20110221-NEWS--0001-NAT-CCI-CD_-- 2/18/20116:43PMPage1 ©Entire contentscopyright2011byCrainCommunicationsInc.Allrightsreserved and tions, Top40 Broadcasting Corp. Las Vegas-based owner oftheDetroitstations, negotiations toacquirethe mulus MediaInc. tions afterAtlanta-based with twootherDetroitsta- 760 AM sion, eral CommunicationsCommis- must bereviewedbythe part ofthedeal,whichstill lenders, Page18 Largest 1st-quarterSBA Top verdicts,settlements Capitol Briefings,Page7 now couldhurtlater. Plan towaiveUIinterest has anevenbiggerplan Fast-growing FirstMichigan for bankruptBorders? What’s thenextchapter for 3arearadiostations Cumulus tobuyWJRindeal

NEWSPAPER www.crainsdetroit.com Vol.27,No.8 Crain’s Crain’s Focus: Law This JustIn Inside Page 3 Detroit’s otherCitadelsta- Detroit radiostation WDRQ 93.1FM Cumulus saidFriday. See ThisJustIn,Page2 is settobesoldalong List of 2010,Page9 WDVD 96.3FM entered into , arealso Citadel WJR Fed- Cu- tion whetherthestrategywill jobs, Snydersaid. business taxation”andwillcreate competitive inthecountryfor cient onthebusinessside. it istimeforsimple,fairandeffi- its. Wewillhonorpastcredits,but “We’re eliminatingallthosecred- week inpresentinghisbudget. litical power,”Snydersaidlast is becausesomeonehadmorepo- only reasonthey’reinthetaxcode realize, inmanycases,thatthe trumps theneedforwidespreadtaxincentives. that animprovedbusinesstaxstructure Snyder’s bet crainsdetroit.com the audio, Year event.Hear Newsmaker ofthe at pressing questions Snyder answers S industry, Film: Page 25 face cuts, teaching hospitals Medicaid spared, Health care: Page 24 face budgetax, Credits: services, cuts, sharing Cities: C Business's But fornow,it’sanopenques- “It willmakeusamongthemost “Let’s stopthetaxcreditsand Gov.RickSnyderiswagering LANSING — NYDER OE LOOK LOSER Will lowertaxestrumplostincentives? Crain's Detroit Crain's Doubts slow Fearing Many Page 25 Page 24 Q&A CAPITOL CORRESPONDENT B Y A selecting sites. tant factorsin as thetoptwomostimpor- cessibility andlaborcosts tion, rankedhighwayac- site selectionandreloca- which coverscorporate Development surveyed in2010by location consultants. both businessesandsite- rank highinimportanceto considerations, incentives way accessibilityoftentop with laborcostsandhigh- sions toexpandorlocate, tors gointocorporatedeci- sioned. work asenvi- MY Corporate executives While anumberoffac- L ANE business “ efficient fair and FEBRUARY 21–27,2011 simple, side. magazine, on the It istimefor Gov. RickSnyder reinvention +revitalization reinvention Area ” have someincentivesitcanoffer. tives outofthetaxcode,Michiganstillwill that,” hesaid. a flattaxpolicy?“Idon’tknowtheanswerto state offersalargeincentiveandMichiganhas nesses pickedoffininstanceswhereanother also reducingtaxes,that’sanincentive.” disarming because“totheextentthatthey’re professionals, saidMichiganisn’tunilaterally nization ofeconomicdevelopment opment Council ington, D.C.-based renaissance zonesandotherareas. other thingsareequal,”saidmagazineEditor tax ratesixth. state andlocalincentivesfifthcorporate on taxfactors,rankingexemptionsthird, Snyder’s budgetanticipatesusing$50million While thegovernor’sproposaltakesincen- But willMichiganbeatrisktohavingbusi- Jeff Finkle,presidentandCEOoftheWash- Incentives canbe“atie-breakerwhenall But executivesalsoplacedhighimportance in ISTOCKPHOTO.COM 21st CenturyJobsFund program, alternativeenergy,film, Michigan EconomicGrowthAuthority for brownfieldredevelopment,the accompanying arrayoftaxcredits the MichiganBusinessTaxandits Geraldine Gambale. , amorethan4,600-memberorga- Snyder proposestoeliminate International EconomicDevel- competitive taxstructure. simpler, fairerandmore Michigan businessesanda ly $1.8billiontaxcutfor plan wouldresultinanear- “C” corporations. corporate incometaxon them withanew6percent and incentivesreplace million ingeneralfund nomic developmentpro- grams andpurposes. Gone willbetaxcredits The governorsaidthe revenue forbroadeco- That $75million would supportareas See Budget,Page24 revenue and$25 Visit Studies•Detroit at theCollegeforCreative TaubmanA. Alfred CenterforDesignEducation 4:30p.m.–7 Networking/cocktail reception Wed., 23,2011 |8a.m.–4:30p.m. March www.regonline.com/2011ideas to Michigan in2007,according black-owned businessesin sion obligations.Thestatetreasurerputsare- like paylesspaydaysorafailuretomeetpen- triggered whenoneofseveraleventshappens, view ofacityorschooldistrict’sfinancesis March. will passbytheendofthismonthorearly scope ofanemergencymanager’spower. triggers forastatetakeoveranddefinesthe ments toPublicAct72,thelawthatdetails nancial managers. training sessionsforprospectiveemergencyfi- and schooldistrictshasbegunaseriesof of financialemergenciesinMichigan’scities ten. intervention couldcomeearlierandmoreof- districts couldchange—andthatmeansstate nancially troubledMichigancitiesandschool mines whenandhowthestatetakesoverfi- seat inlocal,stateandnationalpolitics state’s black-ownedbusinessesaleadership Commerce the newlycreated ris, presidentandCEOof need avoice,saidKenHar- in thenation. businesses, rankingfourth to about39,000black-owned metro Detroitareaishome about 44,000in2002.The Chamber gathers members black business A newvoicefor state interventions Law change may raise emergencies Ready for There wereroughly72,000 Here’s howtheexistinglawworks:Are- Dillon saidhehopesthebills,HB4214-4218, Now, theLegislatureisdebatingamend- State TreasurerAndyDillonexpectsawave By theendofmonth,lawthatdeter- And thosebusinesses U.S. Census , thegroupthataimstogive CRAIN’S DETROITBUSINESS CRAIN’S DETROITBUSINESS B B Y Y data, upfrom N N ANCY ANCY Michigan BlackChamberof K K See Takeovers,Page23 AFFER AFFER See Chamber,Page22 $2 acopy;$59year Harris ® 20110221-NEWS--0002-NAT-CCI-CD_-- 2/18/2011 6:11 PM Page 1

