested Retail sation from BreitBurn.) 1 New True Blood: Third Season Warner Bros. $59.99 Washburn said that the company has con- 2 1 Gnomeo & Juliet Disney 29.99 sidered oil field acquisitions in California Shareholder sells 3 2 I Am Number Four Disney 29.99 recently, but has either passed on them or not In a separate development last week, the 4 New Drive Angry Summit 26.99 bid as aggressively. He cited numerous ballot largest investor in BreitBurn, Fort Worth, 5 3 Mechanic Sony 28.95 proposals in recent years both locally and Texas-based oil and gas developer Quicksilver Week ended June 5 Source: Rentrak statewide to tax oil as companies draw it out of Resources Inc., sold about half its stake in the the ground in what’s called severance taxes. company in a secondary offering that initially MOVIELINK DOWNLOADS Voters rejected a statewide ballot proposal raised about $100 million. Rank Title Distributor Suggested Retail in 2006 that would have imposed a 6 percent For Quicksilver, the public offering was part 1 Just Go With It Sony $15.95 severance tax to raise money for alternative of a long-announced strategy to sell its BreitBurn 2 True Grit Paramount 15.95 energy projects. Oil companies poured in near- holdings. The goal was to raise cash for debt 3 Sanctum Universal 15.95 ly $80 million to defeat the measure. payment and capital investments in its proper- 4 Green Lantern: Emerald Knights Warner Bros. 15.95 The oil industry has also repeatedly turned ties. The offering reduced Quicksilver’s stake in 5 Hangover Warner Bros. 11.95 back severance tax legislation in Sacramento. Breitburn to about 13 percent from 26 percent. Week ended June 5 Source: Cinemanow.com This past March, voters in Los Angeles reject- Quicksilver had sued BreitBurn in 2009 seek- ed severance taxes in Beverly Hills and Los Ange- ing more control over the company’s operations; OUTTAKE OF THE WEEK les. Had both been enacted, BreitBurn would have the suit was settled last year when BreitBurn been among three companies that would have agreed to pay $13 million and give Quicksilver SCI-FI GUY been double-taxed on oil drawn out of the ground two seats on a reconstituted four-person board. “Star Trek” director-writer in Beverly Hills. That’s because the companies’ oil Immediately after Quicksilver’s announcement J.J. Abrams, left, has wells are just outside the city in neighboring Los of the offering, the unit price of Breitburn fell 6 per- another hit on his hands Angeles but slant underneath Beverly Hills. cent to $19.43, although some of that drop could be with the 1979-set monster- Washburn was one of the leaders in the attributed to an overall market slide that day. from-outer-space film campaigns against both local oil severance tax BreitBurn Chief Executive Washburn said “Super 8.” Some in the measures. That experience helped convince the Quicksilver sale should be favorable news industry had questioned if him that California was no longer as attractive a for investors, noting that Quicksilver’s the Paramount release with place to invest in oil fields. Another factor was announcement that it intended to sell its huge a no-name cast could hold AB 32, the greenhouse gas reduction bill enact- stake cast a shadow on BreitBurn’s share price. its own among big-budget ed in 2006 that’s expected to require the oil “There it was, this huge block of shares that summer sequels and industry to make extensive and costly changes could hit the market at any time,” Washburn comic-book blockbusters. to their operations over the next decade. said. “An investor looking at that could reason- So, when the opportunity arose for Breit- ably conclude: ‘Why buy today when I can get a Burn to bid on an oil producing field in Nio- lower price when those shares hit the market?’” 2-Page Spread Single Page View Thumbnails | LABJ User Guide | Front Page | Table of Content Previous Page Zoom In Zoom Out Next Page

JUNE 20, 2011 LOS ANGELES BUSINESS JOURNAL 11

The Android-powered phone for those in the business of taking care of business. Introducing the Motorola XPRT ™ Worldphone from Sprint. With an array of business forms, enhanced security features, plus a touchscreen, QWERTY keypad and Android™ OS, it’s the ultimate phone for getting the job done—on the go and around the world. Only from Sprint.

$ 99 sprint.com/smallbiz 129. Limited time: Motorola XPRT 1-8-SPRINTBIZ Available to corporate-liable accounts. May require a two-year Agreement per line. For your business. 1-877-746-8249 Or visit any Sprint Store.

May require up to a $36 activation fee/line, credit approval and deposit. Up to a $200 early termination fee/line applies. Offer ends 9/10/11 or while supplies last. Taxes and service charges are excluded. No cash back. Available to corporate-liable accounts only. Requires activation at the time of purchase. Upgrade: Existing customers in good standing with service on the same device for more than 22 consecutive months currently activated on a service plan of $39.99 or higher may be eligible. See in-store rebate form or sprint.com/upgrade for details. International coverage available on CDMA (EV-DO Rev. A) and GSM/UMTS (HSPA) networks. Additional carrier fees may be required. Other Terms: Coverage is not available everywhere. The Nationwide Sprint Network reaches over 278 million people. The Sprint 4G Network reaches over 70 markets and counting, on select devices. The Sprint 3G Network reaches over 274 million people. See sprint.com for details. Offers are not available in all markets/retail locations or for all phones/networks. Pricing, offer terms, fees and features may vary for existing customers not eligible for upgrade. Other restrictions apply. See store or sprint.com for details. Android, Google and other marks are trademarks of Google Inc. 2-Page Spread Single Page View Thumbnails | LABJ User Guide | Front Page | Table of Content Previous Page Zoom In Zoom Out Next Page

12 LOS ANGELES BUSINESS JOURNAL NEWS & ANALYSIS JUNE 20, 2011 TV Shopping Pitch Works Out for Fitness Trainer

EXERCISE: Valerie Waters’ HEALTH ValSlide device makes a CARE & strong debut on QVC. BIOTECH DEBORAH ELEBRITY fitness trainer Valerie Waters said she went into her recent QVC CROWE C shopping network debut with eyes wide open, fingers crossed and more than dou- not need,” said Yuan, who was the original go- ble her usual inventory of ValSlides. to cosmetic surgeon on the ABC show The West L.A. entrepreneur developed her “Extreme Makeover.” “I wanted to write a book ValSlide device – 2-foot shaped pieces of more about philosophy and decision-making, slick, padded plastic – as an alternative to and less something that would market my prac- bulky slide boards for performing lunges, tice, which the rep on my first book wanted.” abdominal planks and other gym exercises. A Yuan took advantage of Seattle e-com- package that includes the device, workout mence giant Amazon.com’s vanity publishing video and accessories normally would sell for unit, CreateSpace. The division offers editing more than $35, but was promotionally priced and consulting services, Amazon site market- nearly $10 cheaper for the June 7 airing. ing and the ability to keep inventory costs low “It’s kind of like a casino, in that you have by printing a book practically on demand. to play by their rules and all the odds are Yuan said the freedom and control was worth stacked in their favor – but the payout is poten- the additional work and costs. (CreateSpace tially huge,” said Waters of the shopping net- sometimes gets criticized for taking too large a work. “You do it because you can get 10 mil- Valerie Waters at QVC studios, above. cut from an author’s profits.) lion eyeballs on your product and introduce the Dr. Yuan at book signing, right. “I realized after the stock market crash and ValSlide to a much wider audience. I had to recession that the traditional book publishing take that chance.” Waters not only sold most of the product Surgeon Self-Publishes business was crumbling, and you’d do just as Waters leveraged her success in preparing she had shipped to QVC’s fulfillment ware- After his frustrating experience at getting well using social networking and other means actresses such as Jennifer Garner, Rachel house months earlier, but also obtained his first book promoted several years ago, Bev- to build an audience,” he said. “Unless you’re Nichols and Poppy Montgomery for big roles detailed metrics and feedback on which por- erly Hills cosmetic surgeon Dr. Robin Yuan already a known author, a traditional book to get her QVC shot. But it also took a year tions of her presentation generated the most decided the second time around he’d take publisher isn’t going to spend a lot of time and and contracting with a broker who specializes sales. She also was able to add hundreds of advantage of the latest technology in self-pub- money marketing your book anyway. I might in getting inventors on the channel. prospects to her mailing list in advance of lishing. as well do it myself.” After getting an OK from the network and Tuesday’s launch of her latest Bikini Body Yuan’s new book, “Behind the Mask, Yuan also hired Beverly Hills’ Asbury PR waiting to be scheduled, Waters more than Express workout routine product. Beneath the Glitter: The Deeper Truths About Agency to help him promote “Behind the doubled her usual equipment order to her “I waited for months, but as it turned out Safe, Smart Cosmetic Surgery,” isn’t a paean Mask,” which last week ranked No. 856,575 contract manufacturer and, at the network’s the timing was just about perfect,” Waters said. to the benefits of going under the knife. In fact, on Amazon’s best-seller list. His first book, insistence, reshot the DVD workout included “I’ve actually had a lot of experience demon- Yuan is notorious among his colleagues for “Cheer Up ... You’re Only Half Dead: Reflec- in the package. She also had to make multiple strating the ValSlide on TV, but I got a lot of chasing potential patients away if they are con- tions at Mid-Life,” stands at No. 4,353,772 on trips to the network’s studios in Philadelphia, coaching that’s going to help in the future to templating surgery for what he considers the Amazon. including mandatory attendance at a boot build my business.” wrong reasons. camp, dubbed “QVC School,” which helps Waters, who continues to have a presence “People often don’t know what will make Staff reporter Deborah Crowe can be reached first-time presenters become more at ease on QVC’s online shopping site, declined to them happy, and get talked into spending thou- [email protected] or at (323) doing TV demos. release specific sales figures. sands of dollars on procedures they really may 549-5225, ext. 232. Koreatown Institution’s Capital Idea Falls Apart INVESTMENT: required under new rules going into effect Hanmi had BANKING & next month. “Lime has long been viewed as a technolo- hoped to sell a stake to FINANCE gy leader by the high-frequency trading com- South Korean company. munity and is a perfect complement to our RICHARD market-leading, high-volume clearing opera- HEN Hanmi Bank announced last CLOUGH tions,” said Wedbush President Eric Wedbush week that it had ended its tentative in a statement. “We are especially excited W agreement to sell a majority stake to about the enhanced technology capabilities a South Korean financial conglomerate, the The other large Korean-American banks are Lime’s outstanding engineering team will move threw its future – and that of the local in a state of flux, but Gladue said they could be bring to our entire firm.” Korean-American banking industry – into interested in merging with Hanmi once things Wedbush has been uncertain territory. settle down. Koreatown’s Nara Bancorp Inc. on a growth spurt over Analysts say the subsidiary of Koreatown’s and Center Financial Corp. are in the process the last few years as it Hanmi Financial Corp. will likely need to of merging, which will create the nation’s has tried to take advan- raise additional capital in the near future to be largest Korean-American bank, while Wilshire tage of market disloca- able to resolve lingering problems in its loan Bancorp Inc. is contending with unexpected tion. It has hired a portfolio. challenges in its loan portfolio. number of people away “They’re not in urgent need of capital, but “If (Hanmi is) still having capital issues a from larger investment their capital cushion is not very large either,” year from now … I would suspect either one banks and completed said Joseph Gladue, an analyst with West L.A. of the two remaining main Korean-American several acquisitions, investment bank B. Riley & Co. “It would banks would be interested in looking at it,” including the 2009 pur- probably be a good course for them to add he said. Wedbush chase of Pacific more.” HQ: Hanmi on Wilshire Boulevard. Growth Equities LLC. Hanmi had a total risk-based capital ratio of Brokerage Buy 13 percent at the end of the first quarter, above into “well-capitalized” territory. Wedbush Inc., the financial services firm C-Suite News the 10 percent level required by regulators to After the dissolution of the securities pur- in downtown Los Angeles, last week acquired Professional Business Bank, a business be considered “well-capitalized.” Still, prob- chase agreement with Woori, the two compa- Lime Brokerage LLC, which specializes in lender headquartered in Pasadena, has named lem loans make up as much as 7 percent of its nies agreed to a “business alliance” through high-frequency trading and brokerage services. James Jones chairman. … David Misch, total loan portfolio. which they will cooperate on business matters, Wedbush, co-founded by Edward Wedbush chief executive of L.A.’s Private Bank of Cali- Hanmi had been set to complete a $240 including expanding trade finance activities. in 1955, is the top liquidity provider for Nasdaq fornia, has been elected to the board of the Cal- million stock sale to Woori Finance Holdings “The business alliance between Hanmi and stock exchange trades. The firm said it will keep ifornia Bankers Association. … B. Riley & Co. Ltd., but had failed to receive regulatory Woori, which is one of Korea’s largest finan- Lime employees at Lime’s Waltham, Mass.; Co. has hired Richard Eckert as a senior approval since it was first announced in May cial institutions, should benefit both parties in New York; and Jersey City, N.J., offices, and it research analyst. 2010. The transaction required approval from our mutual efforts to expand our ongoing busi- plans to expand the company’s operations. U.S. and South Korean regulators. ness relationship,” said Hanmi Chief Executive The acquisition will give Wedbush tech- Staff reporter Richard Clough can be reached Hanmi, which had been required to boost Jay S. Yoo in a statement. nology including automated risk filters, which at [email protected] or at (323) its capital levels, raised more than $120 million Executives did not respond to requests for are designed to ensure that securities trades 549-5225, ext. 251. after the announcement, which brought it back additional comment. meet applicable regulations and will be 2-Page Spread Single Page View Thumbnails | LABJ User Guide | Front Page | Table of Content Previous Page Zoom In Zoom Out Next Page

JUNE 20, 2011 LOS ANGELES BUSINESS JOURNAL 13 ACG LOS ANGELES 2011 BUSINESS CONFERENCE GROWTH STRATEGIES | M&A | FINANCE

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14 LOS ANGELES BUSINESS JOURNAL NEWS & ANALYSIS JUNE 20, 2011

Last week’s major news from labusinessjournal.com NEWS OF THE WEEK and other sources SETTLEMENT: ACES HIGH: SPACEX CONTACT: KB Home Krane Pacific Equity Partners according to Beverly Hills- Federated and two other homebuilders since 2005. The deal, terms based Kennedy Wilson, Sports + Gaming acquired Space Exploration Tech- involved in a failed residential of which were not disclosed, which did not identify the Heartland Poker Tour, which nologies Corp., a project in suburban Las Vegas separates 178 owned or fran- properties to protect the sell- bills itself as the leading Hawthorne rocket have agreed to pay lenders chised Sizzler locations in the er’s identity. The remaining “grassroots” poker tour and maker, signed a large launch more than $250 million to set- United States from about 100 new equity owners are one of the largest independent contract with Thai communi- tle litigation. The project, restaurants overseas that Kennedy Wilson Real producers of poker content on cations company Thaicom Inspirada, was envisioned as a Pacific Equity will continue Estate Fund IV, Fairfax television. Federated Sports is Inc. to lift a 7,000-pound 14,500-home master-planned to control. The new owner- Financial and LeFrak Orga- headquartered in Washington satellite into orbit. SpaceX community on 2,000 acres in ship team includes Chief nization. The acquisition adds D.C. but its main operations expects to launch the 2004. J.P. Morgan Chase, return for steering media Executive Kerry Kramp, who about 700,000 square feet to are in Los Angeles. The com- Thaicom 6 satellite in the among about 50 lenders that mogul Haim Saban into an took over in 2008, and former the company’s more than 50 pany did not disclose terms of second quarter of 2013 from provided the South Edge illegal tax shelter. The shelter chief executive Kevin million-square-foot portfolio. the deal. Heartland Poker, Cape Canaveral, Fla. The LLC joint venture $585 mil- allowed Saban to evade taxes Perkins, who will serve as based in Fargo, N.D., is now satellite will be built by lion, later forced the venture on capital gains of $1.5 billion nonexecutive chairman. SOUTH PARK DEAL: In a filming its seventh season, Orbital Sciences Corp. of into involuntary bankruptcy. he made after selling his inter- major win for the L.A.-based primarily at Indian casinos. It Dulles, Va. Financial terms KB Home, which owns 48 est in the Fox Family Channel PORT TRADE: Traffic at streaming video site, Hulu has is syndicated to more than were not disclosed. percent of the joint venture, in 2001. Krane agreed to for- the ports of Los Angeles and signed a deal to show episodes 100 million U.S. homes each will pay most of the settle- feit $23.1 million to the U.S. Long Beach remained rela- of the hit animated TV series week, as well as markets EARNINGS: Korn/Ferry ment, which it expects to be Treasury in back taxes and tively flat last month. Los throughout Europe, the Mid- International reported fiscal between $216 million and return $17.9 million in illegal Angeles handled 360,969 dle East and the Caribbean. It fourth quarter net income of $240 million. In return, it will fees to Saban. Saban has import containers in May, up was founded in 2005 by $20.3 million, 128 percent get a 65 percent to 68 percent pledged the money to philan- 5.5 percent from a year earli- entrepreneurs Todd Anderson higher than a year earlier. stake in the underlying land thropic causes. er. Long Beach had 275,100 and Greg Lang. Operations Revenue rose 16 percent to for a future development. import containers in May, a 4 will remain in North Dakota. nearly $206 million. … BACK HOME: Sizzler USA percent increase. Exports at RealD Inc. reported fiscal SENTENCING: L.A. tax has been acquired in a man- Los Angeles were relatively ACQUISITION: Gores fourth quarter net income of attorney Matthew Krane, who agement buyout that will strong at 15 percent growth, Group LLC is acquiring $4.5 million, compared with a pleaded guilty to tax evasion return the casual restaurant but were down 6.1 percent at nearly all of the assets of net loss of $20.9 million a and passport fraud in 2009, chain headquarters to Culver the Long Beach facility. Port Scovill Fasteners, a bank- year earlier. Revenue rose 6 has been sentenced to 32 City, where it was founded in officials say the slower rupt maker of closure prod- percent to $58.5 million. … months in prison for taking a 1958. Sizzler’s worldwide growth may continue for the ucts for apparel and industri- Cherokee Inc. reported first $36 million kickback federal operations were owned by rest of the year since 2010 “South Park” on its paid-access al uses. Billionaire Alec quarter net income of $3.3 prosecutors say he received in Australian private-equity firm was a particularly strong year. Hulu Plus site. Subscribers will Gores’ L.A. investment com- million, 14 percent higher have access to the 15 earlier pany said the U.S. Bankrupt- than a year earlier. Revenue L.A. INVESTMENT: Real seasons of the show, and will cy Court for the District of fell 16 percent to $6.9 million. labusinessjournal.com estate investment company be able to view current season Delaware approved the trans- … Capstone Turbine Corp. The best source for up to the minute local, national and Kennedy Wilson paid more episodes 21 days after they air action June 10. Terms were reported a fiscal 2010 net loss worldwide business news. than $143 million to acquire a on Comedy Central. Hulu is a not disclosed. Scovill is of $38.5 million, 58 percent FREE MORNING UPDATE 37 percent stake in a portfolio joint venture that includes headquartered in smaller than the previous of five L.A.-area office build- NBC Universal, Fox Enter- Clarkesville, Ga., and has year. Annual revenue rose 33 Prepared by the editors of the Los Angeles Business Journal and sent to you by e-mail every business day. Sign up now at ings. The buildings are in tainment Group, Disney- made snap-closure buttons percent to $81.9 million. www.labusinessjournal.com Beverly Hills, Miracle Mile, ABE Television Group and for consumer and military Quarterly revenue was not Encino and other submarkets, Providence Equity Partners. clothing since 1802. provided. CALL FOR NOMINATIONS Is your CFO one of the best in Los Angeles?

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Nomination Deadline: Friday, July 29, 2011 PLATINUM SPONSOR: GOLD SPONSORS: Award Categories: Community Bank • Private Company Moss Adams LLP • Public Company Wedbush Bank • Government/Public Sector • Nonprofit For sponsorship information, call your account representative at 323.549.5225 For more information or to nominate, please visit www.labusinessjournal.com/bizevents or call 323.549.5225 6,109 3,503 2,027 2-Page Spread Single Page View Thumbnails | LABJ User Guide | Front Page | Table of Content Previous Page Zoom In Zoom Out Next Page 1,959 1,647 JUNE 20, 2011 LOS ANGELES BUSINESS JOURNAL 15

X NEXT WEEK LARGEST FOREIGN COMPANIES WITH The 25 Largest Retail THE LIST U.S. HEADQUARTERS IN L.A. Centers in L.A. County Ranked by parent company revenue in 2010

X EXECUTIVE SUMMARY X THE TRENDS X THE PACESETTER

HE 20 largest foreign companies ITH revenue topping $107 billion last with U.S. headquarters in Los Many Nations year, Japanese automaker Honda T Angeles County had $450 billion Number of companies, by country, on the list. W Motor Co. Ltd. is the largest foreign in combined revenue last year. That’s up company with U.S. headquarters in Los Ange- $54 billion from the prior year. Japan les County. The company reported a revenue Many companies saw gains for China/Taiwan increase of $15 billion due to a combination of two reasons: Sales increased and the increased sales and changes in the dollar-yen exchange rate led to increased revenue. Switzerland exchange rate. Chinese electric-car manufacturer South Korea Torrance-based American Honda Motor Co. BYD Co. Ltd. was added to this year’s Inc. oversees the company’s U.S. operations. Australia list after it established U.S. headquarters The division oversees production of automobile in Los Angeles. The company gener- Austria brands Honda and Acura as well as motorcycles, ated $7.2 billion in revenue last year Singapore light business jets, marine engines and personal Tetsuo Iwamura worldwide and has started expanding watercraft. outside of Asia. It plans to open offices UK Last year, 87 percent of Honda and Acura vehicles sold in North Ameri- in Europe this year. BYD plans to start 0 2 4 6 8 10 12 ca were produced by domestic factories. North American operations slowed selling cars to the U.S. market next year. after March 11, when an earthquake and tsunami struck Japan. The compa- British supermarket giant Tesco PLC Types of Business ny relies on North American manufacturers for 80 percent of the parts that launched its El Segundo-based Fresh Companies on the list provide a variety of products go into its cars, but supply of the remaining parts was delayed because of & Easy chain in 2008 and has grown and services. the disaster. Honda expects to have production volume back at 100 percent quickly to more than 175 stores. How- Food/Beverage by August for all models except the 2012 Civic, which will still be produced ever, it has yet to turn a profit on the at 50 percent until the fall. venture. It reported a loss of about $250 Electronics The Civic is one of the top 10 selling cars in the United States, but it’s million last year from its U.S. opera- Airlines not as popular in Japan, which has greater demand for smaller vehicles. tions, roughly the same as 2009. Honda recently announced that the Civic will no longer be sold in Japan The Business Journal converts rev- Auto even though it was redesigned for 2012. Meanwhile, the hybrid version will enue to U.S. dollars. As a result, in some Consumer Products be Honda’s first American car with a lithium-ion battery. cases, revenue changes on the list do Honda first started operations in the United States in 1959. It established Pharmaceuticals not match the amounts that companies local research and development operations in North America in 1975. In reported in their currencies. Manufacturing 2007, it established a design studio for Acura in Torrance. The 2010 Acura – David Nusbaum Banking ZDX crossover sports coupe was the first Acura vehicle to be designed and developed locally. 0123 45678 Honda employs approximately 25,000 people in the United States. Source: Business Journal research – David Nusbaum

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16 LOS ANGELES BUSINESS JOURNAL THE LIST JUNE 20, 2011

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SPECIAL REPORT Los Angeles Business Journal • June 20, 2011 BANKING & FINANCE QUARTERLY RINGO H.W. CHIU/LABJ

Market Leader: OneWest headquarters in Pasadena. Money Machine Big-name By RICHARD CLOUGH Staff Reporter

investors have little over two years ago, years to come, without sharing in the spoils. OneWest Bank didn’t “It’s outrageous,” said Bert Ely, a bank consultant in transformed exist. Since then, it has Alexandria, Va., who has been a vocal critic of the the assets of earned more than $2.4 bil- FDIC’s handling of the sale. “The FDIC gave the store lion. That’s more, far more, away on that one.” failed IndyMac than every other local bank. So how did one group of investors turn a money-losing Combined. institution – which was so bad that rival banks passed on into banking And it has done so without much lending, typically acquiring it – into a cash cow virtually overnight? A IN THIS the major profit driver for banks and thrifts. So how has A series of interviews and a review of public docu- powerhouse the Pasadena savings bank pulled it off? ments and financial data conducted by the Business Jour- SECTION: It got the deal – some might say steal – of the finan- nal show that OneWest owes its eye-popping performance OneWest – with cial crisis when a high-powered team of private equity largely to unusually generous terms agreed to by the FDIC. OneWest and hedge fund investors bought the assets of failed The FDIC contends that its hands were tied during a outlines its help from a IndyMac Bank on the cheap from federal regulators and period of dramatic upheaval. One of the largest mort- business plan launched OneWest. gage lenders in the country during the housing boom, sweet deal While no one is contending that the owners have IndyMac failed spectacularly in 2008, leaving the FDIC PAGE 26 done anything untoward or illegal, critics point out that to operate the bank for eight months, with a mountain of from the FDIC. the deal is allowing OneWest’s owners to make billions bad loans to unload just as the economy was cratering. Quarterly of dollars in profits while costing the Federal Deposit But some experts say the FDIC got taken by some of Banking Data Insurance Corp. – and the banking industry that funds it the savviest investors in the world, including financier PAGES 28, 29 – more than $10 billion. George Soros, hedge fund titan John Paulson and bank In fact, due to a generous loss-share agreement, regu- buyout specialist J. Christopher Flowers. lators could be stuck helping the thrift financially for In fact, shortly after the lopsided sale – and reports of