Page 2 CRAIN’S DETROIT BUSINESS February 21, 2011

marketing into the widely ac- bor-based New Enterprise Forum, a received a $15.6 million contract Signature managing director THIS JUST IN claimed Pure Michigan brand monthly gathering of business for retrofit work on the Stryker Mark Woods said the office is im- that’s been used for tourism pro- experts who hear pitches from armored vehicle. portant for the firm’s presence ■ From Page 1 motion, said Michael Finney, presi- would-be entrepreneurs and in- The U.S. Army Tacom Life Cycle on the west side of Michigan, dent and CEO of the Michigan Eco- troduce them to investors. Management Command in Warren covering a market that can’t be Under the agreement, Cumulus nomic Development Corp. Tom Porter, who helped found granted the single-bidder award covered from its Grand Rapids would pay $37 per share for He said the state has started to the nonprofit, received the first to GDLS for work to be complet- or Muskegon offices. Citadel — $30 per share in cash develop marketing messages to Tom Porter Leadership Award. ed by March 2012. The work will “There is a strong inventory and a maximum of $14 per share in business under Pure Michigan. Porter also co-founded the state’s be performed at GDLS’ Shelby of office and industrial real es- Cumulus stock. Industry trade There also will be use of public oldest VC firm, Ann Arbor-based Township offices along with tate in Holland, and as a result, publication Radio Ink reported the relations, social media, website EDF Ventures, and currently serves Kandahar Air Field in there’s a need for good commer- deal will be valued at about $4 bil- promotion, and the state will as an adviser to the Frankel Fund. Afghanistan, and facilities in cial real estate services.” lion, $2.4 billion and $1.5 billion in work with university alumni, Winning the lifetime achieve- Seattle, Alabama and Georgia. — Daniel Duggan market equity. members of the business commu- ment award was Dick Sarns, who — Chad Halcom Citadel exited Chapter 11 bank- nity and others to help identify designed what is still the world’s ruptcy in June, cutting more than business-attraction opportuni- most widely used lung and heart Pulte CFO to retire $1 billion in debt. ties, Finney said. pump machine during surgeries. Signature Associates adds PulteGroup Inc. said Friday The New York-based private eq- — Amy Lane Other winners were: Entrepre- new West Michigan office that CFO Roger Cregg plans to re- uity firms Crestview Partners and neur of the year, Farnam Jahanian, tire from the homebuilder later Southfield-based Signature As- Macquarie Capital are expected to founder of Arbor Networks Inc., a this year, after a successor is SBAM names new director sociates has expanded on Michi- provide up to $500 million in equi- provider of network security soft- named. ty financing. of government relations ware; best company presentation gan’s west side with the opening of an office in Holland. Cregg joined Bloomfield Hills- Cumulus expects to obtain the David Jessup has been named of 2010, Ann Arbor-based Fami- based PulteGroup in 1998 as se- remainder of the cash necessary to lyMint Inc., which makes software As part of the office’s opening, the director of government rela- Signature has hired Tom Elhart as nior vice president and CFO. He fund the transaction through debt tions for the Lansing-based Small to help children understand fi- was promoted to executive vice UBS Invest- an associate broker. Elhart was financing, to be led by Business Association of Michigan. nances; best technology, Ann Ar- president and CFO in 2003. Dur- ment Bank and Macquarie, Cumu- previously owner of Universal Jessup, who will assist Vice bor-based RetroSense Inc., which ing his 13-year tenure, Cregg led lus said in a release. Properties in Holland. President of Government Rela- hopes to use genes in photosensi- the company’s accounting, trea- Cumulus already owns stations The Holland office is the com- tions David Palsrok, previously tive cells in pond algae to help the sury, tax, information systems, in Ann Arbor, including adult-al- pany’s seventh; along with South- served as government relations blind see; and best business mod- investor relations, mortgage, ti- ternative station WQKL 107.1 FM, el, East Lansing-based Inventure field, the others are in Lansing, director at the Michigan Associa- tle and related activities. sports talk radio WTKA 1050 AM Kalamazoo, Grand Rapids, tion of Broadcasters and was on the Enterprises Inc., whose software and country station WWWW 102.9 Muskegon, and Toledo, Ohio. —Associated Press staff of the Michigan House of Rep- helps businesses and government FM. agencies run background checks. resentatives. — Dustin Walsh — Tom Henderson — Nancy Kaffer CORRECTION Pure Michigan gains ‘Upper Hand’ Ⅲ A story on Page 29 of the Feb. 14 edition on an acquisition by De- New Enterprise awards revealed General Dynamics to retrofit troit-based Huron Capital Partners LLC should have said Victoria Packing Michigan’s “Upper Hand” busi- Stryker military vehicles Corp. of Brooklyn is a supplier of pasta sauces for Rao’s Specialty Foods ness-marketing banner will be no A new award was unveiled and not the sole supplier. The story also misspelled the last name of more. Thursday night at the 25th an- Sterling Heights-based General David Zilko, the president of Ferndale-based Garden Fresh Gourmet Sal- The state is folding business niversary awards of the Ann Ar- Dynamics Land Systems last week sa Inc., who was named a board member of Victoria Packing.

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February 21, 2011 CRAIN’S DETROIT BUSINESS Page 3 Borders’ task: Cut, innovate Second Stage Extra Shandler, a partner in the New Retail stores, reading platforms must evolve York-based accounting and con- sulting firm J.H. Cohn LLP, who has BY DANIEL DUGGAN vate their stores, and they need to The court has approved worked with several book-indus- CRAIN’S DETROIT BUSINESS find new applications for e-read- $500 million in debtor-in-posses- try clients. ers,” said Mandi Mankvitz, social sion financing as well as an order In the book retail industry, like Borders Group Inc. has bought it- media director with the Waterford to close 200 of the company’s 650 any retailer, Borders needs to self some time to reorganize its Township-based retail consulting stores, including stores in Ann Ar- oversee an intricate distribution debt in bankruptcy, but emerging firm Sphere Trending. “They need to bor, Dearborn, Grosse Pointe and network to ship books from na- and surviving for the long term evolve and innovate. Utica. tional warehouses to regional will be a challenge. “They can’t play catch-up any- More closings are possible as hubs and individual stores. In the company’s favor, say re- more, they have to come up with Borders has 120 days — and a 90- If Borders closes too many stores tail experts, is that there is contin- new ideas.” day extension — to terminate leas- in a particular market, the sales ued demand for printed books and The Ann Arbor-based bookseller, es as part of the bankruptcy. revenue from the remaining stores demand for e-book readers. Work- founded by Tom and Louis Borders If the company is going to sur- might not be enough to support the When success doesn’t entail ing against the company is compe- as a college bookstore, filed for vive bankruptcy and succeed long- distribution, marketing and over- tition online and at street level. Chapter 11 bankruptcy protection term, it needs to be careful about getting your name out there, “They’re going to need to inno- Wednesday in New York. how it cuts its stores, said Chad See Borders, Page 21 Page 15 Community work Company index These organizations appear in this week’s Crain’s Detroit Business: Achatz Handmade Pie ...... 15 Arab American Chamber of Commerce ...... 22 key to cash for Assemblers ...... 14 Attendance on Demand ...... 17 Blue Cross Blue Shield of Michigan ...... 13 Bond, White, Washington & Washington ...... 12 some orchestras Borders Group ...... 3 Cincinnati Time Systems ...... 17 Citizens Research Council ...... 23 Collins & Aikman ...... 9 DSO contract offer Crittenton Hospital Medical Center ...... 23 Detroit Medical Center ...... 25 Detroit Metro Convention and Visitors Bureau . . . . 25 calls for same here Detroit Public Schools ...... 12 Detroit Symphony Orchestra ...... 3 Dickinson Wright ...... 13 Y HERRI ELCH B S W Donnelly Penman & Partners ...... 3 CRAIN’S DETROIT BUSINESS DRIVE Developments ...... 12 E-M Management ...... 10 The Detroit Symphony Orchestra’s desire to First Michigan Bancorp ...... 3 have musicians perform community engage- Frank, Haron, Weiner & Navarro ...... 13 ment and education work under the orches- Garden Fresh Gourmet ...... 15 tra’s umbrella has been an ongoing topic Gerard Thomas ...... 10 DAVID DALTON during contract negotiations. Health Alliance Plan of Michigan ...... 23 In the year ahead, David Provost — chairman, president and CEO of First Michigan Bancorp Inc. — wants to buy But one thing is clear: Money follows HealthMedia ...... 23 a bank in Wisconsin and change the name of his Troy bank to reflect doing business throughout the Midwest. when symphony orchestras and their musi- Henry Ford Health System ...... 23 cians broaden community and education Honigman Miller Schwartz and Cohn ...... 13 work. Infotronics ...... 17 Take the top-tier St. Louis Symphony whose Kmart ...... 13 musicians began participating in more en- Laethem Equipment ...... 12 semble performances and education in the Level One Bank ...... 3 First Michigan hungry again Macomb County Chamber of Commerce ...... 22 mid-1990s, following financial struggles for McTevia & Associates ...... 21 about 30 years. Michigan Black Chamber of Commerce ...... 1 The symphony’s community and educa- Michigan Department of Transportation ...... 14 Table set for regional buying binge, IPO tion work, in part, attracted a $40 million Michigan Health and Hospitals Association ...... 25 challenge grant from the family of Enterprise Miller Canfield Paddock and Stone ...... 12 BY TOM HENDERSON wants to become a major regional bank, mov- Rent-A-Car founder Jack Taylor around 2000. Motor City Denim ...... 15 CRAIN’S DETROIT BUSINESS ing into Ohio and Indiana after taking on That followed a $2.5 million grant from the Neyer Tiseo & Hindo ...... 12 Chicago and southern Wisconsin. New York-based Ford Foundation to establish Park West Galleries ...... 9 Ten months ago, First Michigan Bancorp Inc. of John Donnelly, managing director of the an endowed fund for the symphony’s com- Pixofactor Entertainment ...... 25 Troy was a one-branch bank with 30 employees Grosse Pointe investment banking firm of Don- munity partnerships program, among other Priority Health ...... 23 and $75 million in assets. Following three ac- nelly Penman & Partners, has a football metaphor things, and numerous other contributions Ralco Industries ...... 17 S3 Entertainment Group ...... 25 quisitions, it has 50 branches, in mind for First Michigan and totaling about $130 million between 2000 and Sphere Trending ...... 3 750 employees and $2.1 billion David Provost, its chairman, 2004, said Bruce Coppock, former president St. John Providence Health System ...... 23 in assets. president and CEO. of the St. Louis Symphony and the St. Paul The bank has even grander You’re (David TD Industrial Coverings ...... 15 “I sent Dave an e-mail that Chamber Orchestra in Minnesota and a former TheraMatrix Physical Therapy ...... 13 plans for the next year or so. “ Provost) in the said, ‘Dave, you’ve got the foot- cellist with the Boston Symphony Orchestra. University of Michigan Health System ...... 25 Buttressed by a commitment of ball, you’re in the open field, and “I think that was the combination of the Walbridge Aldinger ...... 12 another $200 million from cur- open field, and I I don’t see any tacklers in view,’ ” fact that it’s undeniably a great orchestra, Wellco ...... 23 rent investors to fund growth, said Donnelly. He helped one of with more Grammy nominations than Young & Susser ...... 9 including nearly $50 million don’t see any First Michigan’s local competi- Michael Jackson, Madonna and the Rolling from New York financier tors, Farmington Hills-based Lev- Stones combined, and of its deep reach into Wilbur Ross, First Michigan tacklers. el One Bank, raise $8 million last the community with community engage- Department index plans to buy banks in the Windy ” fall as part of a deal of its own, ac- ment and education and activities.” City and Milwaukee and grow John Donnelly, Donnelly Penman quiring the $253 million in assets Back then and to this day, about 95 percent BANKRUPTCIES ...... 7 its assets to about $5 billion. of Paramount Bank when it was of the St. Louis Orchestra participates in all CALENDAR ...... 20 And then it plans to have an shut down by regulators. kinds of community activities, “exactly the CAPITOL BRIEFINGS...... 7 initial public offering of at least $100 million. As Provost told Crain’s that in the next 12 kinds of things that are on the table in De- CAREERWORKS ...... 19 most of Southeast Michigan’s community months or so, he also wants to buy a bank in troit,” said Coppock, who is under contract banks continue to struggle with troubled loan CLASSIFIED ADS ...... 20 portfolios and quarterly losses, First Michigan See Buying, Page 22 See DSO, Page 21 KEITH CRAIN...... 6 MARY KRAMER ...... 6 News you can use Crain’s Michigan Business OPINION ...... 6 Every Wednesday, Crain's presents news THIS WEEK @ Check out Crain’s Second Stage PEOPLE ...... 19 newsletter, designed for growing from around the state, crainsdetroit.com WWW.CRAINSDETROIT.COM small businesses, crainsdetroit.com/secondstage. /crainsmichiganbusiness. RUMBLINGS ...... 26 WEEK ON THE WEB ...... 26 20110221-NEWS--0004-NAT-CCI-CD_-- 2/18/2011 4:14 PM Page 1