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Continued from page 17 Heavy Hitters The ownership group behind OneWest Bank includes some of the country’s most well-known investors. OneWest’s huge profits – the FDIC cut the discounts on failed-bank assets, eliminated the most generous loss-share provisions and placed restrictions on private-equity buyers that virtually cut them off from future acquisitions. The window for private-equity buyouts of failed banks shut quickly, in other words, but not before OneWest cashed in. Former FDIC Chairman William Isaac said the way the deal worked out shows why the agency typically doesn’t sell failed banks to financial buyers. MICHAEL DELL J. CHRISTOPHER FLOWERS STEVEN MNUCHIN JOHN PAULSON GEORGE SOROS “The FDIC is concerned about people com- MSD Capital LP, J.C. Flowers & Co., Dune Capital Paulson & Co., Soros Fund ing in, getting a great bargain at the bottom of New York New York Management, New York New York Management LLC, New York the market and flipping the institution in a cou- Founder of eponymous Financier and former Gold- Onetime Goldman Sachs Through namesake hedge Controversial philan- ple of years and getting great profits that will computer company, Dell man Sachs partner started chief information officer fund, known as perhaps thropist and donor to liber- embarrass the FDIC,” said Isaac, now a senior has amassed a personal his private equity firm in handled mortgage-backed the world’s top distress al causes and political can- managing director with FTI Consulting Inc., fortune estimated at more 2001 to take advantage of securities for investment investor. Famously made didates. Earned more than based in West Palm Beach, Fla. than $14 billion. Estab- opportunities in the finan- bank before joining hedge billions betting against $14 billion through hedge Steven Mnuchin, a Goldman Sachs alum lished MSD Capital in 1998 cial sector. Known to capi- fund world. Co-founded subprime mortgages and fund investing. Started firm and private equity investor who became to invest personal fortune. talize on distress, Flowers Dune in 2004 to invest in shorting major banks dur- in 1969 and had huge OneWest’s chairman, bristled at the notion that Firm targets public compa- bought and cleaned up real estate; also finances ing financial crisis. Started score shorting British the investors only want to suck profits out of nies and real estate, and bank later known as Shin- films. Mnuchin was known gold fund in 2009. Person- pound during 1992 curren- IndyMac’s old assets and flip the thrift. makes private equity sei. Put in bid for Bear as a major player in Manhat- al fortune estimated at $16 cy crisis. Owns stakes in The only member of the investment group investments in a variety of Stearns in 2008. tan social scene before mov- billion. Not related to for- Ford Motor Co., Hess to agree to an interview, Mnuchin maintained industries. Owns majority ing Southern California to mer Treasury Secretary Corp., Bluefly Inc. that OneWest has a long-term plan to do more stake in Calabasas’ Valley- run OneWest as chairman. Henry Paulson. business lending and expand other divisions Crest Landscape Cos. – Richard Clough such as wealth management. (See sidebar, page 26) He also noted that since its establishment, priority is to expand what was primarily a con- It earned more in fourth quarter 2009 – quartered in the county. OneWest has bought two additional failed sumer bank into a commercial bank. We have a $680 million – than all other banks and thrifts Last year, with a return on assets of 2.9 per- Southern California banks, First Federal Bank very big flow of business in the commercial sec- headquartered in Los Angeles County com- cent, OneWest was the second most profitable of California and La Jolla Bank, which bol- tor, particularly in the last few months.” bined have earned in the two years since depository institution in the United States with stered its local branch network and helped set OneWest began operating. at least $5 billion in assets, according to an it up for the long term. Profit center Even in its worst quarter, last year’s fourth, analysis done for the Business Journal by Char- “We’ve been very busy over the last two OneWest has earned $2.48 billion in profit it recorded net income of $81 million, which lottesville, Va., industry research firm SNL years,” said Mnuchin during a recent interview since it launched in March 2009, and any way accounted for more than one-third of the com- at OneWest’s Pasadena headquarters. “Now our you look at it, the earnings are amazing. bined profits of the 77 banks and thrifts head- Please see page 20 2-Page Spread Single Page View Thumbnails | LABJ User Guide | Front Page | Table of Content Previous Page Zoom In Zoom Out Next Page

JUNE 20, 2011 LOS ANGELES BUSINESS JOURNAL 19

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RINGO H.W. CHIU/LABJ Team Players: From left, Vice Chairman Brian Brooks, Chairman Steven Mnuchin, CEO Joseph Otting and Vice Chairman David Fawer at OneWest headquarters.

it will reimburse 95 percent of losses past that Continued from page 18 point – the latter a stipulation the FDIC has since stopped giving to failed-bank buyers. Financial. A common banking industry metric, The terms of the deal can actually be quite return on assets shows how much profit was lucrative. On bad loans, OneWest, which generated as a percent of loans and other assets. bought many of the loans at 70 percent of par “I’ve never seen a bank earn that kind of value, gets the cash from a foreclosure and is money and in a thrift it’s even harder,” Isaac also reimbursed up to 95 percent of the differ- said. (As a federal savings bank, OneWest falls ence between the original loan value and the in the thrift regulatory). “An average bank foreclosure sale amount. Analysts said that would earn 1 percent on assets; if it’s a phe- means OneWest could actually pocket more nomenal bank, it would be earning 1.5 percent on assets.” According to SNL’s data, OneWest also had a 19.4 percent return on equity, which measures the owners’ rate of return. That number was the third highest in the country. Many healthy banks can brag if they earn more than a 10 percent return on equity. The spectacular numbers stem from OneWest’s unusually good deal. The bulk of its income during the first few quarters of its existence came in the category Gains and Losses on Financial Assets and Lia- Growing Up bilities Carried at Fair Value. According to ana- Key dates in the savings bank’s establishment. lysts, this was likely a matter of paper gains on the assets it bought from the FDIC at a discount. July 11, 2008 IndyMac fails. (The institution is not publicly traded, but all Jan. 2, 2009 Investor group agrees to buy banks and thrifts must submit certain informa- IndyMac assets from FDIC. Larry E. Beard tion to its regulators in quarterly call reports.) March 19, 2009 Acquisition closes; Chief Executive Officer OneWest’s owners acquired IndyMac’s loan OneWest Bank launches. portfolio at a 23 percent discount to the already Dec. 18, 2009 OneWest acquires assets depressed book value. As the market has started The family of Coast Companies has been moving and installing heavy machinery throughout the world for of failed First Federal Bank of California. to rebound, many of the discounted loans have 40 years. Larry E. Beard, Chief Executive Officer, has earned the reputation as the premiere choice when performed better than expected, allowing Feb. 19, 2010 OneWest acquires assets it comes to machinery moving, restoration projects and full plant relocation... such as the relocation of OneWest to recover more on the loans. of failed La Jolla Bank; reveals $1.6 billion Air Force One to the Ronald Reagan Library. Coast provides a full complement of machinery relocation profit in first annual report services, transportation, purchase and sale of machinery, warehousing and construction. In a simplified example, a loan originally worth $100 may have been written down and Oct. 27, 2010 Joseph Otting named chief further discounted, and OneWest purchased it executive. for $60. But if the loan proved sound – which Nov. 11, 2010 OneWest acquires $1.4 was the case for many of the loans – OneWest billion loan portfolio from Citigroup. could sell it for, say, $80, pocketing a 33 percent profit. Source: Staff reports But even if a loan sours, OneWest can still make money. That’s because the OneWest investors entered into a loss-share agreement money than it originally paid the FDIC for the on more than $12 billion of IndyMac’s loans loans – even though the loan was bad. and an additional $8.6 billion of FirstFed’s and Certainly not all the bad loans will be prof- La Jolla’s assets, meaning the FDIC will reim- itable for OneWest, but in theory many could be. burse OneWest’s loan losses past a certain It has yet to receive any payments under its threshold. Such agreements are not unusual, IndyMac or FirstFed loss-share agreements. but analysts said the terms of the IndyMac deal However, OneWest is expected to begin could lead to a further windfall for OneWest. receiving payments soon for legacy IndyMac A Financial Services Company Under the agreement, OneWest must shoul- assets, since it has recognized about 85 percent der the first 20 percent of losses on the portfo- of the losses necessary to trigger payments, lio of covered loans. The FDIC will then cover according to regulatory data. 1-877-4-CBBANK 80 percent of the next 10 percent of losses, and Ely said “mistakes were made” with the Member FDIC (0611) www.cbbank.com 2-Page Spread Single Page View Thumbnails | LABJ User Guide | Front Page | Table of Content Previous Page Zoom In Zoom Out Next Page

JUNE 20, 2011 LOS ANGELES BUSINESS JOURNAL 21

SPECIAL REPORT BANKING & FINANCE QUARTERLY

Top Profits By multiple measures, OneWest Bank is one of the most profitable depository institutions in the country. Built 2010 RETURN ON AVERAGE ASSETS on a U.S. Assets Rank* Institution Headquarters (in billions) ROAA foundation 1 GE Money Bank Draper, Utah $20.5 4.51% 2 OneWest Bank Pasadena 26.7 2.90 of 3 American Express Co. New York 142.9 2.85 4 BankUnited Miami Lakes, Fla. 10.7 1.92 trust 5 Pinnacle Bancorp Central City, Neb. 6.1 1.67 and

2010 RETURN ON AVERAGE EQUITY U.S. Assets stability. Rank* Institution Headquarters (in billions) ROAE 1 American Express Co. New York $142.9 27.54% 2 MidFirst Bank Oklahoma City 10.3 20.73 3 OneWest Bank Pasadena 26.7 19.40 4 FirstBank Holding Co. Lakewood, Colo. 10.9 18.75 5 Scotiabank de Puerto Rico Hato Rey, Puerto Rico 6.7 18.23 *Includes all banks and thrifts with at least $5 billion in assets Source: SNL Financial

loss-share agreement, giving OneWest an over- and is not being replenished given how few ly generous deal. mortgages the bank makes. A OneWest executive, who was not autho- “At the current rate they’re going now, they rized to speak with the media and asked not to won’t have a lot left in five years,” said Guy be named, agreed with the notion that OneWest Cecala, chief executive and publisher at has the FDIC to thank for the bulk of its profits. Bethesda, Md., mortgage research firm Inside “You got it,” the executive said. Mortgage Finance Publications Inc. Since the thrift can profit from bad loans, the Cecala questioned whether executives are agreement has opened OneWest to criticism in interested in bulking up their business lines or online blog posts and viral videos for incentiviz- simply continuing to squeeze profits out of ing the bank to foreclose on homeowners. The legacy assets. FDIC has said the allegations are false, and that “It wasn’t set up as a bank. It was set up as an investment,” he said. “And it’s been a very profitable investment for them.”

Tough time In 2008, IndyMac hardly appeared to be an attractive investment. Shortly before the institution was shuttered by regulators, executives invited a series of pri- ‘It wasn’t set up vate-equity investors to look through its books in the hopes of securing a lifeline. All of the as a bank. It investors passed. The swiftness of IndyMac’s failure, which was set up as was hastened due to a billion-dollar run on the bank, left the FDIC unable to find a buyer prior an investment. to the seizure, as normally happens. Even afterward, though, the government had a difficult time finding interested buyers, in And it’s been a part because the assets included a portfolio full of deteriorating Alt-A mortgages with escalat- very profitable ing interest rates, and a relatively tiny network of 33 far-flung branches. IndyMac’s failure investment also occurred in the midst of the housing bust and on the cusp of the broader financial crisis, for them.’ which likely scared off potential buyers. GUY CECALA, “The thing you have to keep in mind is Inside Mortgage Finance when IndyMac failed,” said Andrew Gray, a Publications Inc. spokesman for the FDIC. “There was no price certainty in the fall of 2008.” The agency, which operated IndyMac in con- servatorship, is not equipped to run banks long term, forcing it to sell even in a down market. Gray added, “The faster you move assets back to the private sector and let them be rehabil- itated, the lower the cost is for the government.” OneWest is required to offer loan modifications The FDIC prefers to sell failed banks whole, before proceeding to foreclosure. which is typically more cost-effective than liqui- Meanwhile, even as it makes few loans, the dating an institution in piecemeal fashion. Case savings bank has been generating sizable in point: Since the FDIC operated the former income simply by servicing the $158 billion IndyMac thrift for months, one former employee mortgage business it inherited from IndyMac. noted, it unloaded a number of new Aeron chairs. Servicers do not own the loans, but earn fees Famous for their ergonomics and design, the Member FDIC for collecting payments on them. chairs retail for more than $700 apiece, but the The acquisition instantly turned OneWest FDIC sold them for pennies on the dollar. into one of the largest mortgage servicers in the The government invited more than 80 par- country. Still, the portfolio has shrunk to $137 www.americanbusinessbank.com billion through normal runoff, analysts noted, Please see page 22 LOS ANGELES | ORANGE COUNTY | INLAND EMPIRE | SAN FERNANDO VALLEY | SOUTH BAY 6,109 6,109 3,503 3,503 2,027 2,027 1,959 1,959 1,647 1,647

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22 LOS ANGELES BUSINESS JOURNAL JUNE 20, 2011

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Above the Mean DO YOU HAVE A Since it opened in 2009, OneWest Bank has been far more profitable than its peers in every quarter. $700

625 (in millions) COMMERCIAL REAL 550 475

400 ESTATE LOAN? 325 250

175 0.3 2 100

-50 REFINANCE Q1’09 Q2’09 Q3’09 Q4’09 Q1’10 Q2’10 Q3’10 Q4’10 Q1’11 OneWest Net Income U.S. Average Net Income* WITH A *Average of all banks and thrifts with at least $1 billion in assets Sources: FDIC, regulatory filings

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scene – Mnuchin ran in exclusive circles and Below market, FIXED interest rate for 20 years. Continued from page 21 had access to significant amounts of capital. “I knew five of the six investors for very long Contact us to learn more and get prequalified today! ties to bid on IndyMac. periods of time – in many cases 20 years,” he said. In order to increase the amount of capital in Prior to starting Dune, Mnuchin headed the market, the FDIC loosened the traditionally SFM Capital Management, an investment strict rules governing private-equity investment firm backed by George Soros. in banks, giving the OneWest group an unex- So Mnuchin put together an investment “This new refinancing program is the most significant pected opening. Once limited to minority plan and assembled a group of financial heavy- change in SBA lending since the start of the recession.” stakes, private-equity firms were suddenly weights that boasted no fewer than four billion- allowed to bid on whole banks. aires. In all, the group included J.C. Flowers - Barbara Morrison, CEO & President,TMC Investors were eager. & Co., a New York private-equity firm “At that time, private equity was looking focused on the financial sector; New York for opportunities to enter the space,” said hedge fund Paulson & Co.; MSD Capital LP, Christian Otteson, a partner at Denver’s Bieg- the New York private investment firm for ing Shapiro & Barber LLP who represents computer mogul Michael Dell and his family; buyers of failed banks. SSP Offshore LLC, an investment fund man- Blackrock, Cerberus Capital Management aged by Soros Fund Management in New LP and Apollo Management LP were among York; Greenwich, Conn.-based private-equity firms that started sniffing around failed banks. firm Stone Point Capital LLC; and an affili- Still, there were questions about the value ate of Silar Advisors LP, a New York invest- of IndyMac. ment firm specializing in distressed assets. “There’s always concern about the true fran- The team had plenty of experience capital- chise value of what you’re getting,” Otteson said. izing on distress. Paulson famously earned bil- What’s more, assembling a viable team was lions through his bets against subprime mort- challenging. gages prior to the housing bust, while Flowers Mnuchin was quick to spot the opportunity collected huge sums in 2000 by rescuing the IndyMac offered, and was in many ways the institution later known as Shinsei Bank. perfect candidate to take it over. “From day one, the investors have all been During his 17-year tenure at Goldman 100 percent supportive of the plan for the bank, Sachs Group Inc., he ran the mortgage-backed the growth opportunities for the bank and have securities business, and later co-founded Dune been instrumentally supportive to what we’re For more information, please contact: Capital Management LP, a private-equity firm building,” Mnuchin said. that initially specialized in real estate. With such big names circling failed banks, reg- A major player in New York’s financial Jacky Kim world – and a fixture of Manhattan’s social Please see page 24 310.621.6117 tmcfinancing.com 2-Page Spread Single Page View Thumbnails | LABJ User Guide | Front Page | Table of Content Previous Page Zoom In Zoom Out Next Page

JUNE 20, 2011 LOS ANGELES BUSINESS JOURNAL 23

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24 LOS ANGELES BUSINESS JOURNAL JUNE 20, 2011

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Continued from page 22 written down yet again. In the end, OneWest acquired IndyMac’s assets for just $13.9 billion. The actual cash outlay from the ownership ulators were wary. Still, they had few alternatives. group, however, was $1.55 billion, which was Despite finding big-bank buyers for a num- injected as new capital. (In bank failures, most ber of failed institutions, including Washington of the acquisition cost is typically offset by the Mutual, which was bought by JPMorgan deposits assumed by the acquirer.) Chase & Co., the FDIC received no interest Mnuchin declined to comment on the deal, from major banks for IndyMac. but outsiders didn’t mince words. Twenty-three groups, primarily from the pri- “It was an idiotic decision on the part of the vate-equity world, submitted initial bids, six bid FDIC to not sell IndyMac to a large banking in the final round and just one – the OneWest entity but to keep it independent,” said Ely, the consortium – bid for the entire institution, which bank consultant. it was awarded at a steep discount. He contrasted the deal with that of Downey When IndyMac failed, it had $31 billion in Savings and Loan, a midsize Newport Beach assets. The FDIC immediately wrote down the thrift that failed in November 2008 and was value of the assets to $23 billion. Under the terms sold to U.S. Bank. The FDIC expects to lose of the sale to OneWest, the FDIC kept a small $1.4 billion on that deal, a fraction of the cost

BLOOMBERG NEWS portion of the least attractive assets and sold at a of IndyMac. Rush: Customers at Pasadena’s IndyMac in July 2008 shortly before its seizure. discount the remaining assets, which had been Ely said IndyMac should have been sold to a big bank with the capital cushion to absorb more losses. “My belief is that had someone like Wells (Fargo) or U.S. Bancorp – a big banking company – if someone like that had purchased Indy- Mac and sold it into its operations, it would have been a much lower loss for the FDIC and therefore the banking industry,” he said. What’s more, the deal included no mecha- nisms by which the FDIC could recover more

‘It was an idiotic decision on the part of the FDIC to not sell IndyMac to a large banking entity but to keep it independent.’ BERT ELY, bank consultant

money if the assets performed better than expected. Now a common feature in failed- bank transactions, “clawback” provisions limit the upside for buyers and allow the agency to recover additional money if the deal turns out to be very good for the buyers. So how did one side lose out so badly while You want a financial ally with a powerful grasp of the national and international marketplace. With Union Bank®, you’ll the other made out so well? Some industry lead- have the expertise and solutions you need to expand your business on a global scale. Our relationship managers can ers believe the regulators were simply unprepared help you streamline operations with everything from global treasury management solutions to foreign exchange. And for the sophistication of the investment capital through our relationship with Mitsubishi UFJ Financial Group, you’ll have access to local experts in over 40 countries. that started swarming failed banks at the time. That’s the definition of a strong global partner. “The FDIC felt a bit overmatched by all of the private equity-sponsored applications it was receiving in late 2008 and early 2009,” said With Union Bank, the world can be an easy place to do business. Call us today. Kendall Raine, executive managing director of the financial institutions group at Marshall & Commercial Banking: Commercial Treasury Services: Business Banking: Stevens Inc. in downtown Los Angeles. Scott Connella Diane Williams, CTP William Schleifer More fundamentally, Raine said, there was a Executive Vice President Senior Vice President Vice President “mismatch of expectations” when the FDIC 213-236-4275 213-236-5085 213-236-6861 began dealing with private equity because investors are looking to maximize profits, while the government wants to minimize losses. “If the private equity guys made a lot of money doing this, it made the FDIC look bad. ©2011 Union Bank, N.A. And if the private-equity guys blew it and the Union Bank is a proud member of the Mitsubishi UFJ Financial Group (MUFG), one of the world’s largest financial organizations. Financing subject to credit and collateral approval. unionbank.com Please see page 26 2-Page Spread Single Page View Thumbnails | LABJ User Guide | Front Page | Table of Content Previous Page Zoom In Zoom Out Next Page

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SPECIAL REPORT BANKING & FINANCE QUARTERLY

Continued from page 24 OneWest Won’t Be a Home for Mortgages Only banks ended up back in trouble, it made the FDIC look bad,” Raine said. “Only if the banks NEWest Bank’s predecessor, IndyMac … did average but unimpressively well did the OBank, churned out home mortgages at a FDIC look like it did a good job, which of course nearly frantic pace all over the country. But wasn’t interesting to the private-equity guys.” OneWest’s leaders say they have developed a more sober business model that calls for less ‘We now have Clamp down focus on mortgage loans. OneWest did better – much better – than The Pasadena federal savings bank is being a really good average. reoriented through a five-year plan to become According to an FDIC employee who worked more like a conventional commercial bank. baseline to grow on failed-bank resolutions at the time, “senior “We want to be a regional bank,” said people” within the agency, recognizing that Chairman Steven Mnuchin. “We don’t want our retail banking OneWest “had gotten a good deal,” began grum- to be a nationwide originator of (federally bling about the thrift’s unusually large profits. backed) mortgages.” franchise from.’ Regulators learned their lesson quickly. The initial stage has included growing the JOSEPH OTTING, OneWest After another private-equity group bought a new institution through the acquisitions of First large failed bank – Florida’s BankUnited, Federal Bank of California and a second bank, which was acquired by a group that included as well as rebranding the acquired institutions. Blackstone Group LP – the government Among other things, that gives OneWest more clamped down on private-equity investors. offices and branches, expanding its ability to “Over the last six months, we’ve gone out a more “diversified lending mix.” Among the changes, the FDIC eliminated gather deposits from this region. and attracted some very, very talented people Currently, commercial and industrial the loss-share bracket in which the agency Also last year, OneWest tabbed L.A.’s to allow us to implement our growth strategy,” loans account for about 1 percent of the port- reimburses 95 percent of losses, according to a Davis Elen Advertising to develop a ubiqui- he said. “We now have a really good baseline folio, but the goal is to grow that to as much recent JPMorgan Chase report. tous series of TV, radio, billboard and print to grow our retail banking franchise from.” as 20 percent within three years. In the “The terms of (OneWest’s) deal would be ads (including ones that are published in the Among the other hires were Grant process, the bank will reduce its exposure to hard to get today,” Raine said. Business Journal). OneWest also signed on Ahearn, who left Union Bank to become an residential mortgages from more than 70 per- The FDIC also introduced rules to make as sponsors of the Los Angeles Lakers and executive vice president at OneWest, and cent to about 50 percent. failed-bank acquisitions more difficult for non- Los Angeles Angels of Anaheim. Brian Brooks, a longtime financial lawyer Executives say they have already funded bank buyers. The bank has taken other steps to carry who is now vice chairman. a large number of business loans, which But OneWest’s owners, who had secured a out its plan, such as hiring a number of long- The thrift is continuing to look for should appear on the balance sheet in the charter with the IndyMac deal, were free to time bankers away from rivals. That includes bankers, including someone who will handle coming quarters. continue acquiring failed banks. In December Joseph Otting, who left U.S. Bancorp to commercial real estate loan originations. That doesn’t mean OneWest will abandon 2009, it bought FirstFed. The acquisition is become chief executive in October after prior This differs sharply from IndyMac’s whole- mortgage loans. In fact, one element of its expected to cost the FDIC just $146 million. CEO Terry Laughlin joined Bank of Ameri- sale business model. It had few branches and it advertising campaign promotes jumbo loans Two months later, OneWest bought La ca Corp.’s mortgage unit. bought deposits mostly from national brokers to – particularly profitable mortgage loans that Jolla Bank. The back-to-back acquisitions Otting said one of his top goals will be to underwrite mortgage loans across the country. top $417,000 and are common in Southern added nearly $10 billion in assets, while the expand a number of divisions, including The bulk of its loans were home mortgages. California with its high house prices. business and commercial real estate lending. Otting said OneWest plans to transition to – Richard Clough Please see page 27

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JUNE 20, 2011 LOS ANGELES BUSINESS JOURNAL 27

SPECIAL REPORT BANKING & FINANCE QUARTERLY

Continued from page 26

addition of a portfolio of real estate loans purchased in November from Citigroup ‘It’s not our strategic goal Inc. added $1.4 billion. In the end, OneWest’s assets skyrocketed to $27 billion, to necessarily be in the top the most of any bank or thrift headquartered in Southern California. 100 mortgage lenders for Since the deals, OneWest has done a fair amount of scaling back. As the new owners agency conforming loans.’ took over IndyMac, they put the “kibosh on STEVEN MNUCHIN, OneWest new products,” one former employee said. More recently, management shuttered the reverse-mortgage unit known as Financial Freedom, which had been the nation’s largest reverse-mortgage lender under IndyMac, resulting in 65 layoffs. OneWest’s loan volume is down significantly in absolute terms and relative to its competitors. According to data compiled by Inside Mortgage Finance, the cutoff for the 50 largest mortgage lenders last year was $2.3 billion. Cecala noted that OneWest is on pace to do about one-quarter of that for the year. “Your Aunt Sue does more volume,” he said. “Certainly it’s one of the smallest amounts of origination for servicers that large.” That apparently is not standard. In the purchase and assumption agreement, the FDIC states OneWest “agrees to provide full service banking in the trade area” of IndyMac. In granting approval for the OneWest group to organize as a thrift holding company, the OTS said the deal would “ensure that the customers of (Indy- Mac) continue to receive the services that (IndyMac) had provided.” William Ruberry, a spokesman for the Office of Thrift Supervision, said the agency does not comment on specific institutions, but he acknowledged that mortgage lending is “the traditional bread and butter of the thrift industry.”

Strategic plan Mnuchin, however, defends the strategy being pursued by OneWest, which he said is trying to become a more conventional regional bank. “How exactly does Dodd-Frank affect us?” He said the ownership group submitted a full business plan to regulators that detailed its inten- People who know financial services, know BDO. tions to move away from mortgage lending. “That business plan is, in all material aspects, exactly the same today,” he said. “You have to understand, it’s not our strategic goal to necessarily be in the top 100 mortgage lenders for agency conforming loans.” However, Dennis Santiago, chief executive of Institutional Risk Analytics, a banking industry research firm in Torrance, said in a market dominated by national banks and with substantial regional challengers such as City National Corp., it won’t be so easy to become a major lender. “Can they … become a viable competitor? That’s an interesting question,” he said. “The bank has not yet seriously begun to prove itself. That’s a tough business to get into.” Indeed, the chief executives of lenders such as Community Bank in Pasadena, Farmers & Merchants Bank in Long Beach, Malaga Bank in Palos Verdes Estates and others all said that OneWest, for all its advertising, isn’t Accountants and Consultants much of a loan rival. www.bdo.com “We don’t see much of them in the lending market,” said Randy Bowers, Malaga’s chief executive. Still, one rival said that Soros, Paulson and the other investors showed some nerve to make a major acquisition at a time when other The scope of the Dodd-Frank Act extends to nearly every part of the financial services potential buyers passed on the deal. industry and beyond. BDO’s Financial Services practice provides the highly specialized “This wasn’t free money,” said the tax, assurance, and consulting services required in an evolving regulatory environment. investor, who submitted a preliminary bid for Our deep commitment to client service is matched only by our in-depth knowledge of IndyMac’s assets in late 2008 and asked not to be named. “It was a calculated risk that turned the issues – and changes – that affect financial service firms today. up heads for them.”