Page 4 CRAIN’S DETROIT BUSINESS February 21, 2011 Team Detroit’s Barlow hopes Idea conference brings real teamwork

BY SHAWN WRIGHT ing here are more dynamic than Hollywood — has another job, al- CRAIN’S DETROIT BUSINESS they are in other, more stratified beit one that doesn’t come with a cities.” paycheck: Advocate for Detroit On one recent Sunday in De- Barlow will share his thoughts and the region’s creative commu- troit, Toby Barlow, executive vice and experiences at the first-ever nity. president and Idea: Detroit conference March 23, “I’d like to hear success stories,” chief creative of- where he will be a speaker, spon- he said. “I’d like for someone with ficer for Team sored by Crain’s Detroit Business a good idea to connect with some- Detroit, said he and its sister publication, Advertis- one with the means of bringing spoke with an ing Age. that idea to life. That’s what makes alternative en- Barlow hopes the conference these live events so worthwhile: ergy CEO, a will “bring provocative, infec- People actually talk to one anoth- bagel entrepre- tious, strange and inspiring ideas er. neur and an in- to the table.” “I still believe getting together ternationally Barlow’s day job may be at Dear- and actually being social is much recognized bass born-based Team Detroit, a con- more effective than any social me- player — all be- Barlow sortium of five WPP Group advertis- dia out there, plus no one there fore 1 p.m. ing agencies that work on will tell you about their status on “That doesn’t happen in many marketing for Ford Motor Co. Team FarmVille.” places,” Barlow said in an e-mail. Detroit last year helped market the The conference, modeled after “The whole city is 138 square miles new Ford Fiesta and revamp Ad Age’s Idea conference held for of untapped creative resource, but Ford’s truck advertising. the past five years in Manhattan, it’s the collaborations that interest But Barlow — whose novel will feature 14 speakers, each talk- me. Sharp Teeth about Los Angeles ing about a specific product, inno- “I think the paths that are cross- werewolves was recently sold to vation or trend. In addition to the speakers, Crain’s is looking for the next crop of innovative entrepreneurs for its “Big Ideas” contest, to be highlighted during the confer- ence. In tandem with Idea: Detroit, the Big Ideas competition asks en- trants to submit their best ideas in the categories of arts and culture, entrepreneurship, education, en- vironment and bringing people to live in Detroit. Entrants must submit state- ments of no more than 200 words about a problem, issue or opportu- nity and how they would address it ShowShow Them Them What What with a solution, product or service. Submissions should include lists You Stand For of who would contribute and how You Stand For the goals can be realized. The deadline for submissions is Friday. As of Feb. 18, 98 entries is a commitment had been submitted. BBB Accreditation Finalists will be notified by to fairness and honesty that lets March 11 and invited to present at the March 23 conference at the Col- consumers know you are a business lege for Creative Studies’ A. Alfred Taubman Center for Design in De- they can trust - a business that troit. For more information about the honors its promises and embodies event or idea contest, visit confidence they deserve. www.crainsdetroit.com/2011ideas. THE MILLER LAW FIRM Your customers start with bbb.org. a professional corporation CRAIN’S CALLS FOR Shouldn’t you? 40 UNDER 40 NOMINATIONS Crain’s Detroit Business is seeking nominations for the 2011 class of 40 under 40, which recognizes young achievers based on factors such as financial impact and civic and community leadership. Winners will be profiled in the Oct. 3 issue, and Crain’s will celebrate their achievements at a late October awards event. Our firm specializes in litigation: To be eligible, nominees must be under age 40 as of Oct. 3, 2011. ® • Complex Commercial and Business For sponsorship opportunities, • Shareholder and Partnership please call (313) 446-6052. Start With Trust • Automotive Supplier Nominations must be received by April 8. Visit • Class Actions www.crainsdetroit.com/nominate Better Business Bureau • Employment to fill out the online form. Serving Eastern Michigan and the Upper Peninula Questions? Contact Jennette • Family Law and Probate Litigation Smith, deputy managing editor, at Call 248-223-9400 to learn more (248) 841-2200 [email protected] or (313) 446- 950 West University Drive, Suite 300 1622. or go to bbb.org millerlawpc.com Rochester, Michigan 48307 DBpageAD.qxp 2/11/2011 10:39 AM Page 1

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Page 6 CRAIN’S DETROIT BUSINESS February 21, 2011 OPINION MARY KRAMER Snyder’s budget Mentoring one helps us all Last week, Gov. Rick Business. We had both tending the World Economic Fo- Snyder offered a low-cost done well in our ca- rum at Davos, Switzerland, was a way to curb “brain reers and Doyle had bit like the Bill Murray movie drain” in Michigan and continued to help and “Groundhog Day.” Women still starts on right track keep young talent closer support women. are under-represented on corpo- to home: Mentor some- Now she’s written a rate boards and in the C suites of n a speech as Crain’s top newsmaker of 2010 on Valentine’s one the way two senior book: Powering Up: major companies, and the discus- Day, Gov. Rick Snyder acknowledged that “happy” was not leaders early in his ac- How America’s Women sion on that at Davos today is not I a word that would likely describe most people’s reaction to counting career men- Achievers Become unlike the discussion a generation tored him. Leaders. On March 3, ago. Nothing changes. his impending budget message. I’ve been lucky to have she’ll speak at an Info- Doyle thinks the answer is with- He was right. men and women make a rum luncheon at the in us. “I strongly believe that we Balancing Michigan’s budget without the use of stimulus difference in my career. Hyatt Regency in need to understand each other, get money, overall tax increases, accounting maneuvers or other One example: As a student at Dearborn to launch the book. (De- over our generational differences non-structural remedies was bound to create some pushback. Grand Valley State, I was trying to tails: www.inforummichigan.org) and start helping each other or acquire as much journalism expe- The book draws on her experi- we’re going to keep treading the And that’s because there are very few areas that aren’t part rience as possible to land a post- ences and those of scores of women same water — in the upper/middle of the governor’s “shared sacrifice” approach. graduation job. So I jumped at the she interviewed, from local leaders — that is getting more crowded all Two days before the release of the budget, the furor was all chance to get up at 4 a.m. to write to women on the global stage, from the time,” she told me. over taxing private pensions. Interestingly, public pensions radio news scripts for morning the CFO of a large global packaging In her book, Doyle is compli- were immune from his tax proposal, although the administra- drive-time at an FM radio station. company in Australia to former mentary of leaders at her old em- Down the hall was the newsroom Canadian Prime Minister Kim ployer Ford Motor Co. She credits tion is looking at public employee costs in another way in trou- for the ABC-TV Campbell to Teresa Sullivan, Bill Ford Jr. for recognizing what bled governmental units. As reported on Page 1, amendments affiliate with named last year as president of the needed to change and hiring Alan to Public Act 72 would allow emergency financial managers to the same own- University of Virginia. (Disclosure: Mulally to attack the corporate modify or terminate union contracts. ers. At a compa- I was one of dozens of local women culture within the company. We’re supportive of Snyder’s approach to the budget, build- ny Christmas she also interviewed.) But she also challenges the De- party, when I She divides her interview sub- troit automakers to really dig in ing a business plan around shared sacrifice and three other was feeling par- jects into three categories: Inter- and find out why so many senior principles: no net increase in taxes, tax reform and value for ticularly geeky lopers, insiders and innovators. women flee. money. and not quite The book concludes with seven It may be as simple as Gov. Sny- We also very much support replacing the Michigan Busi- part of the gang, “practices” Doyle believes can der suggested: Nobody — male or fe- then-reporter help women leap from being male — bothered to mentor them. ness Tax with a 6 percent tax on C corporations and not other Doyle Anne Doyle of- achievers to leaders. forms of corporate organization. In all the brouhaha over tax- fered to take me out with her on The early 1970s, when I first met Mary Kramer is publisher of ing private pensions, owners of smaller enterprises have been stories so I could see what TV was Doyle, were heady days for the Crain's Detroit Business. Catch her double-taxed for years on the income that they take from the all about. women’s movement. But even take on business news at 6:10 a.m. business. About 17 years later, Doyle and I Moira Forbes, representing the Mondays on the Paul W. Smith show We also like that Snyder has attached metrics to each de- connected again — she was at Ford fourth generation in her famous on WJR AM 760 and in her blog at Motor Co. and I had recently ar- publishing family, blogged earlier www.crainsdetroit.com/kramer. partment for efficiency, effectiveness and quality. rived as editor of Crain’s Detroit this month on forbes.com that at- E-mail her at [email protected]. We also agree with him that tax credits are a disguised form of state spending and that if programs or industries de- serve state support, they should ask for and receive that sup- port directly. TALK ON THE WEB With that in mind, we hope the governor — who has said Detroit and other cities must be successful for the state to suc- From www.crainsdetroit.com ceed — finds ways to replace the impact of removing brown- Re: Gov. Snyder’s budget It is time to convince L. Brooks field and historic tax credits for urban projects. Without those Reader responses to stories and I cannot say I disagree with Patterson to support light rail in the blogs that appeared on Crain’s tools, a project like the renovated Westin Book-Cadillac would much of what Gov. Snyder has pro- suburbs. He is holding up progress. Web site. Comments may be not have been possible. posed; in fact, I probably can shave a Bhoughton01 So how to spur redevelopment of urban land and build- little more of the tax credits. edited for length and clarity. Re: UM goal to ‘sell out Crisler’ Anna Ferguson ings will be key to the future of Detroit and other Michigan Anyone with any knowledge of cities. Re: Borders files for bankruptcy for those beautiful coffee table the sport will tell you — a winning books. Don’t count on successful We also would hope the governor and his staff will take a Bring on the fat cats and any team will fill the arena. reorganization. Richard Lester hard look at Department of Corrections spending. The de- business is sure to go under. … Timothy Dinan partment consumes roughly a fifth of the general fund bud- Most of the time the real strategy Re: Judge disbands water body Re: Detroit light rail gains support get, and although some cuts are suggested — including the behind filing for bankruptcy is to The judge should also forbid the avoid paying the pension plans of the If that fellow Brooks cannot see closing of a correctional facility — we believe there are still city from taking the money of water employees. into the future, it is time to relegate savings to be had through sentencing reform and other mea- ratepayers to use for city purposes Pushy him to the past. rather than for water. sures. Now we’re all going to Amazon.com Bob Prudhome Saulius Simoliunas

KEITH CRAIN: It’s probably not the choice that he’d like I just got an e-mail from Rich vision stations didn’t air. snatched up by many of er expense the choices that are government, whether it’s state or Homberg, general manager of Today, with literally the cable stations that readily available, but to eliminate federal, simply is spending way WTVS-Channel 56, pleading with hundreds of commer- exist. There is no reason the use of tax dollars to help sup- more than it is taking in through us to call or write our congression- cial stations plus many to believe that with over- port public television. taxes. Certainly the obvious cuts al folks telling them to continue more pay television sta- the-air stations, cable If there is a real need or desire for that can be made are those ser- federal taxpayer support for public tions, the need for a tax- channels and pay cable public broadcasting, then private vices that are already being sup- television. supported station has channels, we would be fundraising should continue. It plied by the private sector of our Sorry, Rich, but I think the gov- disappeared. Although missing any of the pro- makes sense for most of the money economy. ernment should stop all funding to most of the revenue for gramming that is now to run public broadcasting to come There was a good reason for public broadcasting. public broadcast sta- on public television. from viewers. If people like public public television decades ago. But When public television began, tions comes from pri- The diversity of pro- broadcasting, then those viewers that has long since evaporated. there were three networks and per- vate donations, it is im- gramming today on ca- can support it with their own dona- Whatever tax support there is for haps an independent station in possible to understand ble is quite remarkable, tions. That’s how it should work. public television should be elimi- most major markets. Public televi- why we need these stations. and every week new cable chan- There are a lot of ways to spend nated from the federal budget. sion added programming that the Almost all of the programming nels are introduced. The challenge taxpayer dollars, but the one thing Sorry, Rich Homberg, but I just other commercially supported tele- for public television would be is not to duplicate at some taxpay- we have noted lately is that the don’t agree with you. 20110221-NEWS--0007-NAT-CCI-CD_-- 2/18/2011 4:13 PM Page 1