28 LOS ANGELES BUSINESS JOURNAL JUNE 20, 2011

SPECIAL REPORT BANKING & FINANCE QUARTERLY

L.A. County-Based Banks Ranked by assets as of March 31, 2011

Assets Deposits Loans % Return on % Return on Problem Loans as Tier 1 Core Risk-Based Problem Assets 1 Bank ($ millions) ($ millions) ($ millions) Assets 1Q’11 Equity 1Q’11 % of Total Loans Capital Ratio Capital Ratio as % of Equity

City National Bank 21,270 18,552 13,036 0.8 7.6 4.2 13.3 15.9 34.6 East West Bank 21,137 16,575 13,779 1.1 10.2 4.7 15.6 17.3 36.1 Cathay Bank 10,598 7,113 6,897 0.9 6.1 4.0 14.9 16.8 23.2 CapitalSource Bank 6,180 4,708 3,947 2.1 13.7 4.4 17.5 18.8 21.1 Farmers and Merchants Bank of Long Beach 4,399 3,071 2,078 1.4 9.8 4.2 25.7 27.0 20.5 Nara Bank2 2,924 2,186 2,197 1.0 7.8 2.2 16.1 17.3 12.9 Hanmi Bank 2,873 2,439 2,174 1.7 18.7 7.0 11.7 13.0 59.0 Wilshire State Bank 2,785 2,279 2,289 -7.0 -74.1 4.1 10.9 12.3 41.7 Community Bank 2,535 1,940 1,735 0.8 8.9 4.4 11.5 12.7 33.7 Center Bank2 2,262 1,785 1,560 1.0 7.6 3.5 18.9 20.1 18.9 Manufacturers Bank 1,958 1,508 956 0.2 1.6 3.4 18.3 19.6 14.6 Far East National Bank 1,617 1,103 1,079 -1.9 -9.4 13.6 18.6 19.9 49.6 Chinatrust Bank (U.S.A.) 1,505 1,174 818 2.0 11.7 1.3 29.0 30.3 4.3 Banamex USA 1,234 941 541 0.9 3.9 0.9 38.1 39.4 1.7 Preferred Bank 1,194 1,015 886 0.2 2.0 11.7 14.2 15.4 101.8 American Business Bank 1,061 903 411 0.9 13.1 0.0 14.1 15.4 0.3 State Bank of India (California) 804 612 636 -0.7 -4.8 4.0 18.5 19.8 21.9 California United Bank 764 661 430 0.1 1.4 2.2 12.4 13.6 12.3 Opus Bank 708 294 182 -4.5 -7.8 0.4 184.5 185.1 0.2 Saehan Bank 578 498 436 0.7 5.9 7.4 14.3 15.6 57.0 Grandpoint Bank 571 489 346 -1.9 -12.9 2.1 14.7 15.2 10.6 Pacific City Bank 526 457 450 -2.8 -26.3 3.9 12.9 14.1 43.9 1st Enterprise Bank 510 461 232 0.5 5.6 0.0 11.7 12.9 0.0 Boston Private Bank & Trust Co.3 483 407 415 -1.0 -8.3 2.6 14.3 15.6 20.6 First Credit Bank 479 354 392 4.7 19.2 5.1 29.2 30.5 24.2 First Commercial Bank (USA) 471 372 412 0.5 2.7 3.2 23.7 25.0 16.4 EverTrust Bank 468 343 288 0.6 2.7 4.7 20.4 21.6 25.7 Private Bank of California 462 385 235 0.3 3.3 0.1 15.9 17.2 0.4 TomatoBank N.A. 434 367 366 0.5 3.7 10.2 14.7 16.0 90.7 Commonwealth Business Bank 403 349 323 1.1 9.3 2.6 14.3 15.6 17.4 GBC International Bank 378 334 281 0.8 8.7 2.7 12.3 13.8 34.7 National Bank of California 364 326 268 -7.0 -68.5 3.1 12.3 13.5 37.9 Community Commerce Bank 349 269 269 0.4 4.2 3.3 11.7 12.9 56.1 First General Bank4 339 300 259 0.5 4.9 1.5 14.1 15.3 11.8 1st Century Bank N.A. 319 274 189 0.2 1.8 4.2 18.2 19.4 21.0 Royal Business Bank 309 244 215 0.7 3.6 0.0 27.8 29.1 0.8 Beach Business Bank 297 256 255 0.6 5.4 2.6 15.0 16.3 18.6 Professional Business Bank 294 255 188 0.2 1.3 4.0 15.8 16.5 22.9 Mission Valley Bank 254 193 185 0.3 2.2 2.6 17.0 18.3 14.6 Bank of Santa Clarita 202 144 132 0.1 0.6 0.0 13.9 15.1 0.3 First Choice Bank 198 177 93 0.5 5.7 0.2 15.8 17.1 1.0 Pacific Commerce Bank 196 175 145 0.6 7.3 5.8 13.6 14.9 46.2 Excel National Bank 193 161 157 -3.9 -41.4 14.5 13.6 14.9 104.0 Gateway Business Bank 187 154 100 -1.8 -12.2 8.0 33.3 34.6 35.8 Gilmore Bank 185 157 125 1.8 18.0 1.7 14.9 16.1 40.6 International City Bank N.A. 172 125 69 -0.1 -0.8 7.5 18.6 19.9 54.2 Mega Bank 164 134 136 1.0 6.8 0.7 19.8 21.0 6.4 Omni Bank N.A. 157 128 103 -1.4 -8.6 5.4 26.7 27.9 22.0 American Plus Bank N.A. 156 128 128 0.8 5.6 1.7 15.4 16.6 10.0 United Pacific Bank 149 107 118 0.1 1.0 5.2 13.7 14.9 38.8 Bank of Manhattan N.A. 144 118 86 -2.6 -18.5 0.0 21.8 23.0 0.0 Golden Security Bank3 140 114 112 1.5 24.5 6.6 8.6 9.9 125.9 First Standard Bank 131 113 112 1.1 9.3 0.9 16.0 17.3 5.8 American Continental Bank 129 106 96 0.7 5.2 11.6 19.3 20.5 60.6 Eastern International Bank 118 103 86 0.8 6.6 0.0 16.4 17.7 0.0 Promerica Bank 118 99 86 0.1 0.5 1.4 20.0 21.2 6.3 Mizuho Corporate Bank of California 113 41 1 -4.2 -6.6 12.1 5649.1 5650.4 0.1 Americas United Bank 105 80 93 -4.4 -28.2 1.6 16.6 17.9 15.7 California Business Bank 103 89 76 -0.3 -3.8 5.4 11.7 13.0 74.1 Pacific Alliance Bank 101 84 70 0.7 5.9 0.3 19.9 21.1 1.5 Friendly Hills Bank 98 77 62 0.7 5.8 4.8 18.6 19.8 25.0 Premier Business Bank 92 77 78 0.5 4.1 0.0 15.6 16.9 0.1 Merchants Bank of California N.A. 87 63 44 9.3 56.4 17.2 30.5 31.8 49.9 Stellar Business Bank 85 68 57 0.4 2.3 0.0 29.8 31.0 3.4 Asian Pacific National Bank 51 43 28 0.9 5.8 0.7 23.4 24.6 2.5 Bank of Whittier N.A. 51 42 26 -0.1 -0.9 9.2 27.2 28.4 28.7 Pan American Bank 43 40 37 -1.2 -15.4 3.2 11.9 13.1 41.4 Golden Coast Bank 36 25 33 -1.4 -4.7 0.0 31.9 33.2 0.0

Savings and Loans OneWest Bank FSB 26,720 15,253 15,711 1.9 11.7 18.6 41.9 41.3 74.6 Kaiser Federal Bank 901 688 709 1.0 7.9 3.4 19.4 20.5 21.8 Malaga Bank FSB 816 536 775 1.4 12.3 0.0 18.7 19.3 0.0 Broadway Federal Bank FSB 477 343 404 0.1 1.2 10.7 12.1 13.4 111.1 Universal Bank 472 426 412 1.1 12.2 6.1 11.2 12.4 80.2 Wedbush Bank 192 165 71 0.5 4.0 0.0 23.8 25.0 0.0

1 Problem assets include loans 90 days or more past due and foreclosed property owned. 2 Nara Bank and Center Bank agreed Dec. 9 to merge. 3 Formerly First Private Bank & Trust. Name changed on May 27 as part of parent company’s consolidation of four affiliated private banks in one charter. 4 First General Bank and Golden Security Bank agreed May 26 to merge. Source: Federal Deposit Insurance Corp. 2-Page Spread Single Page View Thumbnails | LABJ User Guide | Front Page | Table of Content Previous Page Zoom In Zoom Out Next Page

JUNE 20, 2011 LOS ANGELES BUSINESS JOURNAL 29

SPECIAL REPORT BANKING & FINANCE QUARTERLY

Startup Banks Since March 31, 2010 L.A. County-Based Bank-Loan Breakdown

Assets Deposits Date Loans outstanding as of March 31, 2011 Name ($ millions) ($ millions) Established No new banks have received charters in Los Angeles County since March 31, 2010. Real Estate Loans Volume % of Volume % of Rank Institution ($ millions) loans Rank Institution ($ millions) loans

Acquired Banks Since March 31, 2010 1 OneWest Bank FSB 15,595 99 16 Preferred Bank 664 75 Assets Date 2 East West Bank 9,944 72 17 Manufacturers Bank 441 46 Name Acquired by (millions) Acquired 3 City National Bank 8,392 64 18 State Bank of India 440 69 4 Cathay Bank 5,345 78 19 Broadway Federal Bank FSB 391 97 Western Commercial Bank First California Bank 99 11/5/2010 5 Wilshire State Bank 1,955 85 20 First Credit Bank 389 99 First Commerce Bank Grandpoint Bank 358 12/28/2010 6 CapitalSource Bank 1,946 49 21 Universal Bank 383 93 1 Professional Business Bank California General Bank 281 12/31/2010 7 Farmers and Merchants 1,939 93 22 Saehan Bank 353 81 American Premier Bank First General Bank 111 1/31/2011 8 Hanmi Bank 1,823 84 23 Boston Private Bank & Trust 348 84 1 California General Bank acquired Professional Business Bank. 9 Nara Bank 1,718 78 24 TomatoBank N.A. 323 88 The combined bank retained the Professional Business Bank name. 10 Community Bank 1,332 77 25 Pacific City Bank 307 68 11 Center Bank 1,147 74 26 First Commercial Bank 304 74 12 Malaga Bank FSB 770 99 27 Community Commerce Bank 269 100 13 Far East National Bank 751 70 28 Grandpoint Bank 265 77 Market Share 14 Chinatrust Bank (U.S.A.) 731 89 29 American Business Bank 256 62 All ﬁ nancial institutions ranked by share of deposits in L.A. County 15 Kaiser Federal Bank 677 96 30 EverTrust Bank 255 89

Rank Institution % Market Share Rank Institution % Market Share Commercial and Industrial Loans 1 Bank of America 20.78 16 CapitalSource Bank 0.84 2 Wells Fargo 14.46 17 Hanmi Bank 0.79 Volume % of Volume % of 3 Union Bank 10.46 18 Citizens Business Bank 0.67 Rank Institution ($ millions) loans Rank Institution ($ millions) loans 4 JPMorgan Chase Bank N.A. 8.45 19 Farmers and Merchants Bank 0.66 1 City National Bank 3,790 29 16 Far East National Bank 115 11 5 Citibank 5.04 20 Pacific Western Bank 0.56 2 East West Bank 3,007 22 17 Pacific City Bank 112 25 6 City National Bank 4.60 21 Center Bank 0.55 3 Cathay Bank 1,518 22 18 OneWest Bank FSB 106 1 7 OneWest Bank FSB 4.54 22 Community Bank 0.48 4 CapitalSource Bank 1,369 35 19 Beach Business Bank 103 40 8 U.S. Bank 3.74 23 Nara Bank 0.47 5 Manufacturers Bank 514 54 20 Private Bank of California 98 42 9 East West Bank 3.35 24 Manufacturers Bank 0.45 6 Nara Bank 468 21 21 Farmers and Merchants 94 5 10 Bank of the West 2.84 25 Preferred Bank 0.43 7 Community Bank 377 22 22 Commonwealth Business Bank 89 28 11 Cathay Bank 1.80 26 First Bank 0.43 8 Hanmi Bank 337 15 23 Chinatrust Bank (U.S.A.) 86 10 12 Comerica Bank 1.55 27 Banco Popular North America 0.38 9 Center Bank 330 21 24 1st Enterprise Bank 84 36 13 HSBC Bank USA N.A. 1.32 28 American Business Bank 0.35 10 Wilshire State Bank 316 14 25 Grandpoint Bank 78 23 14 California Bank & Trust 1.06 29 Luther Burbank Savings 0.35 11 Banamex USA 258 48 26 Saehan Bank 76 17 15 Wilshire State Bank 0.91 30 Far East National Bank 0.34 12 Preferred Bank 221 25 27 Mission Valley Bank 70 38 Information as of June 30, 2010 13 State Bank of India 178 28 28 National Bank of California 67 25 (updated annually in October) 14 California United Bank 170 40 29 GBC International Bank 54 19 15 American Business Bank 149 36 30 California General Bank N.A. 44 23 Most Proﬁ table L.A.-Based Banks Loans to Individuals (including credit cards) Ranked by return on assets for the quarter ended March 31, 2011 Volume % of Volume % of % Returns on % Returns on Rank Institution ($ millions) loans Rank Institution ($ millions) loans Rank Bank Assets 1Q’11 Rank Bank Assets 1Q’11 1 East West Bank 704 5.1 16 National Bank of California 6 2.2 1 Merchants Bank of California N.A. 9.3 16 Nara Bank 1.0 2 City National Bank 408 3.1 17 California United Bank 6 1.3 2 First Credit Bank 4.7 17 Center Bank 1.0 3 Banamex USA 97 17.8 18 Omni Bank N.A. 6 5.4 3 CapitalSource Bank 2.1 18 Mega Bank 1.0 4 Center Bank 42 2.7 19 OneWest Bank FSB 5 0.0 4 Chinatrust Bank (U.S.A.) 2.0 19 Banamex USA 0.9 5 Kaiser Federal Bank 31 4.4 20 First Standard Bank 4 3.8 5 OneWest Bank FSB 1.9 20 Asian Pacific National Bank 0.9 6 Pacific City Bank 31 6.8 21 Pan American Bank 4 10.1 6 Gilmore Bank 1.8 21 American Business Bank 0.9 7 Farmers and Merchants 21 1.0 22 1st Enterprise Bank 4 1.6 7 Hanmi Bank 1.7 22 Cathay Bank 0.9 8 Bank of Santa Clarita 17 12.6 23 1st Century Bank N.A. 3 1.7 8 Golden Security Bank 1.5 23 Community Bank 0.8 9 Community Bank 16 0.9 24 Bank of Manhattan N.A. 3 3.3 9 Malaga Bank FSB 1.4 24 Eastern International Bank 0.8 10 Wilshire State Bank 15 0.6 25 California General Bank N.A. 3 1.4 10 Farmers and Merchants Bank 1.4 25 GBC International Bank 0.8 11 Cathay Bank 12 0.2 26 American Business Bank 3 0.6 11 First Standard Bank 1.1 26 American Plus Bank N.A. 0.8 12 Hanmi Bank 10 0.5 12 East West Bank 1.1 27 City National Bank 0.8 27 Grandpoint Bank 2 0.7 13 Commonwealth Business Bank 1.1 28 American Continental Bank 0.7 13 Nara Bank 8 0.4 28 Chinatrust Bank (U.S.A.) 2 0.2 14 Universal Bank 1.1 29 Royal Business Bank 0.7 14 Saehan Bank 7 1.6 29 Private Bank of California 1 0.6 15 Kaiser Federal Bank 1.0 30 Pacific Alliance Bank 0.7 15 Gilmore Bank 6 5.1 30 Commonwealth Business Bank 1 0.5

L.A. County Banks, Savings and Loans Overview Problem Assets as Percent of Equity Ranked by highest percent as of March 31, 2011 Assets (billions) Deposits (billions) Net Income (millions) Branches % Problem % Problem $450 427 Rank Institution Assets Rank Institution Assets 800 754 750 $140 132.8 425 131.2 1 Golden Security Bank 125.9 16 Pacific Commerce Bank 46.2 400 700 2 Broadway Federal Bank FSB 111.1 17 Pacific City Bank 43.9 120 375 350 330 600 3 Excel National Bank 104.0 18 Wilshire State Bank 41.7 325 4 Preferred Bank 101.8 19 Pan American Bank 41.4 100 94.2 96.4 300 500 5 TomatoBank N.A. 90.7 20 Gilmore Bank 40.6 275 6 Universal Bank 80.2 21 United Pacific Bank 38.8 80 225 400 7 OneWest Bank FSB 74.6 22 National Bank of California 37.9 200 8 California Business Bank 74.1 23 East West Bank 36.1 60 175 300 9 American Continental Bank 60.6 24 Gateway Business Bank 35.8 125 10 Hanmi Bank 59.0 25 GBC International Bank 34.7 40 100 200 11 Saehan Bank 57.0 26 City National Bank 34.6 75 12 Community Commerce Bank 56.1 27 Community Bank 33.7 20 50 100 13 International City Bank N.A. 54.2 28 Bank of Whittier N.A. 28.7 25 14 Merchants Bank of California N.A. 49.9 29 EverTrust Bank 25.7 0 0 0 15 Far East National Bank 49.6 30 Friendly Hills Bank 25.0 Q1’10 Q1’11 Q1’10 Q1’11 Q1’10 Q1’11 Q1’10 Q1’11 Source for all data: Federal Deposit Insurance Corp. 2-Page Spread Single Page View Thumbnails | LABJ User Guide | Front Page | Table of Content Previous Page Zoom In Zoom Out Next Page

30 LOS ANGELES BUSINESS JOURNAL DATA BANK JUNE 20, 2011

CONVENTIONS State Farm Foreclosure Workshop CALENDAR 1226 E. Main St., Alhambra Sponsor: California Foreclosure Institute $15 5:30 p.m. • Dwell on Design Tuesday, June 21 (626) 282-8481 Norwalk Library June 24-26 12350 Imperial Highway L.A. Economic Forecast www.DwellonDesign.com Entrepreneurship Free Sponsor: Beacon Economics Sponsor: National Society of Hispanic MBAs (310) 379-0101 8 a.m. 6:30 p.m. Anime Expo Westin Bonaventure Hotel • Los Angeles Athletic Club July 1-4 404 S. Figueroa St., downtown Los Angeles Wednesday, June 29 431 W. Seventh St., downtown Los Angeles www.Anime-Expo.org $175 $15 Networking Breakfast (310) 571-3399 (877) 467-4622 Sponsor: Greater San Fernando Valley Chamber of Commerce • California Gift Show Job Search Saturday, June 25 7:15 a.m. July 22-25 Sponsor: Challenger Networking Group Braemar Country Club (800) 526-2784 Noon Access to Capital Expo 4001 Reseda Blvd., Tarzana Zen Buffet Sponsor: VEDC $35 21610 Victory Blvd., Woodland Hills 8 a.m. (818) 989-0300 • Adultcon $11 lunch Sheraton L.A. Downtown Hotel July 29-31 (818) 992-4270 711 S. Hope St. $10 All About Business Loans (310) 859-6900 (818) 907-9922 Sponsor: VEDC Business Mixer 4 p.m. Sponsor: Long Beach Area Chamber of Commerce • BrideWorld Expo Financial Modeling Charo Community Development Corp. July 30-31 5:30 p.m. 4301 E. Valley Blvd., downtown Los Angeles Shoreline Yacht Club Sponsor: UCLA Extension Free (800) 600-7080 386 Shoreline Drive South, Long Beach 9 a.m. $10 (RSVP required) Extension Lindbrook Center (818) 907-9922 Modern Living Expo (562) 436-1251 10920 Lindbrook Drive, Westwood • $195 Tuesday, July 5 Aug. 6-7 (310) 825-4938 Wednesday, June 22 SBA’s 8(a) Program (626) 274-9666 Sponsor: Federal Technology Center Business Plan Workshop Sunday, June 26 9 a.m. West Coast Expo Sponsor: Beverly Hills Chamber of Commerce El Camino College Small Business Development • Casino Night Aug. 12-14 8:30 a.m. Center Wells Fargo Sponsor: Beverly Hills Bar Association, 13430 Hawthorne Blvd., Hawthorne (323) 905-1306 433 N. Camden Drive, Beverly Hills Barristers $25 5 p.m. Free (310) 248-1000 Sofitel (866) 382-7822 • Exxxotica Expo 8555 Beverly Blvd., Los Angeles Aug. 26-28 $95 Friday, July 8 (215) 462-8800 State of the City (310) 601-2422 Sponsor: West Hollywood Chamber of Commerce Tani Cantil-Sakauye, Chief Justice, Noon California Supreme Court Senior Clean Air Fair Plummer Park, Fiesta Hall Tuesday, June 28 Sponsor: Town Hall Los Angeles • Sept. 15 7377 Santa Monica Blvd., West Hollywood Speed Networking Noon $75 Sponsor: Santa Monica Chamber of Commerce Beverly Hills Hotel (909) 396-2221 (323) 650-2688 5:30 p.m. 9641 Sunset Blvd., Beverly Hills Milken Institute $67 • Wizard World Comic Con All About Business Loans 1250 Fourth St., Santa Monica (213) 628-8141 Sept. 24-25 Sponsor: VEDC $25 (646) 380-2475 4 p.m. (310) 393-9825 To be considered for publication, Calendar listings Northridge Valley Regional Chamber of Commerce should be submitted at least three weeks in advance 9401 Reseda Blvd., Northridge Business Mixer of the event. Listings can be submitted by e-mail to • Fall Home and Garden Show Free Sponsor: Sherman Oaks Chamber of Commerce [email protected] or by mail to: Sept. 30 (818) 907-9922 5:30 p.m. (800) 999-5400 Mad Bulls’ Tavern Los Angeles Business Journal After Hours Mixer 14649 Ventura Blvd., Sherman Oaks Calendar Sponsor: Alhambra Chamber of Commerce $15 5700 Wilshire Blvd. #170 5 p.m. (818) 906-1951 Los Angeles, CA 90036 L.A. Convention Center, (213) 741-1151, ext. 5340

Debts: $149,409 Montebello 90640 (Business type N/A) Doc# LA11-31126-TD BANKRUPTCIES Doc# LA11-30746-EC Chapter: 7 8052 Melrose Ave., 2nd Floor File-Date: 05/16/11 File-Date: 05/12/11 Assets: $1,038,000 L.A. 90046 Dirk Anderson-Burley M. at WCC. Inc. Alex Gilanians Debts: $1,155,000 Chapter: 7 213-383-5400 DBA: Men at Work Concrete Cleaners 818-548-1816 Doc# LA11-30822-BR Assets: $854,498 (Business type N/A) File-Date: 05/13/11 Debts: $883,742 OJ General Partnership 13119 S. Broadway Two Chicks & a Shoe Inc. Pro-per. Doc# LA11-31045-PC (Distressed properties) L.A. 90061 (Business type N/A) File-Date: 05/14/11 2601 S. Soto St. Chapter: 7 11693 San Vicente Blvd., Suite 590 Pacific First Redlands Baruch C. Cohen Vernon 90058 Assets: $300 L.A. 90049 (Single-asset real estate) 323-937-4501 Chapter: 11 Debts: $216,044 Chapter: 7 7226 Sepulveda Blvd., Suite #200 Assets: $1,651,650 Doc# LA11-30612-BB Assets: N/A Van Nuys 91405 Abas LLC Debts: $4,143,762 File-Date: 05/11/11 Debts: N/A Chapter: 11 (Business type N/A) Doc# LA11-31147-SK Aleksey Katmissky Doc# LA11-30781-BR Assets: N/A 3035 W. Olympic Blvd. File-Date: 05/16/11 323-944-0015 File-Date: 05/12/11 Debts: N/A L.A. 90006 William H. Brownstein Chapter: 11 Alan F. Broidy Doc# SV11-15947-VK 310-458-0048 64th Place LLC 310-286-6601 File-Date: 05/13/11 Assets: N/A Debts: N/A (Single-asset real estate) Bus type N/A. Armen Janian Rocket Valero Corp. Ph# -N/A- Doc# LA11-31122-TD 6100 Center Drive, #1200 DBA: Rocket Gas Co. L.A. 90045 Xtreme Image Inc. File-Date: 05/16/11 (Business type N/A) Chapter: 11 (Business type N/A) Victorville Partners LLC Dirk Anderson-Burley 1241 W. Washington Blvd. Assets: $928,481 18246 Gale Ave. (Real estate services) 213-383-5400 L.A. 90007 Debts: $1,660,013 City of Industry 91748 7226 Sepulveda Blvd., Suite #200 Chapter: 7 Doc# LA11-30741-BR Chapter: 7 Van Nuys 91405 Wien America LLC Assets: N/A File-Date: 05/12/11 Assets: N/A Chapter: 11 (Business type N/A) Richard H. Gibson Debts: N/A Assets: N/A 3035 W. Olympic Blvd. Debts: N/A 818-716-7950 Doc# LA11-30816-EC Debts: N/A L.A. 90006 Doc# LA11-31197-BR File-Date: 05/12/11 Doc# SV11-15951-AA Chapter: 11 File-Date: 05/16/11 Fast Car Towing Inc. Julie J. Moradi-Lopes File-Date: 05/13/11 Assets: N/A Frederick A. Romero (Tow truck company) 818-291-6340 Armen Janian Debts: N/A 213-401-5724 18418 Vanowen St. Ph# -N/A- Reseda 91335 Integrated Technologies Consulting Inc. Bankruptcy information is supplied by Timely Info of Los Angeles, Jack Vaughn (323) 664-4423. Chapter: 7 (Business type N/A) Hollywood Casting LLC Chapter 7: a “straight” liquidation bankruptcy involving an appointed trustee to sell all assets by Assets: N/A 15549 Devonshire St., Suite #6 (Business type N/A) auction or other means to pay creditors and trustee fees. Debts: N/A Mission Hills 91345 4827 Ledge Ave. Chapter 11: a process which allows a business to gain temporary relief from paying debt in order to Doc# SV11-15855-AA Chapter: 7 North Hollywood 91601 attempt a successful reorganization. The debtor remains in control of the business during the bank- File-Date: 05/11/11 Assets: N/A Chapter: 7 ruptcy and the business continues to function. Vafa A. Khoshbin Debts: N/A Assets: N/A Chapter 13: a bankruptcy plan available to individuals whose “income is sufficiently stable and reg- 310-820-2500 Doc# SV11-15925-VK Debts: N/A ular to enable such individual to make payments under a plan.” The debtor makes payments to a File-Date: 05/12/11 Doc# SV11-15997-AA trustee who disburses the funds to creditors. All Service Prime Enterprises Inc. Michael Jay Berger File-Date: 05/13/11 Involuntary bankruptcy: the debtor is forced into bankruptcy by secured creditors whose claims (Business type N/A) 310-271-6223 Tawni Takagi total at least $220,000. Involuntary bankruptcy may be filed under Chapter 7 or 11. 2044 Ridgeview Drive 818-657-6402 AKA: also known as FKA: formerly known as Glendale 91201 Bereco Construction Inc. DBA: doing business as FAW: formerly associated with Chapter: 7 (Business type N/A) Fremont Investment Holdings Inc. FDBA: formerly doing business as Assets: $1,900 273 Meaiden Lane AKA: Fremont Investment Funding 2-Page Spread Single Page View Thumbnails | LABJ User Guide | Front Page | Table of Content Previous Page Zoom In Zoom Out Next Page

June 20, 2011 An Advertising Supplement to the Los Angeles Business Journal

The Business of Accounting*

A ROUNDTABLE * DISCUSSION

Joel B. Anik, CPA Dennis L. Duban, CPA Alan B. Griffith, CPA, MS Grant Thornton LLP Duban Sattler Marcum LLP Managing Partner and Associates LLP Partner Managing Partner

David Krajanowski, CPA Thomas D. Leaper, CPA Scott M. Sachs, CPA Todd Van Der Well, CPA Managing Partner RBZ LLP J.H. Cohn LLP Moss Adams LLP SingerLewak Co-Partner In-Charge, Regional Managing Partner, Office Managing Partner RBZ Middle Market Group Southern California Los Angeles & Woodland Hills

This special advertising supplement did not involve the reporting or editing staff of the Los Angeles Business Journal. 2-Page Spread Single Page View Thumbnails | LABJ User Guide | Front Page | Table of Content Previous Page Zoom In Zoom Out Next Page

32 AN ADVERTISING SUPPLEMENT TO THE LOS ANGELES BUSINESS JOURNAL JUNE 20, 2011 Business of Accounting Roundtable

ROUNDTABLE PARTICIPANTS: How has

Joel B. Anik, CPA the slump Grant Thornton LLP in the Managing Partner s our roller- Dennis L. Duban, CPA economy affected coaster of an economy continues to see its Duban Sattler your clients and climbs and dips, the Los Angeles Business and Associates LLP Managing Partner * A what advice Journal turned to some of the leading Alan B. Griffith, CPA, MS have you given accountants in the greater Los Angeles area Marcum LLP Partner to help them? to get their assessments regarding the current state of business accounting in Los Angeles David Krajanowski, CPA SlingerLewak LLP LEAPER: Managing Partner Over the last few years our economy has and the various trends that they have been seen the most severe recession in quite some time. observing, and in some cases, driving. Below Thomas D. Leaper, CPA Are we at a bottom yet and when can we expect the economy to improve? Are current economic RBZ LLP conditions the new normal? These are questions is a series of questions the Business Journal Co-Partner In-Charge, RBZ clients ask as they struggle to structure their orga- posed to these financial stewards of Los Middle Market Group nizations to get back to profitability and position themselves for growth. Scott M. Sachs, CPA Angeles County and the unique responses Economic conditions continue to be chal- J.H. Cohn LLP lenging for middle market companies. Most they provided – offering a glimpse into the Regional Managing Partner, have seen a decline in revenue which is not Southern California rebounding, are experiencing difficulty manag- state of business accounting in 2011 – from ing cash flow, and find bank credit more diffi- the perspectives of those in the trenches Todd Van Der Well, CPA cult to obtain. Moss Adams LLP Since this sector is the main engine of job delivering financial advice and leadership to Office Managing Partner growth in our economy, and our economy will not Los Angeles & rebound until people have jobs, the recovery is the businesses of our region today. Woodland Hills largely dependent on the ability of banks to provide

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JUNE 20, 2011 AN ADVERTISING SUPPLEMENT TO THE LOS ANGELES BUSINESS JOURNAL 33

At Grant Thornton, we understand the complex business issues facing your industry. Our professionals work to keep you informed of tomorrow’s issues today.

Passion for serving clients, industry specialization and partner involvement have been the hallmark of Grant Thornton LLP in the U.S. for more than 80 years. Plus, you get the benefit of Grant Thornton International member firms in more than 100 countries. Contact Joel Anik, Managing Partner, at 213.596.3484 or [email protected]. Visit us at GrantThornton.com and find out how it feels to work with people who love what they do!

Grant Thornton refers to Grant Thornton LLP, the U.S. member ﬁrm of Grant Thornton International Ltd, an organization of independently owned and managed accounting and consulting ﬁrms. 2-Page Spread Single Page View Thumbnails | LABJ User Guide | Front Page | Table of Content Previous Page Zoom In Zoom Out Next Page

34 AN ADVERTISING SUPPLEMENT TO THE LOS ANGELES BUSINESS JOURNAL JUNE 20, 2011

THE BUSINESS OF ACCOUNTING

Continued from page 32

lending to middle market companies. mapping where you walk through a Two key areas to focus Given these facts, companies need process step-by-step and document the on to increase cash to adjust expectations and form strate- results. I have participated in this gies for the new normal. Many compa- process many times and it always seems flow are inventory nies have cut costs to adjust to rev- to yield improvements through effi- and accounts receiv- enue declines but find it is not ciencies. The key is to be creative in able. The faster they enough. To survive and thrive in the your thinking and not accept “this is turn, the more cash new normal, companies should focus the way we have always done it.” on a few key areas: Improving profitability is an element you will have – it’s as • Growing revenue in highly profitable to increasing your cash balances but simple as that. categories or lines of business and shed- focusing on improving your cash flow THOMAS LEAPER ding less profitable activities velocity will raise the balance as well. • Creating operating efficiencies Two key areas to focus on to increase (rethinking or re-engineering business cash flow are inventory and accounts processes) receivable (AR). The faster they turn, • Maximizing cash flow by reducing the more cash you will have - it’s as receivable balances and inventory bal- simple as that. To manage inventory ances, or in the case of service compa- you will need good information from nies, increasing employee utilization. both the production planning side You may have a certain group of (orders coming in) and your current products or services that have a higher inventory levels. gross profit margin, or it may be a group Common elements to all of these of customers. Conversely, you may have objectives are the need for good infor- products where margins are very thin. mation, creativity and a strategic focus Identifying these groups and then taking to frame smart business decisions. action to pursue growth in the areas Focus on investing time to create where you have higher margins is a time sound practices in your business and investment that will have positive you will be better able to weather the results. Additionally, you could consider current storm. extending your geographical reach by selling products via the internet. GRIFFITH: Enough has been said about Another area that may yield cost sav- the severity of this most recent eco- ings is looking at all of your operating nomic down-turn. As a tax advisor, my processes to see if there are any oppor- advice is to focus on the fundamentals tunities to make them more efficient. A and work hard to remain a taxpayer method of doing this is work process (profitable with positive cash-flow).

Have you SACHS: Yes, particularly in the areas of be better prepared to seize the strategic ‘Cash is King’ has customer credit, inventory control, and opportunities that are available. One of never been a truer the review and evaluation of overhead our clients, for example, made immedi- seen a expenses. Conservatism seems to be the ate reductions in their cost structure at statement ... Clients change in rule of the day. Depending on the the end of 2008 and early 2009. Not are self-financing industry, we have seen tightening of only did this allow them to achieve more than ever and days outstanding, pushing reductions profitability in 2009, but it also provid- the way your of 10 to 15 percent, development of ed them sufficient capital reserves and using credit lines more efficient re-order points for inven- overall financial strength to make an less, in order to truly clients monitor tories, and logistics optimization to acquisition of a struggling competitor. have an emergency * gain benefits of consolidation and fund available. cash flow and aggregation of the movement of goods. KRAJANOWSKI: “Cash is King” has DAVID KRAJANOWSKI We see many of our clients placing never been a truer statement. I advo- what are some extra focus on their monthly budgets cate clients using detailed rolling 13 and cash flow projections. They are week cash projections to closely mon- examples you monitoring budget-to-actual results in a itor cash, accounts receivable, and more timely manner and are adjusting purchase commitments. I see clients can share? their operations as needed. Further, we implementing more deposit/retainer see higher levels of executive manage- strategies when selling, as well as an ment and owners taking control of increased use of progress billings. cash disbursements and slowing down Clients are self-financing more than the disbursement timeline. ever and using credit lines less, in Our clients are conserving their cash order to truly have an emergency so that they can weather this storm and fund available.

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JUNE 20, 2011 AN ADVERTISING SUPPLEMENT TO THE LOS ANGELES BUSINESS JOURNAL 35

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36 AN ADVERTISING SUPPLEMENT TO THE LOS ANGELES BUSINESS JOURNAL JUNE 20, 2011

THE BUSINESS OF ACCOUNTING

Continued from page 34

DUBAN: What is interesting is that in SACHS: Many of our clients have made How has accounting firms, which were previous- significant investments in “going ly paper driven, going green has actual- green” because they believe it’s the going ly not only helped save the planet but it right thing to do, environmentally and saves money. For a very small change in economically. For example, a client green systems and little or no investment, spent $1.5 million on solar panels at its reams of paper can be saved by reducing Anaheim facility. It was an environ- impacted your client copies of papers kept in files and mentally sound decision because the instead saving them electronically; for- panels generate about 85 percent of the practice and warding tax returns in electronic form electricity they need, but it is also a bot- * rather than paper; sending invoices tom line savings, as they have received your clients’ electronically; saving supporting docu- both Federal and state tax credits. Fur- ments and retaining source documents ther, our client has received substantial businesses? similarly. This saves not only paper, but positive press and praise within their the money for labor to copy docu- industry for taking a leadership role in Many of our clients ments, toner, wear and tear on dealing with environmental issues. We have made significant machines, and most importantly the have several “green” tax specialists who real estate required to store all the files. are working to help our clients under- investments in Other forms of going green, for example stand the maze of Federal and State tax ‘going green’ because recycling; green kitchen practices and 4 incentives to maximize the cash flow they believe it’s the day work weeks have increased morale, effect of green strategies. right thing to do, reduced waste and provided opportuni- On the less severe end, our clients ties for employees to participate in man- are thinking more about things like environmentally and agement decision and brain storming as eliminating plastic water bottles and economically. we continue to look for new opportuni- providing reusable water bottles, SCOTT SACHS ties. For clients, our reduced costs and adding energy-efficient vehicles to their overhead have helped keep fees in employee fleet, going paperless, and check at a time when increases were dif- retrofitting their lighting systems. ficult to justify. It has also increased effi- We’ve been able to support their efforts ciency and turnaround time as docu- by making them aware of the tax cred- ments saved electronically can be sent its and accelerated depreciation avail- electronically, thus providing immedi- able and by introducing them to some ate response to client’s requests. And of our strategic relationships, such as since we are respected by our clients, I Cohn Logistics, which can make their think we have an opportunity to set a shipping expenditures more rewarding good example of how going green can by consolidating environmental and benefit the small business owner and I economic resources. On many levels, believe that we have often inspired our “going green” is a win-win. clients to follow similar practices.

KRAJANOWSKI: Clients, though some- pared to other areas. I feel that clients Clients now realize ... How has what reluctant, are open to investing in do not think they have a choice about technology for their businesses. making these investments, the must do that technology can the use of Detailed cost/benefit analysis is the so in order to survive in the long term. only benefit them, technology rule. If justified, clients are spending They have had to dedicate significant make them more dollars to maintain or increase their resources to continually upgrade their competitive and help competitive advantages. Favorable tax information technology systems. And impacted how laws are helping to create the cash to this has impacted the bottom line them in the short and your clients implement their strategies. sometimes in the short term. However, long term. They have recently, with very aggressive bonus all had to ‘step up’ in * DUBAN: Clients now realize, particularly depreciation legislation and special order to ‘keep up.’ run their the younger generation, that technolo- depreciation income tax allowances, DENNIS DUBAN gy can only benefit them, make them some of which started as far back as 9- businesses – more competitive and help them in the 11, clients have found that the tax ben- short and long term. They have all had efits can, in fact, offset the required are they willing to “step up” in order to “keep up.” investment and that if we as their trust- They have had to continually upgrade ed advisors share that upside potential to make the technology, which seems to change benefit, they are then ready to make daily and we have found our small the investments readily and can reduce investment in businesses to be on the cutting edge of income taxes as well, thus creating cash new technological advancements, par- flows while they simultaneously this economy? ticularly those in southern California, upgrade their businesses. which is extremely competitive com-

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JUNE 20, 2011 AN ADVERTISING SUPPLEMENT TO THE LOS ANGELES BUSINESS JOURNAL 37

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Incorporated into our audit, tax and consulting services are the ingredients that we use to help our clients achieve success: timely communication, aggressive problem-solving and the type of personal service you expect from a first-class firm. Thomas D. Leaper Partner In-Charge RBZ Middle Market Group Phone: 310.478.4148 x450 RBZ ranks #3 on the Los RBZ is a member firm of JHI. Angeles Business Journal’s Email: [email protected] www.jhi.com “Best Places to Work” list.

www.linkedin/in/tomleaper 11755 Wilshire Boulevard, Ninth Floor, Los Angeles, California 90025-1586 www.rbz.com 2-Page Spread Single Page View Thumbnails | LABJ User Guide | Front Page | Table of Content Previous Page Zoom In Zoom Out Next Page

38 AN ADVERTISING SUPPLEMENT TO THE LOS ANGELES BUSINESS JOURNAL JUNE 20, 2011

THE BUSINESS OF ACCOUNTING

Continued from page 36 What is LEAPER: An RBZ client was engaged to everything with our JHI Affiliate in The best success provide goods and services to the South South Korea (JHI is an international story has nothing to Korean Government through a U.S.- affiliation of accounting firms). It the best based consulting firm. The services took several calls to iron out all the do with business and were to be provided both in the U.S. contract details but the bottom line is everything to do success and South Korea, and the goods were to we saved our client from a potential with the primacy come from all over the world. Two days 24.2% foreign tax, which may not of integrity and story you have before signing the agreement, they have all been creditable in the U.S., decided to send a copy to us – alerting on over $10 million of income. So the character. seen and what us to the deal. We immediately spoke moral of the story is, before signing ALAN GRIFFITH * with our resident International Tax the contract, involve your accountant have you learned expert who advised our client to divide as early as possible. the Agreement into three separate con- from it? tracts in order to avoid the potential of GRIFFITH: The best success story has paying South Korean tax on the goods nothing to do with business and and the portion of services to be pro- everything to do with the primacy of vided in the U.S. integrity and character. While every We got on a conference call with business school teaches that all busi- our client, their attorney and commu- ness enterprises have an obligation to nicated our suggested changes to the make a profit (i.e., the “end” result), Consulting Firm. Everyone agreed to what is not always clear is that the our approach and the contract was “end does not justify the means” split into three documents. There when the means involve illegal, were a few more details that had to be unethical, or otherwise destructive worked. This included confirming actions or activities.

DUBAN: The two biggest challenges that ment, understand the banks’ point of What are our clients face are obtaining sufficient view and provide information that will capital to operate or expand their busi- assist them in compiling their files and common nesses and obtaining new high quality satisfying their board and auditors. employees to manage and operate their Finally, we have learned how important difficulties businesses. Bank financing is challeng- it is to retain quality employees by ing to say the least and even though offering significant benefits and com- that you are there is increased unemployment, pensation knowing that they are in extraordinary employees are difficult to demand and that it is an extremely observing and find. In terms of financing we have competitive time for employers to * learned to be patient with banks, to attract quality employees. This has been what have you provide ALL of the information that a challenge with often decreasing rev- they request as efficiently as possible enues, but clients and customers appre- learned from and to work closely with them to insure ciate consistency in service and the financing becomes available. We offer compensation may just need to come them? to meet with them personally, to con- from the bottom line initially in order tinually follow up on requests, show to remain competitive. High quality more information than was required employees that interact well with cus- previously and understand that they are tomers and client help them to feel safe also in business to make a profit so in a very difficult environment. This there is a price to pay for expansion might be considered counterproductive capital. Further we have learned to to cash flow and budget constraints, operate in a new regulatory environ- but it is of paramount importance.

How has ANIK: International commerce has companies overseas, with most or all of Over the last two become an increasingly important area their production re-exported back to the decades, low cost labor for our clients’ growth. While interna- U.S. Now, companies are looking to sell international expansion has historically been a their products in the foreign markets, cre- was a major factor big-company dominated strategy, we are ating new challenges and opportunities driving companies tional seeing more small and mid-sized compa- for U.S. management. overseas ... Now, nies expanding operations outside the commerce U.S. Many foreign markets have experi- GRIFFITH: If a business is not involved in companies are looking enced higher growth than the U.S. over international commerce – get involved! to sell their products impacted your the past five years, and with the weak If a business is involved with interna- in the foreign * U.S. dollar, products manufactured tional commerce - get more involved! markets, creating local client domestically continue to be attractive to Becoming multi-national involves foreign companies. Additionally, we’ve many “moving parts,” but a properly new challenges. businesses? seen clients establish their own manufac- trained and experienced CPA will help JOEL ANIK turing or distribution activities abroad to overcome obstacles and maximize posi- take advantage of consumer buying tive results by, for example, making intro- power. Over the last two decades, low ductions to local-jurisdiction advisors, cost labor was a major factor driving advising on the proper legal entity struc-

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JUNE 20, 2011 AN ADVERTISING SUPPLEMENT TO THE LOS ANGELES BUSINESS JOURNAL 39

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40 AN ADVERTISING SUPPLEMENT TO THE LOS ANGELES BUSINESS JOURNAL JUNE 20, 2011

THE BUSINESS OF ACCOUNTING

Continued from page 38

ture, and assisting with recurring issues - really didn’t affect this group of clients We are routinely like transfer pricing and proper reporting. at all; they invested in local real estate, seeing companies in with local investors, and worked with the local marketplace VAN DER WELL: We are routinely seeing local financial institutions. companies in the local marketplace being As the world’s information has being impacted by the impacted by the world economies become easier and inexpensive to gath- world economies ... whether that is through sourcing of prod- er, real estate investment opportunities This has created ucts, establishment of manufacturing facil- for our clients have expanded signifi- ities or the distribution of their products. cantly. Even smaller real estate enormous complexities This has created enormous complexities investors have benefitted. Now it is for our clients. for our clients in terms of the impact of common for our mid-size real estate TODD VAN DER WELL establishing residency in foreign countries, clients to work actively with foreign the ability to obtain financing for foreign investors and financial institutions to operations, developing a plan to move hold properties locally and abroad. profits across country borders, and setting But it isn’t just our real estate clients up tax structures that will minimize their or even our larger clients who have overall tax burden across all countries. This benefitted from this internationaliza- complexity has required us to develop an tion of business; our smaller clients international organization that is seamless have as well. It used to be that the cost in the delivery of client service to our cus- of doing business internationally made tomers, expand our understanding of how doing business cross border unafford- to establish businesses in many of the able for smaller companies. However, major economies of the world and to the cost of international travel and understand the impact of international communication (does anyone remem- operations to the domestic tax and busi- ber how much per minute it used to ness operations of our clients. cost to dial overseas?) has become affordable. A small local business can LEAPER: RBZ has been servicing the easily open and operate a subsidiary in local Los Angeles community for well Colombia, source product from China, over 35 years, but it has really been or buy a rental property in Belgium. only in the past five to ten years that With opportunities like these there international commerce has signifi- come complexities and challenges. We cantly affected our clients. This has now have a dedicated group of profession- affected the way we service them. als within RBZ who assist not only our larg- As one example of how things have er international businesses and the people changed, RBZ was founded as a firm who run them, but also our long-standing catering to the real estate business, and clients who wish to take advantage of inter- to this day real estate represents a large national opportunities out there without percentage of our client base. However, getting held back by any of the tax or until recently, international commerce accounting issues surrounding them.

GRIFFITH: Educating and translating. how proactive the client chooses to be. International Financial What are IFRS is the “future language” of busi- We educate clients on the aspects of ness and clients must attain fluency. IFRS that they need to consider so that Reporting Standards you doing they can take steps now to make the is the ‘future language’ to prepare VAN DER WELL: Within our client base, process more manageable in the future. of business and clients we have been dealing with the adop- For example, if a client is preparing for must attain fluency. tion of IRFS since 2003 and have a an accounting system change, it’s your clients for team of experts who routinely deal worth the extra time to consider ALAN GRIFFITH with the IFRS and US GAAP differences. whether or not this system will work the IFRS* and Through this knowledge base, Moss for both U.S. GAAP and IFRS. But even * Adams is IFRS-ready and, as we've done companies that are less proactive are how do you for many clients, we can help compa- focused on how the FASB and IASB’s nies successfully transition from U.S. convergence projects related to leasing, think it will GAAP. Our international specialists revenue recognition and other key work closely with our clients to exam- areas may impact their business. Both affect their ine all the ramifications IFRS can have U.S. GAAP and IFRS convergence pro- on our client’s financial reports, from jects and full conversion to IFRS will businesses? vendor contracts to employee benefit result in vast organizational changes plans to incentive compensation. for companies. This is true not only in the application of accounting stan- ANIK: Many of our clients are asking for dards, but also relating to critical guidance on how they should move accounting processes, the control envi- forward given the uncertainty sur- ronment, software and system needs, rounding IFRS. The decision of how training and resource needs, and con- they move forward really depends on tractual obligations.

42 ➼

*International Financial Reporting Standards 2-Page Spread Single Page View Thumbnails | LABJ User Guide | Front Page | Table of Content Previous Page Zoom In Zoom Out Next Page

JUNE 20, 2011 AN ADVERTISING SUPPLEMENT TO THE LOS ANGELES BUSINESS JOURNAL 41

Let’s talk expertise, leader to leader.

Hands-on partners with years of technical and industry- speciﬁc expertise. Advisors who offer insights and ideas to help you make smarter business decisions. Unmatched integrity. Unsurpassed results. If that’s what you’re looking for in an accounting ﬁrm, talk to J.H. Cohn.

We turn expertise into results.

jhcohn.com . 310.477.3722

Los Angeles . Woodland Hills . San Diego Other offices in New York, New Jersey and Connecticut Scott M. Sachs, Regional Managing Partner, J.H. Cohn Joe Torre 2-Page Spread Single Page View Thumbnails | LABJ User Guide | Front Page | Table of Content Previous Page Zoom In Zoom Out Next Page

42 AN ADVERTISING SUPPLEMENT TO THE LOS ANGELES BUSINESS JOURNAL JUNE 20, 2011

THE BUSINESS OF ACCOUNTING

Continued from page 40 What GRIFFITH: All regulatory efforts share burdens and they rely on us to keep City business taxes the goal of “righting” a perceived up with new reporting regulations that are based on gross wrong. Query whether it is most effec- and opportunities. City business taxes Federal/ tive to fight it, or to find ways to work that are based on gross revenues and revenues and not net State (profitability) with it. not net income do not help when a income do not help client is already losing money and is when a client is already DUBAN: As we are primarily a tax prac- still forced to pay a significant portion regulations tice, our experience is from the point of his revenues to do business in Los losing money and is of view of income, franchise, payroll, Angeles. New State Board of Equaliza- still forced to pay a have the most sales, property, city business and tion enforcement of use taxes on out significant portion of * other tax regulations. The tax struc- of state purchases and increased his revenues to do significant ture continues to become more com- enforcement of foreign account plicated and it garners a greater share reporting have considerable impact business in Los Angeles. impact on your of a company’s resources as new ways on clients and not only can increase DENNIS DUBAN to raise revenue are implemented. As tax burdens increase, but they can clients’ busi- income taxes continue to take more also increase the dollars clients must resources, our clients are forced to dedicate to us in fulfilling their tax nesses? Why? look at all possible ways to reduce the reporting requirements.

KRAJANOWSKI Issues keeping clients up markets or products to increase margin? Our clients are fearful What issues at night include California’s economic Where do they get the capital to invest recovery. As the unemployment rate in new technology or necessary capital of what they don’t keep your remains especially high for non-skilled expenditures? Where are interest rates know. Have they made labor, and across the board in certain going? And for many business owners the best strategic clients up industries like construction, this has a trying to solidify their short- and mid- decisions to weather direct impact on consumer spending. range strategic succession plans, how at night? Another issue clients are concerned will capital gains and ordinary tax rates the next phase of with is State and Municipalities’ rules, change? And what will the estate rules the economy? regulations and fees. As governmental look like in 2013 and beyond? SCOTT SACHS * agencies scramble to post results to justi- Many are fearful of relying on credit. fy their current staffing levels, budgets, We’ve seen clients with exceptional cred- and in some cases their existence, clients it performance not be able to take advan- are left with the daunting task of navi- tage of extraordinary financing opportu- gating through these tough times with nities because of the impact of regulation little empathy from government. on business credit. There is significant liquidity in the market but the cost of SACHS: Our clients are fearful of what non-bank capital is high, forcing clients they don’t know. Have they made the to work harder for less return. With the best strategic decisions to weather the abundance of Federal and State regula- next phase of the economy? If there is a tions pending, including healthcare, second dip, do they need to make more there is still significant uncertainty, and drastic changes? How do they find new it’s causing paralysis at all levels.