February 21, 2011 CRAIN’S DETROIT BUSINESS Page 7 Plan to waive UI interest now could hurt later LANSING — President duce costs to business- The state’s estimated $117 mil- board of regents. She replaces re- Growth. He replaces acting director Barack Obama has added a es. lion interest bill is due Sept. 30. gent Mohamed Okdie, who resigned Andy Levin and starts Feb. 28. twist to Michigan’s dilem- Capitol There are timing is- Asked last week whether the Feb. 7. Fitzsimmons will complete ■ Robert Anthony, former senior ma over its $3.7 billion un- Briefings sues associated with state would still pursue issuing Okdie’s term, which runs through risk and quality partner with Price- employment insurance Michigan bonding — bonds, Gov. Rick Snyder said the 2016. The appointment is subject to waterhouse Coopers LLP, has been debt. the higher interest administration was “monitoring Senate approval. appointed by Gov. Rick Snyder to Included in Obama’s rates climb for that the situation and would look at the Ⅲ Steven Hilfin- serve on the Michigan Gaming Con- budget proposal presented type of obligation, the best point to say, ‘is it appropriate ger, managing trol Board through 2014. He suc- last week was a two-year less feasible it might to look at bonding or not?’ ” partner of the ceeds Kenneth Sanborn, whose term waiver of interest pay- be for the state be- Detroit office of ended in December. ments for states like Michi- cause of the narrowed law firm Foley & ■ Robert Emerson, former state gan that owe money, as spread between the Comings & Goings Lardner LLP, has budget director and lawmaker, has well as a two-year suspen- Amy Lane rate on the bonds and ■ Beth Fitzsimmons, president of been named di- joined Lansing lobbying firm sion of increases in federal the nearly 4.1 percent Ann Arbor-based Information rector of the McAlvey, Merchant & Associates as taxes to repay principal on the bor- interest rate that the state must Strategists LLC, has been appointed Michigan Depart- an associate. He starts Feb. 28. rowing. start paying this year on the fed- by Gov. Rick Snyder to serve on ment of Energy, La- Amy Lane: (517) 371-5355, Michigan and other states had eral borrowing. the Eastern Michigan University Hilfinger bor and Economic [email protected] wanted the federal government to continue the interest waiver, so at first blush, the proposal might ap- pear to be a good deal. Not so fast, some say. “This is a prime example of ‘be careful what you wish for,’ ” said Wendy Block, director of health policy and human resources for the Michigan Chamber of Commerce. “Because while the president’s plan provides short-term principal and interest relief for states, in- cluding Michigan, the proposal also includes a significant and costly increase in employer taxes beginning in 2014.” That year, the federal taxable wage base would rise. States cur- rently collect federal UI taxes on the first $7,000 of a worker’s wages, and that would rise to $15,000. The change also has implica- tions for Michigan’s taxable wage base, which would rise from $9,000 to $15,000, Block said. As a result, employers’ state and federal taxes would go up. One argument for the plan is that it would help states in the short term and delay for two years tax increases on employers, while ultimately providing faster repay- ment of federal loans and working to restore solvency to state unem- ployment trust funds. Block said the chamber wants to see a full cost-benefit analysis and is still evaluating the proposal, but an initial reaction “is that the strings attached are too great.” It’s time for your business to Obama’s plan has already hit Republican criticism in Washing- ton. accomplish big things again. Crain’s reported earlier this month that state officials are con- sidering issuing $3.7 billion in bonds to pay off the state’s UI debt, which could give Michigan a lower interest rate and potentially re-

BANKRUPTCIES Now’s the time to reinvest in your business’ future. The following businesses filed for Chapter 7 or 11 protection in U.S. The last few years haven’t been easy. It’s been work just to maintain the business you’ve built. Bankruptcy Court in Detroit Feb. 11- Feb. 17. Under Chapter 11, a company It’s time to get back to growing it. Whether that means buying new equipment, improving your files for reorganization, Chapter 7 in- volves liquidation. working capital, or reinforcing your overall finances, Fifth Third Business Bankers can help you Blinds by Cherokee LLC, 30467 Beck Road, Wixom, voluntary Chapter 11. take action to get your business moving forward with confidence. Stop in your local Fifth Assets and liabilities not available. Third Banking Center, call 1-866-534-7249, or visit 53.com, and let’s get your business moving. G & G Floor Co. Inc., 19675 E. Nine Mile Road, St. Clair Shores, voluntary Chapter 7. Assets and liabilities not available. Loans subject to credit review and approval. Fifth Third Bank, Member FDIC. Equal Housing Lender. SLG Holdings LLC, P.O. Box 3500, Farmington Hills, voluntary Chapter 7. Assets: $6,660; liabilities: $272,435. — Shawn Wright DBpageAD.qxp 2/11/2011 10:55 AM Page 1

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February 21, 2011 CRAIN’S DETROIT BUSINESS Page 9