What do you SACHS: Beyond IFRS, which has enormous impact, compliance relating to anticipate is the proposed lease capitalization, financial statement presentation, and other the next accounting rules will require concentrat- ed client support. Individually or com- big compliance- bined, these rules will recast the way financial statements are presented and driven event? will have a significant impact on * accounting systems design, reporting, financial contracts, and taxes.

KRAJANOWSKI: Planning for tax (including LLC’s) and S corporations in How does changes in today’s political environ- which the individual pay’s the tax on ment can be tricky. With a mounting the profits of the business. Businesses a company state deficit, the California legislature can pay the increased taxes as a cost of generally will look to either raising doing business in the state or look to plan for taxes or cutting back on state employ- alternatives such as moving the busi- ees and/or their benefits. The latter is ness to a friendlier state, converting a tax changes more difficult due to the influence of pass through entity into a C Corpora- labor unions. Therefore, businesses tion (assuming the tax rate at the cor- given the state’s should plan for an increase in taxes porate level is less than the individual * either at the business and/or individual level which is currently the case) political level. In fact, a significant amount of and/or outsource part of its operations businesses operate through pass to countries with an educated work- landscape? through entities such as partnerships force that are business friendly such as 44 ➼ 2-Page Spread Single Page View Thumbnails | LABJ User Guide | Front Page | Table of Content Previous Page Zoom In Zoom Out Next Page

JUNE 20, 2011 AN ADVERTISING SUPPLEMENT TO THE LOS ANGELES BUSINESS JOURNAL 43

Success usually comes to those who are too busy to notice.

THE MISSION of our ﬁrm has been to provide outstanding service and meaningful guidance in the areas of income tax planning, tax return preparation, accounting and business management to a select number of clients who require and value personal service, superior technical expertise and a professional staff who is attentive to their needs.

We will also assist with financial management, retirement and estate planning utilizing a holistic approach that emphasizes the functional relationship between all areas of our clients’ fi nancial life. We endeavor to accomplish this in an extraordinary environment, filled with caring people, that nurtures both the client and our team members.

For more information call Managing Partner Dennis L. Duban 4250 Wilshire Boulevard or Partner Troy L. Sattler at 323.937.2010 or visit us at www.dubansattlercpas.com Los Angeles CA 90010 2-Page Spread Single Page View Thumbnails | LABJ User Guide | Front Page | Table of Content Previous Page Zoom In Zoom Out Next Page

44 AN ADVERTISING SUPPLEMENT TO THE LOS ANGELES BUSINESS JOURNAL JUNE 20, 2011

THE BUSINESS OF ACCOUNTING

Continued from page 42

India and the Philippines. There are DUBAN: Typically, a company tried to Companies benefiting costs associated with any decision, how- plan for increased taxes by considering from California ever, as California is one of the highest tax reduction opportunities, prudent tax taxing states in the nation, the cost of planning and by taking advantage of Enterprise Zone hiring change becomes less than the cost of legislated tax benefits. Now, with signifi- credits should think doing nothing. cant economic issues and government about accelerating the budget deficits in California threatening vouchering process ANIK: Companies benefiting from Cali- the economy and warranting tax fornia Enterprise Zone hiring credits increases, businesses must look at to perfect the credit should think about accelerating the whether it is feasible to remain in Cali- from prior years. vouchering process to perfect the cred- fornia or relocate to a state with a more JOEL ANIK it from prior years. Governor Brown favorable tax structure. The costs of has proposed significant limits to moving are no longer as prohibitive as vouchering on a lookback basis. Also, the taxes of remaining, and although companies should watch for potential moving was not formerly in the vocabu- mandatory single sales factor appor- lary of business owners and advisors, it tionment for California income tax is now, with so many states offering purposes. An effort is underway to take incentives that outweigh the costs of away the single sales factor election in relocating businesses. If taxes continue favor of requiring all taxpayers to use to increase exponentially, businesses that method. must be prepared to move.

How ANIK: With the recent economic condi- success and not simply another over- The services provided tions and increased capacity within the head item. Commonly stated, Benefits - by accounting firms accounting profession, there has been a Cost = Value. From this perspective, should focus on fee reduction that has had price becomes a fraction of the value are often viewed as companies many companies using price as a prima- equation. commodities. Your ry (and sometimes sole) criteria for accounting firm LEAPER: selecting a firm. While competitive fees The services provided by could, and should, be evaluate their are important, companies would be well accounting firms are often viewed as served to consider additional criteria commodities. Your accounting firm much more than that. accounting that ultimately contribute to value such could, and should, be much more than To get the most out of * as: cultural fit, growth stage, business that. To get the most out of this essen- this essential business firms? complexity and industry. tial business relationship, look to your An entrepreneurial company won’t accounting firm’s industry expertise, relationship, look necessarily be well served by a firm that professional relationships, and its peo- to your accounting focuses on working with mature well ple to gauge the value you receive. firm’s industry established organizations. A company Rather than engaging a firm that expertise, professional considering an exit strategy should seek wants to be everything to everybody, to work with a firm that enjoys a strong emphasis should be placed on retaining relationships, and its reputation in the capital markets. Com- a firm that has identified specific indus- people to gauge the plex international issues are best try niches where their knowledge and value you receive. addressed by a firm capable of coordi- experience runs deep. Firms of this THOMAS LEAPER nating consistent service delivery in the nature will be able to provide valuable geographies where a company is operat- advice as it relates to your business, and ing or looking to expand. When a firm ultimately your bottom line. has deep experience in an industry, Your accounting firm should have they not only know how to address a well developed networks of profession- company’s unique accounting issues als and specialists to call on when the but will bring additional ideas and rec- need arises. It may sound cliché, but ommendations based on the industry business is all about who you know. best practices. Access to sound relationships is a valu- When a firm is a solid match for a able asset that a reputable accounting company and is committed to deliver- firm can provide to your company. ing quality service, clients receive much As for people, let’s face it, account- more than basic compliance services, ing, along with most businesses rely they have a trusted advisor on their side. heavily on human capital. Companies A good fit makes for a more efficient should attribute value to their relation- approach to service delivery and reduces ships with their Firm’s partners and the time and stress on the company’s engagement team. Check out the cul- staff. With relevant and current experi- ture of your accounting firm. Is ence dealing with the issues, companies turnover high? Does it attract quality can expect very prompt and reliable professionals? Does this impact the answers to their toughest questions. client service you receive? You’d be sur- Beyond all of this, the right firm will prised how much value this adds to be perceived as a resource for a client’s your engagement.

Thanks to all the participants! 2-Page Spread Single Page View Thumbnails | LABJ User Guide | Front Page | Table of Content Previous Page Zoom In Zoom Out Next Page

JUNE 20, 2011 AN ADVERTISING SUPPLEMENT TO THE LOS ANGELES BUSINESS JOURNAL 45 2-Page Spread Single Page View Thumbnails | LABJ User Guide | Front Page | Table of Content Previous Page Zoom In Zoom Out Next Page

46 LOS ANGELES BUSINESS JOURNAL INVESTMENTS & FINANCE JUNE 20, 2011

THE LABJ STOCK INDEX TRACKING LOS ANGELES AREA COMPANIES

WEEKLY TOP GAINERS WEEKLY TOP LOSERS

Boingo Wireless Inc.* National Technical Systems Inc. U.S. China Mining Group Inc. Capstone Turbine Corp. $15 $10 $8 $2.5

May 3, 2011 June 15, 2010 $13.50 7 $5.15 9 June 15, 2011 June 15, 2011 $7.32 June 15, 2011 2.0 $3.20 12 $9.51 6 June 15, 2010 8 $1.05 5 1.5 7 9 4 June 15, 2010 1.0 6 $6.30 3 June 15, 2011 $1.42

6 5 2 0.5 5/3 5/11 5/18 5/25 6/1 6/8 6/15 6/10 8/10 10/10 12/10 2/11 4/11 6/11 6/10 8/10 10/10 12/10 2/11 4/11 6/11 6/10 8/10 10/10 12/10 2/11 4/11 6/11 *IPO May 3, 2011

TOP TEN LOCAL GAINERS BY PERCENTAGE (with closing prices at least $1) TOP TEN LOCAL LOSERS BY PERCENTAGE (with opening prices at least $1) June 15 June 8 Price 1-Wk 52-Wk June 15 June 8 Price 1-Wk 52-Wk Company Close Close Change % Chg. % Chg. Company Close Close Change % Chg. % Chg. Boingo Wireless Inc...... $9.51 $7.41 $2.10 28.3% NA U.S. China Mining Group Inc...... $3.20 $3.95 -$0.75 -19.0% -37.9% National Technical Systems Inc...... 7.32 6.30 1.02 16.2% 17.3% Capstone Turbine Corp...... 1.42 1.64 -0.22 -13.4% 35.2% Derycz Scientific Inc...... 3.00 2.65 0.35 13.2% 215.8% Response Genetics Inc...... 2.67 3.05 -0.38 -12.5% 6.8% Demand Media Inc...... 14.74 13.11 1.63 12.4% NA Physicians Formula Holdings Inc...... 3.92 4.46 -0.54 -12.1% 4.5% Korn/Ferry International ...... 22.95 20.78 2.17 10.4% 42.6% Hanmi Financial Corp...... 0.99 1.12 -0.13 -11.4% -41.7% Pacific Office Properties Trust Inc...... 2.20 2.05 0.15 7.3% -45.7% Taitron Components Inc...... 1.18 1.32 -0.14 -10.6% 7.3% Thomas Properties Group Inc...... 3.34 3.15 0.19 6.0% -16.7% Salem Communications Corp...... 3.16 3.50 -0.34 -9.7% -13.3% Live Nation Entertainment Inc...... 10.88 10.27 0.61 5.9% -11.9% THQ Inc...... 3.34 3.64 -0.30 -8.2% -34.8% Teledyne Technologies Inc...... 47.01 44.46 2.55 5.7% 19.9% Overhill Farms Inc...... 5.50 5.97 -0.47 -7.9% -11.9% Simulations Plus Inc...... 2.95 2.81 0.14 5.0% 31.7% CB Richard Ellis Group Inc...... 22.94 24.89 -1.95 -7.8% 45.7%

MARKET DIARY MARKET INDEXES Mixed economic news – better-than-expected housing starts and fears about the situation in Europe – left the markets down June 15 June 8 Point 1-Wk 52-Wk only slightly for the week ended June 15. The Dow Jones industrial average and S&P 500 fell a bit more than 1 percent each, Index Close Close Change % Chg. % Chg. and the Nasdaq was off 1.6 percent. The LABJ Index fell 1.3 percent as 99 stocks declined and 66 advanced. Capstone Tur- Dow Jones Industrial ...... 11,897.27 12,048.94 -151.67 -1.3% 14.3% bine Corp. fell 13 percent to $1.42 even though the Chatsworth maker of micro-turbines reported a narrower fiscal year loss. Hanmi Financial Corp. fell 11 percent to 99 cents when a pending agreement with South Korea’s Woori Finance Holdings, Co. NASDAQ ...... 2,631.46 2,675.38 -43.92 -1.6% 14.1% Ltd. was terminated. The beleaguered stock of newly public L.A. Internet hotspot provider Boingo Wireless Inc. was the S&P 500 ...... 1,265.42 1,279.56 -14.14 -1.1% 13.5% biggest gainer after four Wall Street analysts recommended the stock. Shares jumped 28 percent to $9.51. LABJ Index ...... 122.92 124.55 -1.63 -1.3% 7.1%

MARKET SUMMARY DIVIDEND YIELD MOST ACTIVE STOCKS VOLUME WEEKLY SUMMARY Company Dividend Yield Dividend Weekly Close Walt Disney Co...... 10,110,090 Advances ...... 66 Scope Industries ...... 30.7% $66.0 $215.0 Activision Blizzard Inc...... 7,529,734 Declines ...... 99 Stamps.com Inc...... 16.2% $2.0 $12.3 DirecTV ...... 5,383,249 Unchanged ...... 17 Anworth Mortgage Asset Corp...... 13.1% $0.9 $7.3 KB Home ...... 4,311,443 New Highs ...... 1 PennyMac Mortgage Investment Trust ...... 9.6% $1.6 $16.7 Occidental Petroleum Corp...... 4,271,037 New Lows ...... 13 BreitBurn Energy Partners LP ...... 8.3% $1.6 $19.4

LABJ INDEX

LABJ Index, 52 weeks LABJ Index v. S&P 500, 5 days LABJ Index v. S&P 500, 52 weeks 150 1.2 25

0.9 20 SP 500 0.6 LABJ Index 15 0.3

0.0 10 120 -0.3 June 15, 2011 5 122.92 -0.6 0 -0.9 SP 500 -1.2 -5 LABJ Index

90 -1.5 -10 J J A S O N D J F M A M J 6/9 6/10 6/13 6/14 6/15 J J A S O N D J F M A M J

Note: The LABJ Stock Index includes all companies on the opposite page and is weighted by market cap.

For more information please contact: Data provided by Bloomberg, a source considered to be reliable. However, the information in this feature may not be complete James Hillman, Managing Director (213) 553-9748 and cannot be guaranteed. The information provided in this feature does not constitute the provision of investment advice. 2-Page Spread Single Page View Thumbnails | LABJ User Guide | Front Page | Table of Content Previous Page Zoom In Zoom Out Next Page

JUNE 20, 2011 INVESTMENTS & FINANCE LOS ANGELES BUSINESS JOURNAL 47

THE LABJ STOCK INDEX TRACKING LOS ANGELES AREA COMPANIES TOP GAINERS TOP LOSERS Company June 15 1-Wk YTD 52-Wk P.E. Mkt. Cap Company June 15 1-Wk YTD 52-Wk P.E. Mkt. Cap Name Ticker Close % Chg % Chg % Chg Ratio (millions) Name Ticker Close % Chg % Chg % Chg Ratio (millions)

AEROSPACE/DEFENSE RadNet Inc. RDNT $4.70 4.2% 66.7% 70.3% NA $175.4 Aerovironment Inc. AVAV $28.79 0.1% 7.3% 13.8% 26.7 $630.4 VCA Antech Inc. WOOF 21.45 -2.3% -7.9% -20.9% 16.5 1,853.8 AML Communications Inc. AMLJ 2.49 0.0% 85.8% 72.9% 22.6 26.7 INSURANCE Ducommun Inc. DCO 19.30 0.5% -11.4% 1.0% 12.5 203.3 Mercury General Corp. MCY 38.68 -2.3% -10.1% -9.9% 19.7 2,120.3 Flamemaster Corp. FAME NA NA 2.0% 31.6% 10.7 6.3 Unico American Corp. UNAM 9.98 4.6% 9.2% 8.0% 18.1 53.2 Northrop Grumman Corp. NOC 63.50 0.6% 8.1% 15.7% 9.8 17,598.2 Wesco Financial Corp. WSC 382.00 -0.1% 3.7% 11.9% 55.8 2,719.8 Teledyne Technologies Inc. TDY 47.01 5.7% 6.9% 19.9% 14.4 1,726.6 INTERNET APPAREL Bidz.com Inc. (L) BIDZ 0.84 -8.7% -30.7% -50.3% NA 16.3 American Apparel Inc. APP 0.87 0.6% -47.6% -57.1% NA 72.0 Boingo Wireless Inc. (L) WIFI 9.51 28.3% NA NA NA 314.9 Cherokee Inc. CHKE 16.82 -7.8% -10.6% -8.5% 18.3 143.1 CrowdGather Inc. CRWG 0.81 3.8% -48.4% -32.5% NA 46.1 Guess? Inc. GES 40.67 1.7% -14.1% 16.6% 13.6 3,765.7 J2 Global Communications Inc. JCOM 28.20 0.1% -2.6% 22.0% 13.2 1,296.8 Hot Topic Inc. HOTT 7.13 1.1% 13.4% 31.5% 118.8 319.1 ReachLocal Inc. RLOC 17.32 1.7% -13.0% 21.7% NA 487.8 Joe's Jeans Inc. (L) JOEZ 0.76 1.9% -50.8% -66.5% 25.5 49.3 Spark Networks Inc. LOV 3.31 0.6% 11.4% -7.3% 25.5 68.1 K-Swiss Inc. KSWS 9.66 2.1% -22.5% -22.7% NA 341.8 Stamps.com Inc. STMP 12.33 3.8% -6.9% 32.0% 22.8 176.8 People's Liberation Inc. PPLB 0.13 0.0% 18.2% 8.3% NA 4.7 United Online Inc. UNTD 5.61 0.5% -15.0% -16.5% 8.9 497.3 Skechers U.S.A. Inc. (L) SKX 13.85 -0.4% -30.8% -67.7% 7.4 689.6 ValueClick Inc. VCLK 16.45 0.4% 2.6% 40.1% 15.5 1,294.3 True Religion Apparel Inc. TRLG 25.44 2.0% 14.3% -8.3% 13.5 655.8 MANUFACTURING AUTOMOTIVE/PLASTICS/METALS Avery Dennison Corp. AVY 36.47 -2.1% -13.9% 2.5% 12.1 3,897.7 Motorcar Parts of America Inc. MPAA 15.01 -1.6% 15.1% 120.7% 14.4 186.7 BioSolar Inc. BSRC 0.13 4.0% 35.4% -27.8% NA 20.9 Reliance Steel & Aluminum Co. RS 47.18 0.9% -7.7% 3.4% 14.6 3,530.0 Cereplast Inc. CERP 4.53 -7.0% 9.4% 32.5% NA 71.4 Superior Industries International Inc. SUP 19.96 -1.1% -5.9% 30.6% 9.9 538.3 Dole Food Co Inc. DOLE 12.94 -0.1% -4.2% 19.8% NA 1,146.2 US Auto Parts Network Inc. PRTS 7.07 -0.7% -15.8% -6.0% 70.7 215.9 Ever-Glory International Group Inc. EVK 2.04 -7.7% -3.3% -34.0% 3.8 30.1 BIOMEDICAL/PHARMACEUTICAL Farmer Bros Co. FARM 9.00 3.7% -49.4% -46.1% NA 145.8 Amgen Inc. AMGN 57.89 -1.8% 5.4% 5.0% 12.1 53,822.1 Jakks Pacific Inc. JAKK 17.68 -3.4% -3.0% 21.5% 17.5 481.0 Arrowhead Research Corp. (L) ARWR 0.50 -8.3% -44.1% -70.1% NA 35.9 Mattel Inc. MAT 25.63 1.6% 0.8% 15.1% 14.2 8,908.7 CytRx Corp. CYTR 0.79 -4.5% -22.0% -15.3% NA 86.1 OSI Systems Inc. OSIS 38.51 -2.2% 5.9% 33.9% 23.6 733.7 Iris International Inc. IRIS 9.12 1.8% -10.9% -17.7% 59.2 162.3 Overhill Farms Inc. OFI 5.50 -7.9% -4.5% -11.9% 16.7 87.0 MannKind Corp. MNKD 3.74 -1.6% -53.6% -38.9% NA 488.8 Reed's Inc. REED 2.04 -0.3% 1.5% -6.0% NA 22.1 Obagi Medical Products Inc. OMPI 9.12 -3.7% -21.0% -30.5% 13.0 168.7 Virco Manufacturing VIRC 2.82 -0.1% 6.7% -8.8% NA 40.0 Oxis International Inc. OXIS 0.08 -13.7% -43.4% -31.7% NA 15.7 MEDIA/LEISURE/ENTERTAINMENT Physicians Formula Holdings Inc. FACE 3.92 -12.1% 4.3% 4.5% 196.0 53.3 Crown Media Holdings Inc. CRWN 1.70 -7.1% -35.1% -5.6% 17.0 611.4 Response Genetics Inc. RGDX 2.67 -12.5% 7.7% 6.8% NA 49.0 Daily Journal Corp. DJCO 73.20 -1.7% 1.7% 3.1% 12.8 101.1 Staar Surgical Co. STAA 5.13 -2.1% -15.9% -1.0% NA 182.3 Demand Media Inc. (L) DMD 14.74 12.4% NA NA NA 1,226.5 COMPUTERS/PERIPHERALS/ELECTRONICS Derycz Scientific Inc. DYSC 3.00 13.2% 13.2% 215.8% NA 50.5 Aura Systems Inc. AUSI 0.69 0.0% -8.0% -16.9% NA 42.5 DirecTV DTV 46.86 -1.4% 17.4% 19.4% 17.2 35,978.4 DreamWorks Animation SKG Inc. (L) DWA 21.38 -2.8% -27.5% -26.8% 4.3 1,805.3 International Rectifier Corp. IRF 25.30 -2.7% -14.8% 18.9% 13.3 1,764.9 DTS Inc. DTSI 41.23 1.7% -15.9% 18.5% 42.9 717.5 Ixia XXIA 13.01 -6.1% -22.5% 33.6% 54.2 893.8 Entravision Communications Corp. EVC 1.92 -2.0% -25.3% -29.9% 38.4 164.1 MRV Communications Inc. MRVC 1.27 -3.8% -29.1% 1.6% 18.1 200.0 Image Entertainment Inc. DISK 0.16 0.0% 14.3% -27.3% NA 40.9 PC Mall Inc. MALL 7.67 -5.3% 1.3% 60.5% 11.3 95.1 Lions Gate Entertainment Corp. LGF 6.14 0.2% -5.7% -12.2% NA 841.2 Power-One Inc. PWER 8.08 -1.8% -20.8% 6.0% 6.6 837.3 Live Nation Entertainment Inc. LYV 10.88 5.9% -4.7% -11.9% NA 1,978.6 Qualstar Corp. QBAK 1.75 -4.4% 3.6% -4.9% NA 21.4 NeuMedia Inc. MNDL 0.46 2.2% 58.6% 100.0% NA 16.6 Semtech Corp. SMTC 25.10 -5.5% 10.9% 37.9% 19.2 1,640.8 Point.360 PTSX 0.48 -4.0% -45.5% -73.5% NA 5.2 Taitron Components Inc. TAIT 1.18 -10.6% -25.3% 7.3% NA 6.5 Provision Holding Inc. PVHO 0.05 -20.2% -24.2% -54.5% NA 2.1 Trio Tech International (L) TRT 3.30 -5.7% -20.9% -21.2% 14.3 11.0 Reading International Inc. RDI 4.65 -1.5% -7.9% 18.6% NA 108.1 Vitesse Semiconductor Corp. VTSS 4.24 -0.9% 1.2% -34.8% 4.2 103.6 RealD Inc. RLD 24.27 1.7% -6.4% NA NA 1,314.7 CONSTRUCTION/ENGINEERING Salem Communications Corp. SALM 3.16 -9.7% -0.3% -13.3% 28.7 76.7 Aecom Technology Corp. ACM 27.47 -0.1% -1.8% 8.4% 13.0 3,274.4 Sports Club Inc. SCYL NA NA NA NA NA NA Ameron International Corp. AMN 62.15 3.3% -18.6% -0.6% 35.1 567.9 Stratus Media Group Inc. SMDI 0.69 13.1% 7.8% -55.8% NA 44.3 Jacobs Engineering Group Inc. JEC 41.18 -2.1% -10.2% -1.5% 16.7 5,222.1 Tix Corp. TIXC 1.75 0.6% 41.1% 47.0% 43.8 54.5 KB Home KBH 10.94 1.7% -18.9% -16.8% NA 842.1 Walt Disney Co. DIS 38.39 -2.1% 2.3% 9.7% 16.8 72,563.0 Ryland Group Inc. RYL 16.04 -1.6% -5.8% -6.2% NA 711.8 MISC. SERVICES Tetra Tech Inc. TTEK 21.58 -1.4% -13.9% -1.2% 16.3 1,345.4 Air Lease Corp. AL 25.78 4.6% NA NA NA 2,583.6 Tutor Perini Corp. TPC 19.60 1.0% -8.5% 10.2% 10.6 923.6 Cadiz Inc. CDZI 10.75 0.6% -13.6% -18.7% NA 148.6 ENERGY/UTILITIES Electro Rent Corp. ELRC 15.70 1.1% -2.8% 15.3% 18.7 376.5 American States Water Co. AWR 33.25 -0.8% -3.5% 0.3% 16.0 620.5 Enova Systems Inc. ENA 0.84 -0.7% -34.5% -15.1% NA 26.5 BNK Petroleum Inc. BNKPF 4.96 -0.7% 44.6% 152.2% NA NA Korn/Ferry International KFY 22.95 10.4% -0.7% 42.6% 17.7 1,077.9 BreitBurn Energy Partners LP BBEP 19.37 -0.1% -3.8% 29.8% 41.2 1,143.6 National Technical Systems Inc. (L) NTSC 7.32 16.2% -9.3% 17.3% 73.2 75.0 Capstone Turbine Corp. CPST 1.42 -13.4% 47.9% 35.2% NA 368.2 NetSol Technologies Inc. NTWK 1.38 -3.5% -26.2% 60.5% 7.7 76.4 Edison International EIX 38.71 -0.4% 0.3% 15.0% 11.8 12,612.2 On Assignment Inc. ASGN 9.08 -4.2% 11.4% 63.6% 64.9 335.6 Occidental Petroleum Corp. OXY 102.15 -0.3% 4.1% 17.8% 16.2 83,035.1 Rentech Inc. RTK 0.89 8.6% -27.0% -13.6% NA 198.3 U.S. China Mining Group Inc. SGZH 3.20 -19.0% -49.7% -37.9% 3.4 60.5 Scope Industries SCPJ 215.00 NA 66.7% 70.6% 66.6 214.7 FINANCIAL SERVICES UTi Worldwide Inc. UTIW 19.20 -0.9% -9.4% 36.0% 27.4 1,970.9 1st Century Bancshares Inc. FCTY 3.52 NA -14.1% 5.1% NA 32.8 REAL ESTATE American Business Bank AMBZ 23.95 4.1% 7.5% 9.8% 11.7 104.7 Alexandria Real Estate Equities Inc. ARE 76.15 -2.7% 3.9% 4.6% 25.4 4,703.3 Anworth Mortgage Asset Corp. ANH 7.25 -1.1% 3.6% 4.5% 8.5 917.4 CB Richard Ellis Group Inc. CBG 22.94 -7.8% 12.0% 45.7% 29.8 7,455.2 Bank of Santa Clarita BSCA 7.85 -6.0% 12.9% 20.8% 39.3 17.3 Douglas Emmett Inc. DEI 19.31 -4.5% 16.3% 17.7% NA 2,402.6 Beach Business Bank BBBC 5.95 0.3% 19.0% 10.2% NA 24.1 HCP Inc. HCP 35.94 -1.5% -2.3% 4.6% 33.3 14,592.6 Broadway Financial Corp. BYFC 2.36 0.4% -2.9% -5.0% NA 4.1 Hudson Pacific Properties Inc. HPP 15.11 -2.0% 0.4% NA NA 507.1 California United Bank CUNB 12.25 -1.2% -0.8% 13.4% NA 60.5 Intergroup Corp. INTG 22.85 3.0% 5.7% 49.4% 6.0 54.7 Cathay General Bancorp CATY 14.81 -1.5% -11.3% 34.5% 22.1 1,164.6 Kennedy-Wilson Holdings Inc. (H) KW 11.58 -2.2% 15.9% 3.9% NA 465.3 Center Financial Corp. CLFC 5.60 -3.4% -26.1% -5.4% 12.4 223.5 Kilroy Realty Corp. KRC 38.13 -3.8% 4.6% 12.4% 254.2 2,229.0 City National Corp. CYN 52.47 -1.2% -14.5% -8.7% 18.4 2,790.3 LTC Properties Inc. LTC 26.65 -6.4% -5.1% 3.7% 24.0 808.4 Colony Financial Inc. CLNY 17.99 -0.6% -10.1% -1.0% 12.3 588.9 Macerich Co. MAC 49.32 -5.6% 4.1% 14.1% 182.7 6,456.0 East West Bancorp Inc. EWBC 18.61 1.3% -4.8% 9.5% 15.0 2,767.7 Meruelo Maddux Properties Inc.* MMPIQ 0.57 11.8% 103.6% 165.1% NA 50.2 Farmers & Merchants Bank FMBL 4250.00 -0.1% 7.1% 6.9% 10.1 556.4 MPG Office Trust Inc. MPG 2.77 3.0% 0.7% -12.1% NA 135.9 First California Financial Group Inc. FCAL 3.58 1.7% 27.9% 23.9% NA 101.7 Pacific Office Properties Trust Inc. PCE 2.20 7.3% -47.2% -45.7% NA 42.6 General Finance Corp. GFN 2.83 -1.7% 42.9% 111.2% NA 62.3 Portsmouth Square Inc. PRSI NA NA 4.3% 2.1% 6.3 17.6 Great American Group Inc. GAMR 0.30 0.0% -38.8% -81.8% NA 9.2 PS Business Parks Inc. PSB 52.48 -6.3% -5.8% -5.8% 29.6 1,297.0 Green Dot Corp. GDOT 33.82 3.5% -40.4% NA 35.2 1,416.3 Public Storage PSA 109.71 -5.6% 8.2% 17.2% 38.8 19,639.3 Hanmi Financial Corp. HAFC 0.99 -11.4% -13.7% -41.7% NA 150.0 Santa Fe Financial Corp. SFEF NA NA 21.1% 33.3% 177.8 19.9 Kaiser Federal Financial Group Inc. KFFG 11.97 -2.0% 3.4% -6.6% 13.6 114.4 Thomas Properties Group Inc. TPGI 3.34 6.0% -20.9% -16.7% NA 170.0 Malaga Financial Corp. MLGF 14.75 -1.7% -3.3% -11.8% 8.1 85.5 RESTAURANTS/RETAIL/GROCERY Manhattan Bancorp MNHN 4.00 -5.9% -22.3% -27.3% NA 16.0 99 Cents Only Stores NDN 20.33 0.2% 27.5% 46.6% 19.0 1,431.9 Mission Valley Bancorp MVLY NA NA 16.0% -1.1% NA 19.6 Arden Group Inc. ARDNA 85.08 0.0% 3.1% -4.8% 14.4 261.3 Nara Bancorp Inc. NARA 7.19 -4.0% -27.0% -13.5% NA 273.2 Big 5 Sporting Goods Corp. (L) BGFV 7.95 -4.1% -47.9% -44.7% 8.7 174.8 NCAL Bancorp NCAL NA NA -5.0% -22.4% NA 22.4 California Pizza Kitchen Inc. CPKI 18.44 0.2% 6.7% -1.7% 22.5 453.4 Pacific Commerce Bank PFCI NA NA 8.3% -13.3% NA 7.9 Cheesecake Factory Inc. CAKE 30.25 3.2% -1.3% 17.5% 20.7 1,746.9 PacWest Bancorp PACW 19.60 1.4% -8.3% -1.7% 217.8 695.1 DineEquity Inc. DIN 48.29 2.0% -2.2% 42.7% 28.9 894.6 PennyMac Mortgage Investment Trust PMT 16.74 -0.6% -7.8% 1.3% 9.8 464.8 Grill Concepts Inc. GLLC 0.30 0.0% 3.4% -14.3% NA 2.6 Preferred Bank PFBC 1.50 -0.7% -14.8% -30.0% NA 99.0 Jerry's Famous Deli Inc. (L) DELI 1.50 NA -57.1% -50.0% 4.8 7.0 Saehan Bancorp SAEB 0.30 NA -23.1% -53.8% NA 56.7 Sport Chalet Inc. SPCHB 2.30 0.0% -38.5% -16.1% NA 29.4 SearchMedia Holdings Ltd. IDI 1.90 -2.1% -38.9% -46.5% NA 39.6 SOFTWARE Wilshire Bancorp Inc. WIBC 2.99 1.0% -60.8% -68.7% NA 196.8 Activision Blizzard Inc. ATVI 11.16 -1.8% -10.3% -1.6% 18.3 12,768.9 HEALTH CARE Cornerstone OnDemand Inc. CSOD 18.53 1.5% NA NA NA 880.9 Health Net Inc. HNT 30.36 -0.1% 11.2% 10.7% 12.4 2,747.4 CyberDefender Corp. (L) CYDE 1.68 -6.7% -45.1% -63.4% NA 47.3 Herbalife Ltd. HLF 54.05 2.4% 58.1% 125.6% 20.7 6,444.8 Guidance Software Inc. GUID 7.44 -2.6% 3.5% 27.2% NA 188.3 Imaging3 Inc. IMGG 0.08 2.5% -46.4% -78.5% NA 31.2 Peerless Systems Corp. PRLS 3.45 4.5% 9.5% 25.0% 18.2 12.0 IPC The Hospitalist Co Inc. IPCM 46.05 -1.4% 18.0% 73.4% 29.1 753.8 Simulations Plus Inc. SLP 2.95 5.0% 9.7% 31.7% 19.7 45.5 Molina Healthcare Inc. MOH 25.68 -0.7% 38.3% 38.4% 17.8 1,177.6 THQ Inc. (L) THQI 3.34 -8.2% -44.9% -34.8% NA 228.2