REPORTER’S NOTEBOOK

Chad Halcom covers law, manufacturing and defense. Call (313) 446-6796 or write chalcom @crain.com. Law Chad Halcom he big cases of 2010 for metro Detroit man’s SEC case (below) and the Charles Park West art attorneys ranged from accounting Conaway/Kmart Corp. case (Page 13). T scandals and inventory practices to This selection of large verdicts and set- cases over faulty construction materials tlements is the result of legal reporter case on appeal and patent protection. Chad Halcom’s efforts combing through There were fewer big-dollar verdicts lawsuits and submissions from law firms One of metro Detroit’s higher- than in previous years but a number of and case parties. Profiles begin on this profile lawsuits in 2010 is languishing long-running disputes — like Collins & Aik- page and continue through Page 14. in the undecided category. The 6th U.S. Circuit Court of Appeals in Cincinnati agreed last week to hear an appeal that could reinstate the INSIDE April 21 jury verdict against Southfield-based Park West Galleries $40.8M judgment Inc. in favor of Global Fine Art Registry in Edward May verdicts and LLC and its CEO. Ponzi scheme, U.S. District Judge Lawrence Zatkoff scrapped the jury’s $500,000 Page 10 award against Park West in August and ordered a new trial that month Gerard Thomas but later agreed to put the case on commissions settlements hold until an appeal is heard. restored, Page 10 The Southfield art dealer sought $46 million in damages against Fine Art Registry, CEO Teresa Franks and a Dearborn’s case of The biggest cases of 2010 contract writer for the registry in a the cracked caisson, 2008 lawsuit stemming from reports Page 12 the registry published online about art U.S. Securities and Exchange Commission v. Collins & Aikman Corp. et al Venue: U.S. District Court, auctions that the Park West at Sea Hanna Kleinpeter-Fleck, KJ Egleston et al v. Collins & Aikman Corp. et al Detroit, Chief Judge Gerald subsidiary manages aboard cruise Lack of controls Rosen (investor class ships. on DPS wire MainStay High Yield Corporate Bond Fund v. Heartland Industrial Partners LP et al actions); U.S. District Court, New York, Judge Shira “It’s essentially back in the pretrial transfers, Page 12 Scheindlin (SEC case) phase (of the lawsuit) right now,” said Rodger Young, partner at Southfield- Securities fraud Cases filed: April 13, 2005, Feb. 5, 2007, and March 26, based Young & Susser PC and lead Vindication comes Accounting maneuvers de- 2007 attorney for Park West. “Because for DRIVE, Page 12 signed to make Collins & Aikman : $27.6 million, unless the (appeals) court changes Corp. look like an auto supplier Total payout June 10, 2010 the status of the case, it’s as if the Ex-dealer takes on on the comeback trail only made first trial never happened at all.” its ultimate failure all the more Plaintiff: U.S. Securities and Deere, Page 12 Exchange Commission, The higher court will consider catastrophic. MainStay High Yield Corporate whether Park West waived its right to All told, private equity fund Bond Fund and other seek a new trial while the original six- Whistle-blowers Heartland Industrial Partners LP, sever- bondholders who acquired at week trial was pending. The company part of suit over off- al of Collins’ top executives and a key least $153 million in notes objected several times in court when label use of drug, supplier who sat on Collins’ board will from Collins & Aikman Corp. references came up to matters that pay $27.6 million to shareholders, bond- Miller Newman through investment adviser Zatkoff had deemed inadmissible. Page 13 holders and the U.S. Securities and Ex- MacKay Shields LLC, KJ But the company did not seek a change Commission because of the ac- bates that inflated Collins’ operating in- Egleston and other investors mistrial before the case was TheraMatrix wins counting practices. come by a combined $43.6 million by who bought Collins & Aikman submitted to the jury. The Collins settlements and judgments mid-2004. stock or notes between 2002 judgment against and 2005. “The (new) case law says you can’t in 2010 stemmed from supplier transac- Collins secured $415 million in senior Blues, Page 13 tions that inflated the company’s operat- subordinated notes from bondholders to Lead counsel: Thomas Burt, wait for the jury verdict and then move partner, Wolf Haldenstein ing income between late 2001 and mid- refinance its debt in 2004 and early 2005, for a mistrial. You can’t bet on the Adler Freeman & Herz LLP, verdict going your way and then if you Kmart’s alleged 2004. Collins fired CEO and former and a class of investors who bought the New York; and Max Berger and lose, turn to the court (judge),” said ‘Project SID’ key to Reagan White House budget director notes alleged in a 2007 lawsuit that they Steven Singer, partners, Donald Payton, partner at Farmington David Stockman in May 2005 after an in- were misled by falsified earnings re- Bernstein Litowitz Berger & Hills-based Kaufman Payton & Chapa judgment, Page 13 ternal probe and then ports. Grossman LLP, New York (for PC and attorney for the registry. filed for bankruptcy A group of stockholders brought a the investors); co-counsel: E. Attorneys are also awaiting ruling MDOT pays after days later. A criminal class-action lawsuit after the company in Powell Miller and Marc from the Michigan Court of Appeals in case against him was 2005 announced it had begun an internal Newman, partners, The Miller motorist struck by Law Firm PC, Rochester; H. 2008 buyer lawsuits against Park fallen concrete, later dismissed. probe into prematurely or improperly re- West in Oakland County Circuit Court. It all began a few ported supplier rebates. The announce- Michael Semler, SEC counsel. Oral arguments are expected March Page 14 months after Heart- ment sent the company’s stock price Defendants: Collins & 13 on a request to dismiss an expert land became majority plummeting; weeks later, Collins filed for Aikman Corp., Heartland Industrial Partners LP, CEO on artist Salvador Dali as a owner of Collins, in- bankruptcy and was liquidated in 2007. Fatal accident at David Stockman, CFO J. defendant. construction site vesting more than The SEC brought a third action alleg- Michael Stepp, board member A separate buyers’ lawsuit, filed in $360 million in the ing fraudulent practices and violations Stockman and former Joan Fabrics Corp. 2010, awaits a response from Park leads to settlement, Troy-based maker of of the Exchange Act and Securities Act. CEO Elkin McCallum, Collins West to several amended complaints Page 14 automotive plastic and fabric interior In April 2010, Stockman agreed to pay COO Gerald Jones, vice on behalf of more than a dozen components. $7.2 million to resolve all three court cas- president of financial planning buyers in late January. Payton said a Federal officials allege Stockman es — $2.2 million each to settle the stock- and corporate controller David third lawsuit could be in the offing WEB EXTRA helped orchestrate about $14.8 million holder and note-holder class actions, and Cosgrove, purchasing soon. worth of “round trip” transactions with another $2.8 million in the SEC case. department executive Paul Summaries: “I think we’ve got another 10-12 Elkin McCallum, former CEO of Joan Fab- McCallum agreed to pay $100,000 to Barnaba, and several Collins From medical board members. plaintiff (buyers) that have come to us rics Corp., who sat on Collins’ board of di- resolve the MacKay Shields note-holder malpractice to Lead counsel: Jonathan since (the 2010 case) that we think breaches of rectors. These included rebates of over- class action, and was fined $75,000 by will be the basis for a new lawsuit,” payments to buy businesses that the SEC. Former company CFO J. Lerner and Lea Haber Kuck, contract and non- partners, Skadden, Arps, he said. “If it turns out they’re right Michael Stepp also was fined $75,000 by local cases with McCallum or Joan Fabrics owned, or Slate, Meagher & Flom LLP, that they bought from Park West, and Detroit legal loans that were later repaid to McCallum. the SEC and settled both investor class New York; co-counsel: Thomas there’s truly a claim of any works representation, The rebates and loan payments were actions for $125,000. McNeill, member, Dickinson being inauthentic, then we’ll sue on 12 more cases counted either as income or reduction David Cosgrove, vice president of fi- Wright PLLC, Detroit, and their behalf, too.” of note, in operating costs on SEC earnings re- nancial planning and analysis and con- Andrew Weissman, partner, crainsdetroit ports. The company also allegedly used WilmerHale LLP, Washington. .com/focus at least 132 supplier transactions or re- See Securities, Page 10 20110221-NEWS--0010-NAT-CCI-CD_-- 2/18/2011 10:36 AM Page 1