NOTES ON STOCK TABLES (H) Stock hit new 52-week high (L) Stock hit new 52-week low (S) Stock split during week *Reorganizing under Chapter 11 2-Page Spread Single Page View Thumbnails | LABJ User Guide | Front Page | Table of Content Previous Page Zoom In Zoom Out Next Page

48 LOS ANGELES BUSINESS JOURNAL JUNE 20, 2011 Port of Long Beach Sets ECONOWATCH L.A.COUNTY Sail for New Headquarters %± from GENERAL INDICATORS Latest Previous previous Year %± from period period period ago year ago LOCATION: Officials are Employment (000’s) (Apr.)1 ...... 4,322.8 4,261.9 +1.4% 4,284.8 +0.9% REAL Unemployment (000’s) (Apr.)1 ...... 575.7 590.7 -2.5% 587.6 -2.0% mulling purchase or lease ESTATE Film Production Days (1st qtr.)2 ...... 11,604 11,712 -0.9% 11,087 +4.7% Bankruptcies of 1 World Trade Center. JACQUELYN Chapter 7 (Apr.)...... 3,609 4,043 -10.7% 3,680 -1.9% RYAN Chapter 11 (Apr.) ...... 57 47 +21.3% 38 +50.0% FFICIALS at the Port of Long Beach are close to finalizing negotiations with Trade3 O Legacy Partners Inc. to make a new Downtown Philanthropy Exports (mils.) (Apr.) ...... $10,397.0 $10,451.0 -0.5% $8,694.7 +19.6% home at that city’s largest office tower, 1 World Trade Center. The California Community Foundation Imports (mils.) (Apr.) ...... $26,441.8 $25,606.8 +3.3% $18,880.3 +40.0% The two parties met behind closed doors is moving and expanding in downtown Los Air cargo4 June 13 to discuss whether to lease or pur- Angeles. LAX (Apr.)...... 155.1 174.7 -11.2% 165.3 -6.2% chase the 27-story building between the Hilton One of the county’s largest charitable Burbank (Mar.) ...... 8.7 7.1 +22.5% 8.5 +2.4% Long Beach & Executive Meeting Center and foundations, the non-profit signed a 10-year 5 Container volume (000’s) Long Beach City Hall, only a few blocks from lease for 26,336 square feet at Figueroa Long Beach (Apr.) ...... 531.1 412.2 +28.8% 485.1 +9.5% the port. Sources familiar with the deal but Courtyard. The deal, inked last month, is val- Los Angeles (Apr.) ...... 617.3 600.8 +2.7% 595.3 +3.7% who were not authorized to speak said that ued at $8 million. Los Angeles CPI (Apr.) ...... 233.3 232.2 +0.5% 225.9 +3.3% negotiations have leaned toward a purchase U.S. Bank owns the five-building, low- and that a decision should be reached within rise complex at 221 S. Figueroa St. near the the next two weeks. corner of Third Street and the Harbor (110) %± from The port has outgrown its 48-year-old Freeway. Other tenants include the Associat- REAL ESTATE Latest Previous previous Year %± from building at 925 Harbor Plaza, requiring it to ed Press and the Los Angeles Department of period period period ago year ago put trailers in the parking lot. The structure Water & Power. Construction lending (mils.) (Apr.) ...... $121.9 $169.3 -28.0% $120.1 +1.5% also needs substantial retrofits to bring it up to The foundation is leaving its headquarters Property acquisition lending (mils.)6 (Apr.) ...... $1,698.8 $1,800.7 -5.7% $1,951.7 -13.0% seismic code. The port occupies about 90,000 at Union Bank Plaza, 445 S. Figueroa, and is Refinance lending (mils.) (Apr.)7 ...... $3,716.4 $5,104.2 -27.2% $3,737.1 -0.6% square feet, not including the trailers. taking an entire floor at its new office, the for- Foreclosures mer executive offices of California National Number (Apr.) ...... 2,309 2,937 -21.4% 3,096 -25.4% Bank, which U.S. Bank acquired last year. Value (mils.) (Apr.) ...... $604.4 $1,011.6 -40.3% $1,008.6 -40.1% Chris Runyen, senior managing director Building contracts (mils.) of Charles Dunn Co.’s downtown office, Residential (Apr.) ...... $160.2 $152.8 +4.8% $229.8 -30.3% represented both tenant and landlord. He said Nonresidential (Apr.) ...... $218.8 $260.3 -15.9% $262.0 -16.5% the foundation, which has 65 employees, liked the space because it is 10,000 square Building permits (mils.) feet bigger than existing headquarters, giving Residential (Apr.) ...... $237.6 $425.8 -44.2% $253.6 -6.3% it room to grow. Nonresidential (Apr.) ...... $232.4 $265.7 -12.5% $312.3 -25.6% The foundation, which provides grants to Housing start permits (Apr.) ...... 544 1,734 -68.6% 587 -7.3% social service agencies, is the eighth largest Home sales (Mar.) ...... 4,258 3,371 +26.3% 4,849 -12.2% charitable foundation in Los Angeles County, Home prices (000’s) (Mar.) ...... 330 325 +1.5% 340 -2.9% with more than $1 billion in assets, according Condo sales (Mar.) ...... 1,746 1,308 +33.5% 1,777 -1.7% to a 2010 Business Journal ranking. Condo prices (000’s) (Mar.) ...... 300 270 +11.1% 300 0.0% Apartments (4th qtr.) Grubb Sale Gross occupancy ...... 93.8% 93.9% -0.1% 94.1% -0.3% The 60-day window that provided Santa Avg. sq. ft. rent ...... $1.86 $1.90 -2.1% $1.87 -0.05% Monica-based Colony Capital exclusive rights Avg. monthly rent ...... $1,609 $1,606 +0.2% $1,564 +2.9% to acquire struggling Grubb & Ellis Co. came and went late last month but doesn’t mean the Office vacancy rates (1st qtr.) deal is dead, both parties confirmed last week. Downtown Los Angeles ...... 15.0% 16.0% -6.3% 15.2% -1.3% Colony, a private investment firm led by San Fernando Valley ...... 18.5% 18.0% +2.8% 18.9% -2.1% billionaire Thomas Barrack, is still negotiat- West L.A...... 16.6% 16.4% +1.2% 16.4% +1.2% ing with the Santa Ana real estate services South Bay ...... 19.3% 19.0% +1.6% 18.0% +7.2% firm. In fact, Grubb’s recent announcement Countywide ...... 16.9% 17.0% -0.6% 16.6% +1.8% that it would be selling most of real estate investment business Alesco Global Advisors Industrial vacancy rates (1st qtr.) to New York’s Lazard Asset Management Downtown/Central ...... 2.1% 2.3% -8.7% 2.6% -19.2% may not preclude a sale of some sort to South Bay ...... 3.1% 3.2% -3.1% 2.7% +14.8% Colony. San Gabriel Valley ...... 3.4% 3.6% -5.6% 4.1% -17.1% Long Beach: 1 World Trade Center. “They’re taking the right approach and they are piecemealing it,” said Brandon Dobell, One World Trade Center, a 600,000- analyst at William Blair & Co. in Chicago. “If %± from square-foot Class A office building, has about I’m Colony, we don’t want the whole thing.” TOURISM Latest Previous previous Year %± from month month month ago year ago 156,924 square feet available for lease split Dobell said much of Grubb’s value still lies between six floors. Asking rents average $2.48 in its national brokerage services unit. Colony Hotel occupancy rate (Apr.) ...... 73.9% 75.9% -2.6% 70.1% +5.4% per square foot a month, according to CoStar has eyes on the unit, as well as Grubb’s real Room rate (Apr.)...... $149.6 $152.4 -1.8% $142.1 +5.3% Group Inc. At that rate, the port would pay estate investment trust subsidiary. Passengers rent of nearly $2.7 million annually, or nearly However, the longer the negotiations con- LAX (000’s) (Apr.) ...... 5,028.1 4,951.0 +1.6% 4,687.0 +7.3% $27 million for a 10-year lease of 90,000 tinue, the less value there may be in the broker- Burbank Airport (000’s) (Mar.)...... 353.8 314.7 +12.4% 372.5 -5.0% square feet. age. Since the company announced it was for The building, which houses the Long sale, Grubb employees nationwide have been Beach Film Office and a Morgan Stanley jumping ship, heading to others brokerages FOOTNOTES office, among other tenants, is not listed for like Cushman & Wakefield Inc. and Colliers 1. Not seasonally adjusted. 5. 20-foot equivalent unit. 2. Music, television, film and commercials quarterly. 6. Apartment and residential combined sale. It was assessed at $154 million last year. International. The company’s stock continues 3. Through Los Angeles Customs District. 7. Includes refinancings, second mortgages and equity mortgages Legacy purchased it for almost $150 million to trade below $1 a share. 4. In thousands of tons. in 2007 and put the building temporarily up Grubb spokeswoman Janice McDill said for sale in 2009. the company remains confident it will turn Port officials originally intended to build a things around and that a deal is on the horizon. BOLDFACE INDICATES UPDATED FIGURES $295 million headquarters, but the plan was “Colony is still involved in process. We Sources: California State Employment Development Department (employment figures); FilmL.A. Inc. (film permits); vetoed last year by Long Beach Mayor Bob have a number of interested parties and are U.S. Bankruptcy Court, Central District of Calif., Los Angeles (bankruptcies); Census.gov (exports, imports); City of Foster on concerns about the appearance of a continuing to work through the process,” Los Angeles Airport Department (LAX passenger traffic and air cargo); Burbank-Glendale-Pasadena Airport Authority public agency spending such a sum during a McDill said. (Burbank passenger traffic and air cargo); Bureau of Labor Statistics, Los Angeles (Los Angeles consumer price recession. Barrack declined comment through a index); Office of Economic Research at California State University, HomeData (home sales, home prices, condo Phil Brodkin, of CB Richard Ellis Group, spokeswoman. sales, condo prices); F.W. Dodge Division, McGraw-Hill (building contracts); Construction Industry Research Board who represents the landlord, declined to com- (housing start permits, building permits); M/PF Research Inc. (apartments); Grubb & Ellis (office and industrial vacancy rates); PKF Consulting (hotel occupancy rate, room rate). ment. Charles McClure of Legacy did not Staff reporter Jacquelyn Ryan can be reached return calls or e-mails; Karl Adamowicz, the at [email protected] or (323) 549- port’s real estate director, declined to comment. 5225, ext. 228. 2-Page Spread Single Page View Thumbnails | LABJ User Guide | Front Page | Table of Content Previous Page Zoom In Zoom Out Next Page

JUNE 20, 2011 LOS ANGELES BUSINESS JOURNAL 49 Investment Properties For Sale INDUSTRIAL INDUSTRIAL

2 101 BEAT THE BANK TO W. 3rd 100% LEASED INVESTMENT OPPORTUNITY Dodger 5 11,500 SF INDUSTRIAL WILSHIRE Stadium CLAREMONT BUSINESS PARK BLVD. 10

LOS ANGELES COUNTY VENTURA COUNTY FIGUEROA FLOWER Santa 10

Clarita ALAMEDA 60 110

• Six industrial buildings - 5 single • Quality, stable income stream tenant and 1 multi-tenant – All tenants have been in-place Simi 118 over 18 years 2 • 69,428 square feet total • Corner of Oregon & Anaheim Valley Northridge • Allows for a secondary exit strat- • Excellent opportunity to acquire a egy through the sale of individual Just East of 710 Fwy Burbank stable, fully leased business park industrial buildings to owner-users 170 • Highly desirable area within as the current leases roll - each • 2 Story With Offi ce Space, Agoura 5 the City of Claremont, off Arrow building is on a separate parcel. Hills 101 Highway, near I-10 Show Room & Work Area Hollywood Pasadena 210 Calabasas Glendale 405 5 Robert Griffi th Steven Ward Steve Warshauer Alhambra 10 West Lic 00816302 Lic 01773125 888-895-7535 Ext. 225 Covina LOS ANGELES Pomona (949) 608-2091 (949) 608-2061 Stevewarshauer2firstteam.com 1 Santa Robert.Griffi [email protected] [email protected] Monica Montebello Malibu Venice Culver City Whittier LOS ANGELES COUNTY Marina Del Rey Lynwood 5 ORANGE COUNTY Visit www.1483viaplata.com El Segundo FOR SALE Hawthorne GENERAL INDUSTRIAL SITE Manhattan Beach 4 5 miles Hermosa Beach 6 Torrance Redondo Beach Anaheim 3 Carson 1 Long Beach Rancho Palos 2 Huntington Santa Ana Verdes LONG Beach BEACH San Clemente Irvine LEGEND LOS ANGELES HARBOR HARBOR Office Costa Mesa 140,500 SF FOR SALE • Owner Will Carry Residential • State of the art • Heavy power • Warehouse & Garages Plus 1,500 corporate distribution • Excellent Long Beach SF Offi ce-.49 Acres Commercial facility location • Located Near 710 Fwy & Port of • High image offi ce area • Immediate access to Long Beach Industrial • Large yard area the port & major fwys

Land Wesley Babi 310.436.6481 Linda Martinez Lic #01822752 [email protected] 888-895-7535 Ext 216 Brokerage I Tenant Representation I Property Management I Acquisitions

COMMERCIAL Need more information on 215 AVE “I”, 1040 MANHATTAN FOR SALE: REDONDO BEACH FOR SALE: BCH BLVD, MB advertising your Investment Property? • 12 Apts (2/2’s) • 4,500 SF/Bldg & Retail • 15,747 SF/Land • Court Ordered Sale Bids due by • Sgl User or JUNE 20, 2011 re-develop • $6,500,000 • $2,900,000 Call Rosz Murray • 323.549.5225 ext. 215 Steve Miller (310) 792-3600 Steve Miller (310) 792-3600 Lic #00782584 [email protected] Lic #00782584 [email protected]

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50 LOS ANGELES BUSINESS JOURNAL JUNE 20, 2011 BUSINESS MARKETPLACE BUSINESS SERVICES

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JUNE 20, 2011 LOS ANGELES BUSINESS JOURNAL 53

‘The executive board ‘These are did propose to Katz that wonderful people they provide an office but they are for a person who misguided in would be paid by and their attempts to dedicated to SCBA.’ restructure SCBA.’ MARY BETH GARBER, SAUL LEVINE, Katz Media Group Mt. Wilson Broadcasters Radio: Station Owners Turned Off by HQ Proposal

media. The organization produced case studies mittee will have specific recommendations by only costs a fraction of true market value. Continued from page 1 and research on ad effectiveness that helped the end of summer. “There has been some inability by stations stations sell time. “When Mary Beth went to Katz, it created to run NCSAs and that’s a key part of our not to renew the lease at its current office in “SCBA is a valuable and necessary a big opening to look at all aspects of the orga- funding,” Carver said. West Los Angeles and has not started to look resource for the radio stations in Southern Cal- nization, including financial stability,” he said. Murray, the independent radio consultant, for a new president – which he saw as evi- ifornia, and is especially important to the inde- Levine said the shutdown plan went away said NCSAs still work in many radio markets dence that the board plans to shut down or pendent stations,” Levine said. “Greater effort after he issued a press release June 2. Now, he but not the big ones. Los Angeles is the largest greatly reduce SCBA operations. should be made to keep SCBA functioning as and the other independent station owners are in the country with total radio ad billings of The question about the organization’s offices an independent organization, and it should not satisfied the board is checking with the mem- $750 million, based on SCBA estimates. and independence reflect changes in the radio be operated as an adjunct to Clear Channel’s bership, and he expects they will receive some “In Los Angeles, rates are still high and the industry. When SCBA was formed in 1937, Katz Media. My opinion is shared by many opinionated feedback. stations can fill up most parts of the day with radio stations were mostly owned by indepen- local broadcast members of SCBA.” “These are wonderful people but they are paid advertising,” Murray explained. “If dent entrepreneurs. Today, radio is dominated by Garber, now an executive vice president at Katz misguided in their attempts to restructure SCBA were in Paducah, Ky., they would have large station owners such as Clear Channel, Media, said the SCBA board discussed shutting SCBA,” he said. “It’s an important resource no problem getting stations to run free ads CBS Corp. and Walt Disney Co., and by large down the trade group but rejected that possibility. for radio stations in the L.A. market and we because there’s time to fill. But that particular advertising brokers such as Katz Media, which While she maintained that a merger or don’t want to see it go away.” broadcasters association is fighting against sells time on 4,000 stations nationwide, includ- takeover by Katz was never on the agenda, “the filled-up schedules and premium rates.” ing many of the largest in Los Angeles. executive board did propose to Katz that they Paying members Levine at Mt. Wilson said the SCBA still Gregg Murray, president of radio consult- provide an office for a person who would be Garber said one catalyst for talk about shut- provides necessary services including job fairs, ing firm iRadioSales in Roanoke, Va., said the paid by and dedicated to SCBA,” Garber said. ting down the SCBA came from the organiza- research, advocacy with ad agencies and sales historic role of broadcast associations was to Katz already provides office space for other tion’s financial condition. training. If necessary, he and other independent help train station managers and sales people. broadcast associations, including the national While member stations pay dues to SCBA, broadcasters would be willing to pay higher However, today’s large radio conglomerates Radio Advertising Bureau in New York, so it most of the group’s budget comes from non- dues to support the organization financially. have their own systems for selling and conduct didn’t seem unusual to ask to do something commercial sustaining announcements, or He doesn’t want to see large corporate their own training. similar in Los Angeles, she added. NCSAs, that run on local radio stations. broadcasters take over SCBA the way it has “Stations don’t need the association’s help Stephen Carver, chairman of the SCBA NCSAs are similar to free public service much of the radio business. the way they did 10 years ago,” Murray said. board and L.A. market manager for CBS announcements except the non-profit organiza- “I think consolidation has ruined radio and In addition to training classes, SCBA pro- Radio, said the board decided to take a survey tion or government agency that wants publicity I’m fighting it tooth and nail,” he said. “I’m vides job fairs and research, and it helps sta- of member stations about what services they pays for the ads at a greatly reduced rate. The standing up for all my fellow broadcasters and tions navigate complicated regulations about want the SCBA to provide in the future. Also, money goes to the local broadcast association, trying to save our organization.” political advertising, which has become a the board will form an advisory committee to not the stations. For her part, Garber noted she worked as major source of revenue for local stations. come up with recommendations and an opera- Garber said that business model has run president of the SCBA for 13 years and During Garber’s tenure, the organization tional plan. into trouble. Many non-profits and government doesn’t want to see her work come to naught. worked to convince advertisers and ad agen- Carver expects the survey will be returned agencies don’t have budgets to pay for adver- “I would very much like the SCBA to con- cies to put money into radio rather than other in the next few weeks and the advisory com- tising in these recessionary times, even if it tinue,” she said. BUSINESS MARKETPLACE REAL ESTATE SERVICES

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54 LOS ANGELES BUSINESS JOURNAL JUNE 20, 2011 Financial: Prepaid Leader Gets Card-Carrying Rival “Green Dot’s been providing this service to Continued from page 1 competitors for years now. It’s part of Green Dot’s business model.” card, you’re shaking in your boots,” said Thomas McCrohan, an analyst with Philadel- More competition phia’s Janney Montgomery Scott LLC who Green Dot also may be looking beyond follows Green Dot’s stock. “Green Dot is American Express, which is not accepted at going to be in a position where they’re defend- every location and has limited appeal. ing their turf.” The real concern for Green Dot, Luria said, Green Dot executives were not made avail- is the prospect of major banks introducing their able for comment. own prepaid debit cards through the Visa and American Express made its announcement MasterCard networks. Last year, there were after a U.S. Senate vote earlier this month roughly 520 million debit cards in circulation failed to delay legislation that will cap the fees through the two leading card networks. By that banks earn from retailers on regular debit comparison, Green Dot has 4.3 million active card transactions. That makes the types of pre- cards; American Express has about 50 million paid cards Green Dot offers more attractive cards in circulation. since they are exempt from the fee cap. Luria expects JPMorgan Chase & Co., “Prepaid is going to take a lot of share from Bank of America Corp. and others to enter debit cards,” McCrohan said. the market soon as the effects of the pending Prepaid debit cards can be purchased at tens swipe-fee reform become clearer. of thousands of retail locations and online. Currently, banks earn an average of 44 They are used like standard debit cards, but are cents in fees on each debit card transaction, BLOOMBERG NEWS not linked to bank accounts; instead, users load In Charge: Green Dot’s Steve Streit at a San Francisco conference last September. which generates about $16 billion a year for money on the cards and purchases are deduct- the industry. The Federal Reserve, over the ed from the balance. Spend Holdings Inc. and its other direct com- to-use everyday payment card to address a real objections of banks, recommended capping the The cards have become increasingly popu- petitors, earns money on fees charged to cus- pain point that consumers have with existing fees at 12 cents, which was approved by Con- lar with the so-called unbanked – those without tomers and swipe fees from merchants. Green prepaid products in the market that are laden gress last year. The change will go into effect bank accounts – who represent as many as one Dot typically charges about $5 to buy its cards, with fees,” said Dan Schulman, group presi- July 21 after a failed Republican-led effort to out of every five people in the country. Prepaid a $6 monthly fee, $5 to load more money on the dent of American Express’ Enterprise Growth block the law. debit card use has grown 20 percent annually card and $2.50 to take money out of an ATM. Group, in a statement. News that the cap would take effect took a since 2005. But there is still plenty of room for About one-third of its operating revenue American Express also has said it will toll on Green Dot’s stock as investors antici- growth. In 2009, the most recent year for comes from retailer swipe fees, which in the charge retailers a discount from the 2.5 percent pated it would attract major banks into the pre- which data is available, Americans used the first quarter topped $37 million. Green Dot transaction fee levied for use of its charge paid market, now that the swipe fees are being cards for $140 billion in purchases. By com- does not disclose the size of individual swipe cards and other cards. reduced. The company’s shares, which had parison, traditional debit card volume topped fees, but analysts believe they are between 1 “Anytime somebody big comes in and says been trading at nearly $50 in late April, fell to $1.3 trillion. percent and 1.25 percent of the purchase price they’ll offer your product for free, it’s going to a 52-week low of $32.63 on June 8. Shares Until last week, the market was the exclu- in a retail transaction. have some impact,” said Gil Luria, an analyst closed June 16 at $34.19. sive domain of small firms, and industry pio- with Wedbush Securities Inc. “But look at Prepaid debit card providers are also facing neer Green Dot has held its spot atop the mar- Green Dot Corp. (Nasdaq:GDOT) the fine print.” challenges on the legal front. ket. The company has earned between $8 mil- Monrovia FRI. CLOSE, PAST 5 WKS He pointed out that the American Express The Florida Attorney General’s Office 43 lion and $13 million in profit every quarter CEO: Steve Streit card actually calls for customers to use Green launched an investigation last month into the top June 16: $34.19 42 since raising $164 million in a better-than- Employees: 352 40 Dot’s reload system, known as the Green Dot five prepaid debit card companies, including expected July 2009 IPO. Revenue topped $100 38 MoneyPak, to put additional funds on the card. Green Dot, for possible deceptive and unfair Market Cap: $1.4 billion million last quarter for the first time. 36 That means a card holder would go to a store practices, including charging hidden fees. But McCrohan said the new competitive P/E*: 56 34 and buy a $5 MoneyPak – money that goes to Luria said the company is transparent with 32 pressures could seriously squeeze its margins. EPS: $0.61 5/13 5/20 5/27 6/3 6/10 Green Dot – which is later refunded to the cus- its fees and the investigation will likely have “I think they are very aware of the *Twelve months trailing. Source: Yahoo Finance tomer by American Express. little long-term impact. But the threat of increased competition,” he said. Reload networks, which are connected to increased competition is real. American Express is primarily selling its cash registers at retail locations nationwide, are In its first quarter earnings report, Green Fee structure card online but also is rolling out a pilot pro- expensive and time-consuming to set up. As a Dot acknowledged the competition and stated Founded in 1999 by Steven Streit, now gram to sell Target-branded prepaid debit result, Green Dot, which launched its network it may need to “increase the incentives that we chairman and chief executive, Green Dot sold cards at Target Corp. stores. in 2004, has allowed many competitors to use offer to our retail distributors and decrease the its first reloadable cards in 2001. The company American Express is looking to grow usage its extensive network. prices of our products and services, which now has the largest card distribution network, of the card by significantly lowering consumer The idea might seem counterintuitive, but could adversely affect our operating results.” boasting partnerships with Wal-Mart Stores costs. It will not charge fees for purchasing the Luria maintained that it is in Green Dot’s inter- The company also is fighting back with Inc., CVS Caremark Corp., 7-Eleven Inc. card online, activation, monthly maintenance est to keep an open network, because it earns new features and functionality, including a and others. The company recently inked a deal or loading via a bank account. There is a $2 fee fee revenue from other companies – and com- mobile application that allows customers to with Rite Aid Corp. to offer a payroll card to for ATM withdrawals, but the first one each petition in the market is inevitable. check their balances. its employees. month is free. “That means Green Dot will get paid every “They’re always working on making their Green Dot, like Austin, Texas-based Net- “We created a simple, transparent and easy- time a customer loads the card,” he said. products more compelling,” Luria said. Government: Meters Rate Poorly With Merchants

Continued from page 5 Koth, co-owner of Off the Vine at Sixth Street and Pacific Avenue in San Pedro, said that in the business communities in both San Pedro when the parking meter rates were 25 cents an and Wilmington. hour, employees in the second-story offices San Pedro Chamber of Commerce Chief above her shop were parking in the spaces all Executive Camilla Townsend said that remov- day, going out every two hours to put 50 cents ing the parking meters would complement in the meter. some of the other recent initiatives to bring “When the parking meter rates went up, more shoppers into the downtown area. Local those employees parked elsewhere and more merchants established a business improvement people were able to park in front of my store,” district two years ago to spruce up sidewalks. she said. “My business actually increased.” Also, two trolley lines are planned this summer But Shaw-Koth, who owns the wine store to connect the Ports of Call shopping center with her husband, said that if the city does and the cruise terminals with the downtown remove the meters, it must strictly enforce the shopping area. two-hour time limit. “We’re a little community trying to survive, and Hahn said she expects the it to be enforced. removing the parking meters, as long as it’s done “The Department of Transportation has properly, would help in that effort,” Townsend said. been quite aggressive in enforcement in the San Pedro area, so I don’t see much of a prob- Parking hogs lem there with cars remaining beyond two

But the meters and the rate hikes have some hours,” she said. “If it does become a problem, RINGO H.W. CHIU/LABJ merchant-friendly aspects, too. Alison Shaw- we’ll deal with it more forcefully.” Plenty of Space: Some say meters on Seventh Street in San Pedro deter customers. 2-Page Spread Single Page View Thumbnails | LABJ User Guide | Front Page | Table of Content Previous Page Zoom In Zoom Out Next Page

JUNE 20, 2011 LOS ANGELES BUSINESS JOURNAL 55 Real Estate: L.A. Developer Faces Painful Breakup lender held off for quite some time before Continued from page 1 ‘If the property is having problems with foreclosure, bringing an action,” she said. that doesn’t take us completely by surprise. We knew Cerberus Capital Management LP. there were issues with some of Casden’s partners.’ Longstanding partnership “Unfortunately, there is a partnership dispute Ties between Casden and Cerberus appear to that has caused this occurrence,” said a state- BRIAN GABLER, assistant city manager of Simi Valley go back at least nine years. A division of Cer- ment by Robert Platt of West L.A. law firm berus reportedly had an ownership stake in Cas- Manatt Phelps & Phillips LLP. “Casden Known as one of the biggest and most much from them.” den Properties when Casden Properties sold its Properties is ready, willing and able to cure any aggressive private-equity firms, Cerberus In Santa Clarita, Casden and Cerberus had apartment portfolio to Apartment Investment default and will do so as soon as the dispute is made headlines for losing billions after pur- been working since 2005 on a proposal to & Management Co. in 2002 for about $1.5 bil- resolved, which is expected to occur shortly.” chasing majority stakes in Chrysler LLC and build up to 850 apartments, condos and lion. That was the billionaire’s biggest payday. Any overdue payments will be made as GMAC LLC. detached single-family residences. But six Cerberus has a roster that includes former soon as Casden dissolves the partnership, said Cerberus did not provide a comment. Attor- months ago all applications for the project Vice President Dan Quayle and former Trea- a Casden spokeswoman, who declined to com- neys representing Comerica declined to com- were abruptly pulled, said Paul Brotzman, the sury Secretary John W. Snow. It has raked in ment on the nature of the dispute. ment for this article. city’s community development director. About big profits over the years, with a portfolio now The Business Jour- Officials in some of the cities said that they the same time, officials were told that the part- valued at $23 billion. But it stumbled in Detroit. nal estimated in May had heard things were not going well between ners were splitting up. Cerberus spent $7.4 billion for a 51 percent that Casden had a net Casden and Cerberus. In Ventura, a 300-unit development pro- stake of GMAC, General Motors’ financing worth of $2.63 billion, “If the property is having problems with posed by Casden initially had trouble getting arm, in 2006, and an additional $7.4 billion for placing him at No. 12 foreclosure, that doesn’t take us completely by approvals in 2008. It finally passed the concep- an 80 percent stake of Chrysler in 2007. on the list of Wealthi- surprise. We knew there were issues with tual design stage a year ago, but officials there Chrysler’s ensuing bankruptcy and the govern- est Angelenos. some of Casden’s partners,” said Brian Gabler, haven’t heard much from the developer since. ment bailout of GMAC erased much of Cer- The foreclosure assistant city manager of Simi Valley, where a “Casden has the green light in a sense to go berus’ stakes in both. It got back much of its lawsuits were filed last 266-unit development was approved in 2007 ahead,” said Principal Planner Brian Randall. bet on Chrysler in December when Chrysler’s month by Comerica, but never broke ground. “We’re waiting for them to resubmit.” financing arm, which Cerberus had retained Casden which is acting as an Officials in Oxnard also haven’t heard control of, sold for $6.3 billion. administrative agent Unexpected delays much from Casden since a 201-unit proposal It also partnered with Miami-based home- for a group of six banks, against Casden Prop- The two companies partnered during the there stalled a year ago, said Community builder Lennar Corp. in a Santa Clarita Val- erties, Cerberus Partners and several limited housing boom to develop the properties. Only Development Director Curtis Cannon. ley venture, LandSource Communities Devel- liability companies attached to the specific the Palazzo Westwood, which opened in 2008, For the five undeveloped properties, the opment LLC, which filed for bankruptcy in properties. Aside from Westwood, the proper- and features 350 apartment units and 50,000 lenders are owed some $32 million. However, 2008. It’s unclear if those losses fed into its ties are in West Hollywood, Santa Clarita, square feet of retail, had even reached the con- the lion’s share of outstanding debts is tied up dispute with Casden. Oxnard, Ventura and Simi Valley. struction phase. in financing for the Palazzo project. Casden Despite the legal headaches, Casden him- The banks state that they are owed $199 mil- One other, the mixed-use Movietown Plaza borrowed $173 million of the $206 million it self appears to be doing OK financially. A lion, including $4.6 million in unpaid interest development in West Hollywood, is ready to cost to complete the Palazzo, and still owes source told the Business Journal that he and more than $700,000 in late fees. Casden break ground, though it’s unclear now when $166 million, according to the lawsuits. inquired within the past two months about Properties took out $223 million in loans to that might happen. The project would feature Sara Dineen Harris, a real estate attorney at buying a Beverly Hills home worth more than develop the six properties, with Cerberus acting 370 condos and apartments and 32,000 square Rutter Hobbs & Davidoff Inc., who $20 million. as a guarantor, according to the lawsuits. feet of retail space. reviewed the lawsuits for the Business Journal, And he has still proved successful at finish- In addition to Comerica, the other five “They were going to get demolition permits noted that the complaints show the lenders had ing projects. Last August, he opened the 276- banks are U.S. Bank National Association, and start tearing things down,” said David agreed to amend the loans several times since unit Empire Landing complex in Burbank, the Bank of the West, PNC Bank, JP Morgan DeGrazia, a senior planner. “But all of a sud- their 2005 origination. first major luxury apartment complex in the Chase Bank and Compass Bank. den it got very quiet, and we haven’t heard “It appears from these complaints as if the city in decades.

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56 LOS ANGELES BUSINESS JOURNAL JUNE 20, 2011

L.A. BIZ SEEN Los Angeles business events

1 1. From left, master of ceremonies Bobby Shriver; Todd Johnson, Lawry’s the Prime Rib Beverly Hills general manager; Steve Hilton, Hilton Foundation CEO; Bruce Schulman, Mercedes-Benz of Beverly Hills general manager; and Mayor Barry Brucker; at the Beverly Hills Chamber of Commerce’s June 2 installation gala at the Beverly Hilton. Hilton accepted a lifetime achievement award given to his father, Barron, and the Hilton family for their contributions to the city.

2. From left, Bank of America customer Renee Domaloan; Los Angeles Dodgers center ﬁ elder Matt Kemp; and Barry Simmons, Bank of America 2 3 senior vice president; at the Hollywood branch May 26. Kemp met with customers and gave away Dodgers tickets as part of a bank chain and Major League Baseball promotion.

3. From left, customer and tickets recipient Elena Kennedy with Kemp. His appearance at the branch was not advertised, so it was a surprise to customers.

4. From left, Joe Faulkner, 4 5 CresaPartners LLC executive vice president, and Gregory Schultz, First American Title Insurance Co. managing director, at the Los Angeles Headquarters Association’s May 11 awards luncheon at the California Club in downtown Los Angeles. Faulkner is the association’s president-elect; Schultz is president.

5. Zhihang Chi, Air China, North America, general manager, speaks June 8 on “Chinese Business and Diplomacy” at 6 7 Town Hall Los Angeles at the Millennium Biltmore Hotel.

6. From left, John Barrett, Aon Risk Insurance Services West Inc. resident managing director, and ret. U.S. Air Force Gen. Richard B. Myers at Aon’s June 2 Global Security Issues Forum at the California Club in downtown Los Angeles. Myers was the featured speaker and also signed his book, “Eyes on the Horizon.”

7. Attendees at the Aon event. 8 8. From left, Dr. Rob Cohen, Advanced Dental Care owner; Los Angeles City Councilman Bernard Parks; and Lisa Clayden, Sherman Oaks Cham- ber of Commerce executive director; at the chamber’s May 19 luncheon at Café Bizou in Sherman Oaks. Parks was guest speaker.

L.A. Biz Seen publishes photographs of business-related events in Los Angeles, including parties, awards dinners, benefits and other celebrations. Please e-mail photographs to [email protected] with “photographs” in the subject line. Please include contact information. Compiled by Tom Hicks 2-Page Spread Single Page View Thumbnails | LABJ User Guide | Front Page | Table of Content Previous Page Zoom In Zoom Out Next Page

JUNE 20, 2011 INDEX LOS ANGELES BUSINESS JOURNAL 57

‘We don’t have ‘My job doesn’t ‘It takes me three gaming. UWink allow me to flip minutes to make was about social burgers on a daily my paper yacht gaming.’ basis, though.’ and I don’t win.’ PAUL MOTENKO ADAM LEVIN, JOEL MILLER, on his self-ordering Criterion Capital Psomas, eatery, Stacked: Food Partners LLC, on PAGE 3 Well Built owning 10 Fatburgers, PAGE 3 PAGE 3

PEOPLE Dobell, Brandon ...... 48 I O Shaw-Koth, Alison ...... 5/54 Immelt, Jeffrey ...... 59 Obama, Barack ...... 59 E Snow, John W...... 1/55 Isaac, William ...... 17/18 Otteson, Christian ...... 17/18 Eckert, Richard ...... 12 Soros, George ...... 17/18 A Otting, Joseph ...... 26 Ely, Bert ...... 17/18 J Streit, Steven ...... 1/54 Ahearn, Grant ...... 26 James, Kevin ...... 59 P F B Jaude, Karim ...... 58 Pachter, Michael ...... 7 T Flowers, J. Christopher ...... 17/18 Beutner, Austin ...... 59 Johnson, Earvin Magic ...... 59 Padilla, Alex ...... 59 Townsend, Camilla ...... 5/54 Foto, John ...... 5/54 Blanco, Carla ...... 8 Jones, James ...... 12 Parsons, Gerald ...... 59 Tsai, Mark ...... 7 Fox, Joel ...... 59 Bower, David E...... 58 Joyce, Geoffrey ...... 3 Paulson, John ...... 17/18 V Bowers, Randy ...... 17/18 G Perkins, Kevin ...... 14 K Brell, Werner ...... 8 Gabler, Brian ...... 1/55 Perry, Jan ...... 59 Villaraigosa, Antonio ...... 59 Kramp, Kerry ...... 14 Brooks, Brian ...... 26 Garber, Mary Beth ...... 1/53 Platt, Robert ...... 1/55 Krane, Matthew ...... 14 W Brotzman, Paul ...... 1/55 Garcetti, Eric ...... 59 Plochocki, Steven ...... 59 Washburn, Halbert ...... 10 Bryson, John ...... 59 Gladue, Joseph ...... 12 L Pourat, Nadereh ...... 6 Burke, Richard Jr...... 3 Goldstein, Mark ...... 58 Leitz, James ...... 8 Prendergrast, Jerry ...... 3 Waters, Valerie ...... 12 Gray, Andrew ...... 17/18 Levin, Adam ...... 3 Wedbush, Edward ...... 12 C Q Gray, Scott ...... 5/54 Levin, Barry ...... 3 Wedbush, Eric ...... 12 Cannon, Curtis ...... 1/55 Quayle, Dan ...... 1/55 Caruso, Rick ...... 59 Griffith, David ...... 5 Levine, Saul ...... 1/53 Williams, David ...... 8 R Carver, Stephen ...... 1/53 Gruel, Wendy ...... 59 Luria, Gil ...... 1/54 Winebaum, Jake ...... 6 Raine, Kendall ...... 17/18 Casden, Alan ...... 1/55 Gunderson, Bill ...... 59 M Randall, Brian ...... 1/55 Wright, Jim ...... 59 Case, Steve ...... 59 H McCrohan, Thomas ...... 1/54 Riordan, Richard ...... 59 Cecala, Guy ...... 17/18 Hahn, Janice ...... 5/54 McDill, Janice ...... 48 Y Ruberry, William ...... 17/18 Cheney, Dianne ...... 58 Hamm, Harold ...... 59 Meyers, John ...... 6 Yaroslavsky, Zev ...... 59 Runyen, Chris ...... 48 Colson, Bernard ...... 10 Harris, Sara Dineen ...... 1/55 Miller, Joel ...... 3 Yoo, Jay S...... 12 Crossman, Marc ...... 5 Hechmer, Paul J...... 4 Misch, David ...... 12 S Yuan, Robin ...... 12 D Hennessy, Jerry ...... 3 Mnuchin, Steven ...... 17/18, 26 Saban, Haim ...... 14 DeGrazia, David ...... 1/55 Hickey, Michael ...... 7 Motenko, Paul ...... 3 Santiago, Dennis ...... 17/18 Z Dell, Michael ...... 17/18 Hoffman, Dan ...... 5/54 Murray, Gregg ...... 1/53 Schulman, Dan ...... 1/54 Zisko, Sue ...... 58

COMPANIES, Cerberus Capital Goldman Sachs Group Inc...... 17/18 Microsoft Corp...... 7 Santa Fe Seconds ...... 5/54 Management LP ...... 1/55, 17/18 Gores Group LLC ...... 14 MSD Capital LP ...... 17/18 Scovill Fasteners ...... 14 ASSOCIATIONS, ETC. Cerberus Partners LP ...... 1/55 Green Dot Corp...... 1/54 Mt. Wilson Broadcasters Inc...... 1/53 SFM Capital Management ...... 17/18 Grubb & Ellis Co...... 48 Cerritos Center for N Silar Advisors LP ...... 17/18 Gunderson Capital the Performing Arts ...... 58 Nara Bancorp Inc...... 12 Sizzler USA ...... 14 1 - 9 Management Inc...... 59 Charles Dunn Co...... 48 Nasdaq Stock Market Inc...... 5 Snak King Corp...... 3 3Digit Media LLC ...... 8 Cherokee Inc...... 14 H Natural Resources Defense Council . . . .59 SNL Financial ...... 17/18 7-Eleven Inc...... 1/54 Chrysler LLC ...... 1/55 Hanmi Financial Corp...... 12 NBC Universal Inc...... 14 Sony Corp...... 7 A Citigroup Inc...... 17/18, 59 Hanmi Financial Corp...... 14 NetSpend Holdings Inc...... 1/54 Soros Fund Management ...... 17/18 Aecom Technology Corp...... 4 City National Corp...... 3, 17/18 Hulu LLC ...... 14 Nintendo Co. Ltd...... 7 SourceMDx Inc...... 4 Clear Channel South Edge LLC ...... 14 Aetna Inc...... 6 I NPD Group Inc...... 5 Alesco Global Advisors ...... 48 Communications Inc...... 1/53 NSBN LLP ...... 58 Southern California Colliers International IMG Worldwide Inc...... 8 Broadcasters Association ...... 1/53 Amazon.com Inc...... 12 Inside Mortgage O American Express Co...... 1/54 Property Consultants Inc...... 48 Space Exploration Colony Capital LLC ...... 48 Finance Publications Inc...... 17/18 Occidental Petroleum Corp...... 59 Technologies Corp...... 14 AOL Inc...... 59 Institutional Risk Analytics ...... 17/18 Off the Vine ...... 5/54 Apartment Investment Comerica Inc...... 1/55 Spectral Services Community Bank ...... 17/18 Intel Corp...... 59 Office of Thrift Supervision ...... 17/18 Consultants Pte. Ltd...... 4 and Management Co...... 1/55 iRadioSales ...... 1/53 One Medical Group Inc...... 6 Apollo Management LP ...... 17/18 Continental Resources Inc...... 59 SSP Offshore LLC ...... 17/18 CoStar Group Inc...... 48 J OneWest Bank ...... 17/18, 26, 58 Stacked: Food Well Built ...... 3 Asbury PR Agency ...... 12 OpenGate Capital LLC ...... 4 Costco Wholesale Corp...... 3 J.C. Flowers & Co...... 17/18 Stone Point Capital LLC ...... 17/18 Associated Press ...... 48 J.P. Morgan Chase ...... 14 Oppenheimer & Co. Inc...... 10 CreateSpace ...... 12 T B Janney Montgomery Scott LLC ...... 1/54 Orbital Sciences Corp...... 14 Criterion Capital Partners LLC ...... 3 Target Corp...... 1/54 B. Riley & Co...... 12 Joe's Jeans Inc...... 5 P Cushman & Wakefield Co...... 48 Thaicom Inc...... 14 Bank of America Corp...... 26 Joint Commission ...... 4 Pacific Equity Partners ...... 14 CVS Caremark Corp...... 1/54, 3 Thomas Properties Group Inc...... 3 Bank of the West ...... 1/55 JP Morgan Chase Bank N.A...... 1/55 Paulson & Co...... 17/18 D THQ Inc...... 7 BankUnited ...... 17/18 JPMorgan Chase & Co...... 17/18 PNC Bank ...... 1/55 Davis Elen Advertising ...... 26 Time Warner Inc...... 59 BBVA Compass Bank ...... 1/55 Port of Long Beach ...... 14 Del Amo Fashion Center ...... 3 K Tractor Supply Co...... 59 Bieging Shapiro & Barber LLP ...... 17/18 KB Home ...... 14 Port of Los Angeles ...... 14 Del Rey Global Investors LLC ...... 4 Prendergast & Associates ...... 3 U BJ's Restaurants Inc...... 3 DirecTV ...... 59 Kennedy-Wilson Holdings Inc...... 14 Blackrock ...... 17/18 Korn/Ferry International ...... 14 Private Bank of California ...... 12 U.S. Bancorp ...... 17/18, 48 Disney-ABC Television Group ...... 14 Professional Business Bank ...... 12 U.S. Bank National Association ...... 1/55 Blackstone Group LP ...... 17/18 Divine Shots Photography ...... 4 Boingo Wireless Inc...... 6 L Providence Equity Partners ...... 14 UCLA Center for DxTerity Diagnostics Inc...... 4 Law Office of David E. Bower ...... 58 BreitBurn Energy Partners LP ...... 10 Psomas ...... 3 Health Policy Research ...... 6 Dynamics Capital Group ...... 58 Lazard Asset Management ...... 48 Brighter ...... 6 UnitedHealth Group ...... 6 LeFrak Organization ...... 14 Q Business.com Inc...... 6 E Qliance Medical Group USA Volleyball ...... 8 Eastman Kodak Co...... 59 Legacy Partners Inc...... 48 USC Thornton School of Music ...... 58 C Lennar Corp...... 1/55 of Washington PC ...... 6 eCompanies LLC ...... 6 Quicksilver Resources Inc...... 10 Uwink ...... 3 California Bankers Association ...... 12 Lime Brokerage LLC ...... 4, 12 Edison International ...... 59 QVC Inc...... 12 California Community Foundation ...... 48 Los Angeles Angels of Anaheim ...... 26 V Electronic Arts Inc...... 7 Valley Presbyterian Hospital ...... 4 California Department Ervin Cohen & Jessup LLP ...... 6 Los Angeles City Council ...... 5/54 R of Managed Health Care ...... 6 Los Angeles Department Radio Advertising Bureau ...... 1/53 Vitality Inc...... 3 Capstone Turbine Corp...... 14 F of Transportation ...... 5/54 RealD Inc...... 14 W Careington International Corp...... 6 Fairfax Financial Holdings Ltd...... 14 Los Angeles Lakers ...... 26 Red Bull GmbH ...... 8 Wal-Mart Stores Inc...... 1/54 Cascades Boxboard Farmers & Merchants Bank ...... 17/18 Los Angeles McDonald House ...... 3 Red Bull USA ...... 8 Walt Disney Co...... 1/53 Group-Connecticut LLC ...... 4 Fatburger Corp...... 3 LowerMyBills.com Inc...... 6 Rite Aid Corp...... 1/54 Wedbush Capital Partners LP ...... 4, 12 Federal Deposit Insurance Corp. . . . .17/18 Cascades Boxboard US Inc...... 4 M Roth Capital Partners LLC ...... 5 Wedbush Securities Inc...... 1/54, 7 Fox Entertainment Group ...... 14 Cascades Inc...... 4 Magic Pixel Games Inc...... 7 Rutter Hobbs & Davidoff Inc...... 1/55 William Blair & Co...... 48 FTI Consulting Inc...... 17/18 RX Timer Cap LLC ...... 3 Casden Properties LLC ...... 1/55 Malaga Bank ...... 17/18 Wilmington Chamber CB Richard Ellis Group Inc...... 48 G Manatt Phelps & Phillips LLP ...... 1/55 S of Commerce ...... 5/54 CBS Corp...... 1/53 General Electric Co...... 59 Maritime Research Center ...... 5/54 San Pedro Wilshire Bancorp Inc...... 12 Center Financial Corp...... 12 GMAC LLC ...... 1/55 Marshall & Stevens Inc...... 17/18 Chamber of Commerce ...... 5/54 Woori Finance Holdings Co. Ltd. . . .12, 14

These indexes list the people, businesses, associations, organizations, schools, etc., that are named in this week's issue. The numbers refer to the page on which the name is found. Numbers with slashes refer to pages on which lengthier articles are located that contain the name. 2-Page Spread Single Page View Thumbnails | LABJ User Guide | Front Page | Table of Content Previous Page Zoom In Zoom Out Next Page

58 LOS ANGELES BUSINESS JOURNAL COMMENTARY JUNE 20, 2011 LOS ANGELES BUSINESS JOURNAL ® Don’t Screen Out Human Touch 5700 WILSHIRE BLVD., SUITE 170, LOS ANGELES, CA 90036 F you haven’t read it already, check out the or three, and I ask the waiter to steer me to the best people business, too, and people prefer to deal with (323) 549-5225 FAX 549-5255 article in the Up Front section on page 3 of this one. That kind of advice you can’t get from a com- people, not touch screens. www.labusinessjournal.com issue about a new restaurant in Torrance. It put puter screen. I PUBLISHER & CEO an iPad on each tabletop. Diners use them to place Now, I must backpedal because there is nuance • • • MATTHEW A. TOLEDO their orders. here. A table-top computer ordering sys- Speaking of articles in this issue, be sure to read [email protected] | ext. 207 My first reaction: cool. As a cus- tem would be a fine addition to a restau- the incredible story of OneWest Bank in Pasadena. tomer, you can order the instant you rant as long as it’s merely a supplement. In a little more than two years, it went from Indy- EDITOR CHARLES CRUMPLEY settle on your choice. Later, you can Use it to ask for refills or to summon Mac – one of the country’s biggest belly flops – to [email protected] | ext. 208 ask for refills without flagging down your waitress. Or even use it to order a spectacular money-making machine. The new DESIGN DIRECTOR your waiter. And the owner can cut your meal if you’re a regular at the OneWest is among the most profitable of all banks ROBERT LANDRY [email protected] | ext. 243 labor costs and generally operate diner. But a restaurant shouldn’t think of and thrifts in the country. MANAGING EDITOR more quickly and efficiently. computers as the primary and preferred How did that happen? As explained by our LAURENCE DARMIENTO But soon I recalled that old say- point of contact with customers. banking reporter Richard Clough (a winner of mul- [email protected] | ext. 200 ing about how every problem has a Commercial banks have gone tiple national journalism awards), the Federal DEPUTY MANAGING EDITOR STEVE SILKIN simple and elegant solution that’s through a similar learning curve with Deposit Insurance Corp. gave the new owners a [email protected] | ext. 229 absolutely wrong. And now I won- COMMENT ATMs. Years ago, banks assumed they deal bordering on a steal. No one is saying the new NEWSDESK EDITOR TOM HICKS der if a touch-screen ordering system could replace most of their tellers with owners have done anything wrong, although the [email protected] | ext. 223 is one of those elegant solutions ATMs. Banks that took out too many fact that several of them are politically connected CHARLES REPORTERS that’s wrong. tellers’ cages had to reverse that move. billionaires may raise some eyebrows. RICHARD CLOUGH Think about it. For one thing, lots CRUMPLEY Even today, decades after ATMs Looking back, of course, you can make a list of [email protected] | ext. 251 DEBORAH CROWE of customers simply prefer to interact were introduced, if you walk into any stupid and, in a couple of cases, suspicious deci- [email protected] | ext. 232 with a waiter or waitress as part of the restaurant bank branch, chances are you’ll see a line of customers sions that the federal government made in the HOWARD FINE experience. for human tellers while ATMs sit lonely. Little wonder. panic of late 2008 and into 2009. [email protected] | ext. 227 ALEXA HYLAND But for another, the wait staff is your best A good teller can let you know about particularly good And since the FDIC stands to lose $10 billion in [email protected] | ext. 235 source of market intelligence. They know (or rates or quietly suggest you check back next week the IndyMac-OneWest deal while the new owners NATALIE JARVEY should know) if the guy who’s grilling steaks when the deal may be better. No ATM can beat that. crank out billions, we can add that sale to the sad [email protected] | ext. 230 ALFRED LEE tonight is a new employee. They should be able to Unfortunately, table-top computer ordering sys- list of bad deals that the federal government made. [email protected] | ext. 221 tell you if the fish is particularly fresh or if they’ve tems will probably become more common in JONATHAN POLAKOFF gotten two complaints this evening about the baked restaurants as the owners tumble to the fact that Charles Crumpley is editor of the [email protected] | ext. 239 JOEL RUSSELL chicken. At a restaurant, especially one that’s new they make operations faster and cheaper. But smart Business Journal. He can be reached at [email protected] | ext. 237 to me, I typically narrow my meal choices to two restaurateurs will remember that they are in the [email protected]. JACQUELYN RYAN [email protected] | ext. 228 VISITING FELLOW HEEJIN PARK [email protected] | ext. 241 LABJ FORUM CHIEF EDITORIAL PHOTOGRAPHER RINGO H.W. CHIU [email protected] | ext. 256 Safety and security concerns forced festival organizer Insomniac Inc. to Should the RESEARCH DIRECTOR Coliseum allow DAVID NUSBAUM Party move its Electric Daisy Carnival rave from the Los Angeles Memorial [email protected] | ext. 236 Coliseum to Las Vegas this year. So the Business Journal asks: raves again? VICE PRESIDENT OF ADVERTISING JOSH SCHIMMELS On? [email protected] | ext. 218 ASSOCIATE SALES MANAGER DARRIN SENNOTT [email protected] | ext. 220 SUE ZISKO made case by case on the merits of the rave being on what I’ve heard on the news. If I were the ADVERTISING ACCOUNT Director of Marketing considered. owner of the venue where it was happening, and MANAGERS JESSICA ANNAS NSBN LLP the patrons were out of control, I would be hesitant [email protected] | ext. 240 No. As the parent of a KARIM JAUDE to book it again. It’s hard to group them all based MICHAEL KOSASKY [email protected] | ext. 253 teenage daughter, I fight to Chairman on one experience. BILL MOIR keep her activities age-appro- Dynamics Capital Group [email protected] | ext. 216 priate and safe. Even for Yes, but only if they have the proper security. It is DAVID E. BOWER ROSZ MURRAY [email protected] | ext. 215 young adults and older, these not impossible to do. It costs some money and plan- Principal JIM SLATER large events are not safe, and ning, but it can be done. A lot of young people enjoy Law Office of David E. Bower [email protected] | ext. 209 our community should take the music and we should not deprive them of that. I think it’s good they’re using the Coliseum, for SPECIAL EVENTS/ responsibility for protecting whatever they use it for. Either use it or tear it ADVERTISING COORDINATOR MARISSA DE LA CRUZ our citizens. DIANNE CHENEY down and build a new football stadium. We’re not [email protected] | ext. 213 Zisko Executive Director going to stop raves from happening, so it’s just as PRODUCTION ARTISTS Cerritos Center for the Performing Arts well that they’re happening there. Maybe we just SALLY FOSTER MARK GOLDSTEIN I don’t want to say they’re good or bad based need to step up the security a little more. [email protected] | ext. 212 PATTY TSAI-CHU Professor [email protected] | ext. 242 USC Thornton School of Music CIRCULATION DIRECTOR Security in general isn’t the issue. Sometimes MICHAEL LEVINE football games aren’t safe at the Coliseum, and we [email protected] | ext. 247 all know what happened at Dodger Stadium. The CUSTOMER SERVICE LE MILLHAUSER issue is whether the rave organizers are able to pro- [email protected] | ext. 245 vide the necessary security. The decision should be ZAINABU BRYANT [email protected] | ext. 244

CONTROLLER NANCY SCHWARTZ [email protected] | ext. 202 Los Angeles Business Journal Poll ACCOUNTS RECEIVABLE SPECIALIST Should the Coliseum allow raves again? PATRICIA A. BENSON [email protected] | ext. 231 No. They’re too dangerous at such a ASSISTANTS TO THE PUBLISHER BETH THERIAC large venue. [email protected] | ext. 249 PAUL KNEZEVIC [email protected] | ext. 203

RECEPTIONIST 60% ERIN SCHAUER [email protected] | ext. 270

40% Yes. Security will be improved.

CITY BUSINESS JOURNALS Online results for week ended June 15 NETWORK 2-Page Spread Single Page View Thumbnails | LABJ User Guide | Front Page | Table of Content Previous Page Zoom In Zoom Out Next Page

JUNE 20, 2011 COMMENTARY LOS ANGELES BUSINESS JOURNAL 59 Two-of-a-Kind in L.A. Mayor’s Race? Austin Beutner and Rick Caruso would bring similar business credentials to a mayoral run.

By JOEL FOX With jobs and the ITH the term-limited mayoral run of Antonio Vil- economy the No. 1 laraigosa coming to an end, a number of possible issue for many W candidates are lining up to test the waters in a quest voters, the timing to become L.A.’s next mayor. Two potential major candidates are successful businessmen: developer Rick Caruso and invest- might be right for ment banker Austin Beutner. the candidacies of I had an opportunity to see both men in action recently. well-off businessmen Beutner attended a small gathering of the Valley Vote board of who emphasize their directors meeting, while Caruso, also in the San Fernando Val- ley, was speaking to a couple of hundred members of the Unit- job-creating abilities. ed Chambers of Commerce. Both Caruso and Beutner have spent some time in government. Caruso served on L.A. commissions including the Police Commission. Beutner worked as Villaraigosa’s deputy mayor for economic and business policy, but also worked for the U.S. RINGO H.W. CHIU/LABJ Mayoral Contenders?: From left, Austin Beutner and Rick Caruso. State Department in Russia, helping the former Soviet Union transition to a market economy. A number of analysts looking at the coming race feel the environment is similar to the time Republican attorney and Both potential candidates would be fighting for the same Riordan proved that a business leader with no elected expe- businessman Richard Riordan captured the mayor’s office in base and they make similar arguments on the issues of the day. rience could do a credible job running the city. Beutner and 1993. The opportunity may be there for a business executive to So what might separate them in the public eye. Caruso hope the voters retain fond memories of his leadership. take control of the city government once again. Beutner has the advantage of already having secured Riordan’s Beutner and Caruso have similar outlooks when they talk Name recognition endorsement, although Riordan’s endorsement of another busi- about correcting the ills of Los Angeles. Both emphasize treating Caruso has the better name recognition at this point. He will nessman, Steve Soboroff, to succeed him did not turn the race the city’s citizens like customers. Both attack the gross receipts be labeled a developer. Not the best title in this town, but his in Soboroff’s favor. tax system as detrimental to business. Caruso boldly said the tax projects such as the Grove shopping and entertainment center Beutner and Caruso will not be the only candidates for the job. kills jobs and should eventually be eliminated. Beutner also said are very popular. (He noted the Grove had 20 million visitors a In fact, there are many with much greater name recognition who the gross receipts tax must be changed and pointed to efforts he year compared with Disneyland’s 13 million, although I suspect could fill out a large field of candidates: Elected politicians such as made as deputy mayor, such as a tax holiday for new businesses, that the admission price might have something to do with the Los Angeles County Supervisor Zev Yaroslavsky, City Controller to encourage businesses to come to Los Angeles. disparity in those numbers.) Wendy Gruel, state Sen. Alex Padilla, City Councilwoman Jan Los Angeles is losing the battle for jobs. As Caruso stated in Beutner will have to deal with how he defines his role with the Perry and City Council President Eric Garcetti, as well as talk his speech, since 1980, while the city’s population gained 1 mil- current mayor and how popular Villaraigosa is come election time. radio host and attorney Kevin James, and perhaps even a surprise lion people and cities surrounding Los Angeles gained 500,000 The situation in which I watched them was quite different, or two like former Lakers star Earvin “Magic” Johnson. jobs, Los Angeles lost 50,000. and a side-by-side comparison is difficult. Beutner appeared But Caruso and Beutner, with their business credentials, will Beutner and Caruso both displayed ideas on dealing with serious and reserved. Caruso, addressing a large audience, was constitute a special competition within the larger political campaign. two of L.A.’s most serious problems: education and transporta- relaxed. Beutner was challenged with more specific questions If policy is similar, personality and the way they conduct tion. Caruso resisted the idea of more subways, arguing trains than Caruso, who was asked how he could save the Dodgers. their campaigns will make the difference. should be run down the center of freeways. Both handled the Q&A well. Both business execs could self-fund their campaigns, but With jobs and the economy the No. 1 issue for many voters, Joel Fox is president of the Small Business Action Committee in neither plans to do so. Beutner is fundraising; Caruso said he the timing might be right for the candidacies of well-off busi- California, editor of the political/business blog FoxandHounds- would raise funds as well if he runs. nessmen who emphasize their job-creating abilities. Daily.com and author of the mystery novel “Lincoln’s Hand.”

Obama’s Jobs Panel Needs Some Work By BILL GUNDERSON General Electric Co. According to Barron’s, “At the end of Led by one of America’s best chief executives, Steven Plo- 2000, GE employed 313,000 people, including 168,000 in the chocki, the company is decreasing the cost of health care by MERICA is full of job creators – but you won’t find them U.S. (54 percent). By the start of 2010, when the company filed automating records. Over the last five years, the company has on the president’s Jobs Commission, or in his choice its most recent annual report, GE had 304,000 workers, includ- gone from 661 to 2,000 employees. A for commerce secretary, hometown boy John Bryson. ing 134,000 in the U.S. (44 percent).” In fact, there are good job creators all over the country. At Bryson is a familiar name to many Angelenos: He is the for- Other members’ companies fare about the same: In 2006, Tractor Supply Co. in Brentwood, Tenn., Chief Executive Jim mer chief executive of Edison International and co-founder of Intel Corp. employed 95,000. Today, 82,500. Today, Eastman Wright is hiring 1,000 people a year to work in his stores, many one of America’s biggest lawsuit mills, the Natural Resources Kodak Co. employs 18,800, down 50 percent from five years selling organic farm supplies to city slickers. His stock is return- Defense Council. ago. Citigroup Inc. received hundreds of billions in bailouts, ing 41 percent a year in growth and dividends for the last 10 Not much job creation there. Unless you count hiring lobby- while laying off 50,000 people. years. ists and antibusiness lawyers as job creation. Which some peo- But let’s not forget the two chief executives responsible for Harold Hamm runs Continental Resources Inc., an oil and ple do. And that is part of the problem. what many say is the biggest business disaster in American cor- gas exploration and production company. Over the last three Just a few weeks ago, President Obama gave his new job porate history, Steve Case, former CEO of AOL Inc., and Ger- years, Continental has hired 15,000 people in North Dakota. commissioners their marching orders: “We’re also putting a lit- ald Parsons, former CEO of Time Warner Inc., both commis- They are looking for more. tle pressure on you guys to figure out how do we make sure that sion members. There are lots of others. None on the commission. the economy is working for everybody,” Obama told the CEOs, A curious group to create jobs. I’ve had several of these CEOs on my radio show recently. labor leaders and investors who make up the group. Their stock prices are just as bad. They are a modest crew more likely to talk about the “blocking “How do we make sure that every child out there who’s GE, for example, has returned minus 6.6 percent to its and tackling” necessary for business success, rather than the willing to work hard is going to be able to succeed? How do we investors over the last 10 years. Eastman Kodak has been diving “making certain ... and sharing” so popular with the stagnation make certain that working families across the country are shar- 20 percent a year for 10 years. crowd. ing in growing productivity and that we’re not simply creating These are tough times, no doubt. But some companies are They talk about opportunity. Not certainty. Risks and an economy in which one segment of it is doing very well, but creating jobs and wealth for their shareholders. rewards. Not guarantees. the rest of the folks are out there treading water?” They’ve had enough of complicated plans from people who This is not how job creators talk about bringing order out of L.A. impact do not know what they are doing. Now they just want to be left chaotic and dynamic markets. Rather, this is how community There are several in Los Angeles, Occidental Petroleum alone to do what they do best. organizers divvy up the spoils of their latest federal grant. Corp. has increased its work force by 25 percent since 2007. Not creating commissions, reports and Rube Goldberg The president said his commission is full of people who are DirecTV of El Segundo went from 10,000 employees in 2006 schemes. “on the ground right now,” creating jobs in a “competitive envi- to 23,000 today. Just jobs. ronment.” Down the road in Irvine, I’ve rated Quality Systems Inc. as Wrong again. What he has really done is appoint the wrong one of the Best Stocks Now in the country. Over the last 10 Bill Gunderson is president of Gunderson Capital Management people with bad job-creating records – then hobble them with years, it has returned an average of 38 percent per year to its Inc., a San Diego money management firm, host of radio show bad ideas. owners. Including 47 percent in 2008, when the market went “Positively Wall Street” and author of the book “Best Stocks Heading the commission is Jeffrey Immelt, chairman of down 38 percent. Now!” 2-Page Spread Single Page View Thumbnails | LABJ User Guide | Front Page | Table of Content Previous Page Zoom In Zoom Out Next Page

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DIGITAL EDITION USERS GUIDE | EDITORIAL LINK TO WEBSITE Los Angeles Business Journal digital edition provides links to navigate through pages and articles easily whether you are on your mobile device such as iPad and computer. With a the touch of your ﬁ ngertips on the headlines, the digital edition will directly link you to the website where the article is placed and can be forwarded through email or copied and pasted on documents of choice.

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1 HEADLINES: Touching headlines leads you directly to the labj.com article. 2-Page Spread Single Page View Thumbnails | LABJ User Guide | Front Page | Table of Content Previous Page Zoom In Zoom Out Next Page

DIGITAL EDITION USERS GUIDE | PAGE JUMPS Los Angeles Business Journal digital edition provides links to navigate through pages and articles easily whether you are on your mobile device such as iPad and computer. With a the touch of your ﬁ ngertips on the headlines, the digital edition will directly link you to the website where the article is placed and can be forwarded through email or copied and pasted on documents of choice.

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2 PAGE JUMPS: Touch jump tags leads you to and from the jump page 2-Page Spread Single Page View Thumbnails | LABJ User Guide | Front Page | Table of Content Previous Page Zoom In Zoom Out Next Page

DIGITAL EDITION USERS GUIDE | ADVERTISING LINKS Los Angeles Business Journal digital edition provides links to navigate through pages and articles easily whether you are on your mobile device such as iPad and computer. With a the touch of your ﬁ ngertips on the headlines, the digital edition will directly link you to the website where the article is placed and can be forwarded through email or copied and pasted on documents of choice.

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3 ADVERTISING LINKS: Touch hyperlinks leads you directly to the website 2-Page Spread Single Page View Thumbnails | LABJ User Guide | Front Page | Table of Content Previous Page Zoom In Zoom Out Next Page

DIGITAL EDITION USERS GUIDE | TABLE OF CONTENTS PAGE Los Angeles Business Journal digital edition provides links to navigate through pages and articles easily whether you are on your mobile device such as iPad and computer. With a the touch of your ﬁ ngertips on the headlines, the digital edition will directly link you to the website where the article is placed and can be forwarded through email or copied and pasted on documents of choice.

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4 TABLE OF CONTENT: Touch table of content teaser will jump directly to the page of the story. 2-Page Spread Single Page View Thumbnails | LABJ User Guide | Front Page | Table of Content Previous Page Zoom In Zoom Out Next Page

DIGITAL EDITION USERS GUIDE | NAVIGATION TOOLBAR Los Angeles Business Journal digital edition provides links to navigate through pages and articles easily whether you are on your mobile device such as iPad and computer. With a the touch of your ﬁ ngertips on the headlines, the digital edition will directly link you to the website where the article is placed and can be forwarded through email or copied and pasted on documents of choice.

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5 NAVIGATION TOOLBAR: Touch navigation button to go to speciﬁ c page indicated. iPad Only 'Thumbnails, LABJ User Guide, Front Page and Table of Contents will appear on iPad. Computer The entire navigation toolbar for computers will appear for expanded navigation options. 2-Page Spread Single Page View Thumbnails | LABJ User Guide | Front Page | Table of Content Previous Page Zoom In Zoom Out Next Page

DIGITAL EDITION USERS GUIDE | DOWNLOAD INSTRUCTION FOR PC/MAC Los Angeles Business Journal digital edition provides links to navigate through pages and articles easily whether you are on your mobile device such as iPad and computer. With a the touch of your ﬁngertips on the headlines, the digital edition will directly link you to the website where the article is placed and can be forwarded through email or copied and pasted on documents of choice.

We recommend you read the very brief CBJ Digital Edition User Guide which you can download right now at:

http://www.cbjonline.com/a3sdbj/resources/Digital-Edition-InstructionsONLINE.pdf

The User Guide will help you get the most out of the many enhancements incorporated into the Digital Edition.

To read the Digital Edition on either your PC/MAC please follow the instructions below;

To Download: 1. Click on the below listed URL: www.labj.com/digital 2. Click on the edition you wish to download (the editions for each paper are represented by an icon which appears on the Web page you access with the browser). 3. Wait as the selected edition is downloaded into your browser. Download progress will vary from different browsers. 4. The downloaded edition will appear in your browser

Reading Instructions (start here if you have already downloaded the Digital Edition into your browser)

1. Save the Los Angeles Business Journal Digital Edition in an easily accessible folder on your computer. We suggest creating a Digital Edition folder in your Documents Folder where you can save each issue of the Digital Edition. 2. Go do the folder with the Digital Edition, locate the Digital Edition icon and the Digital Edition will open in Adobe Reader. If you don’t have a copy of Adobe Reader on your computer, go to www.labj.com/digital and download a free copy of Adobe Reader. 3. As the Digital Edition opens inside Adobe Reader you will be asked to allow the Digital Edition to open in the full screen mode. 4. You will note a series of buttons across the top of the page of the Digital Editions. The buttons provide the following commands:

Previous Page, 2-Page Spread, 1-Page View, Thumbnails, User Guide, Front Page, Table of Contents, Zoom-in, Zoom-out, Next Page

There are addition links embedded in the Digital Edition (and described in the User Guide) which are intended to enhance your reading experience.

Note: the Digital Edition can also be read on Android, Apple, Blackberry and Windows smart phones and on Kindle and Nook digital reading devices. 2-Page Spread Single Page View Thumbnails | LABJ User Guide | Front Page | Table of Content Previous Page Zoom In Zoom Out Next Page

DIGITAL EDITION USERS GUIDE | DOWNLOAD INSTRUCTION FOR iPAD Los Angeles Business Journal digital edition provides links to navigate through pages and articles easily whether you are on your mobile device such as iPad and computer. With a the touch of your ﬁngertips on the headlines, the digital edition will directly link you to the website where the article is placed and can be forwarded through email or copied and pasted on documents of choice.

We recommend you read the very brief CBJ Digital Edition User Guide which you can download right now at:

http://www.cbjonline.com/a3sdbj/resources/Digital-Edition-InstructionsONLINE.pdf

The User Guide will help you get the most out of the many enhancements incorporated into the Digital Edition.

To read the Digital Edition on either your iPad please follow the instructions below;

To Download: 1. Click on the below listed URL: www.labj.com/digital 2. Click on the edition you wish to download (the editions for each paper are represented by an icon which appears on the Web page you access with the browser). 3. Wait as the selected edition is downloaded into your browser. Download progress is marked by a blue thermometer indicator in the URL bar of the browser. 4. The downloaded edition will appear in your browser

Reading Instructions (start here if you have already downloaded the Digital Edition into your browser) 1. To read the Digital Edition you must move the Edition from your browser to a digital reader. 2. Move the downloaded edition into the iBooks digital reader (iBooks is a standard app delivered on all iPads. The app is available free on in the Apple app store should you need to download a copy of the app) by tapping in the center of the page until you see the "open in" button appear in the upper right-hand corner of the page. 3. Tap on the "open in" button. A list of apps will appear. Select iBooks. After a delay of a few moments, the digital edition will appear on a bookshelf in the iBooks app. 4. Tap on the image of the digital edition shown on the bookshelf and the edition will open in iBooks. 5. Use the tools at the top of each page of the digital edition in combination with the built in tools in iBooks to read and navigate the edition. 6. You will note a series of buttons across the top of the page of the Digital Editions. The buttons provide the following commands:

Thumbnails, User Guide, Front Page, Table of Contents

7. Enjoy reading your weekly digital edition of the Los Angeles Business Journal 8. Please give us feedback by sending me an email at: [email protected]

Note: the Digital Edition can also be read on Android, Apple, Blackberry and Windows smart phones and on Kindle and Nook digital reading devices.