Page 10 CRAIN’S DETROIT BUSINESS February 21, 2011 Focus: Law U.S. Securities and Exchange Commission v. Edward May et al Ponzi scheme fallout

Collection efforts continue one Ⅲ Venue: U.S. District Court, Judge year after a judgment for more John Feikens than $40.8 million against Edward Ⅲ Case Filed: Nov. 20, 2007 May, president of Lake Orion- Ⅲ Settlement: $40.8 million based E-M Management Co. LLC and judgment, Jan. 7, 2010 alleged mastermind of a $250 mil- Ⅲ Plaintiff: U.S. Securities and lion Ponzi scheme. Exchange Commission The U.S. Securities and Exchange Ⅲ Lead counsel: Adolph Dean, SEC Commission alleged that May, attorney, Chicago through his company, raised Ⅲ Defendants: Edward May, E-M $250 million between 1998 and mid- Management Co. LLC, Lake Orion 2007 from investors in Michigan, Ⅲ Lead counsel: Harold Gurewitz, California, Florida, Illinois, New partner, Gurewitz and Raben PLC, York, Ohio and New Jersey. Detroit Federal officials said May pur- ported to sell investments in compa- dictment on 59 counts of mail fraud, nies with contracts to provide and could have to turn over an addi- telecommunications equipment tional $35 million under a forfeiture and services to hotel chains when, portion of the criminal case. That in fact, he was swapping investor matter is set for trial May 16 before funds in a Ponzi scheme. Hotels U.S. District Judge Arthur Tarnow. May and E-M named include Hilton Tarnow also is hearing two con- Worldwide, MGM Grand Hotel LLC, Mo- solidated lawsuits by 464 May in- tel 6 and Sheraton Hotels and Resorts. vestors against Troy accounting May consented to an SEC judg- firm Doeren Mayhew & Co. PC and ment and then-U.S. District Judge two of its directors, who are ac- John Feikens ordered May to pay cused of developing the cash flow $37 million plus $3.8 million in inter- plan and issuing statements to in- est. Feikens retired in November. vestors. That case begins in March. I’M AN MSU LAW ALUM... May faces a related criminal in- — Chad Halcom

Preparing future lawyers to use intellect, ambition, and ethics Gerard Thomas Co. Inc. v. S&T Daewoo Co. Ltd. to solve the world’s problems. Commissions restored www.law.msu.edu

A federal judge in October af- Ⅲ Venue: U.S. District Court, firmed a July arbitration award of Detroit; Judge Bernard Friedman $8.5 million against S&T Daewoo Co. Ⅲ Case filed: Feb. 25, 2009 Ltd. in favor of Southfield-based Ger- Ⅲ Verdict: $8.5 million arbitration ard Thomas Co. Inc., its manufactur- order, Oct. 26, 2010. On appeal. ing sales representative in the Unit- Ⅲ Plaintiff: Gerard Thomas Co. ed States. Inc., Southfield At issue was an agreement be- Ⅲ Lead counsel: Randall Gillary, tween Gerard Thomas and S&T president, Randall J. Gillary PC, Daewoo’s predecessor company, Troy; co-counsel Kevin Albus Daewoo Preci- Ⅲ Defendant: S&T Daewoo Co. sion Industries, Ltd., Pusan, South Korea and other com- Ⅲ Lead counsel: Kevin Stoops, panies going Shareholder, Sommers Schwartz back to 1987. The PC, Southfield agreement called for Daewoo to according to the lawsuit, the new pay Thomas a owners had imposed sharply re- sales commis- duced commissions. sion of 7 percent Gerard Thomas in 2009 sued for of its monthly breach of contract, unjust enrich- Gillary sales invoice for ment and enforcement of a Michi- automotive component products, gan legal doctrine affecting sales but in recent years the companies agreements. The companies agreed Every lawyer must pass the bar. had negotiated new commissions to arbitration, and a three-member that “averaged” about 4 percent. panel found last July that Gerard S&T Holdings acquired a major- Thomas was entitled to nearly Ours go on to raise it. ity stake in Daewoo Precision in $2 million in past commissions and September 2006, and renamed it $6.5 million for future commissions. S&T Daewoo Co. Ltd. Since then, — Chad Halcom What do you know about Wayne Law? Here are just a few of our most recent accolades:

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Ê/œ«ÊÀii˜Ê>ÜÊ-V œœÊ­Óä£äÊPreLaw Magazine) troller, was fined $40,000 by the you come,” he said. “The company UÊMichigan Super Lawyersʏi>`iÀÊqÊÎǙÊ>Õ“˜ˆÊvi>ÌÕÀi`Ê>ÃÊ SEC, and purchasing department went into the ground in a liquidat- -Õ«iÀÊ>ÜÞiÀÃ]Ê££™Êvi>ÌÕÀi`Ê>ÃÊ,ˆÃˆ˜}Ê-Ì>ÀÃÊ­Óä£ä® executive Paul Barnaba agreed to ed bankruptcy and you never get UÊ
ʏi>`iÀʜ˜ÊՏÞÊÓä£äÊ ˆV ˆ}>˜Ê >ÀÊ Ý>“ÊqÊ7>ޘiÊ>ÜÊwÀÃ̇ pay a judgment of $20,000. every cent on the dollar when the Heartland agreed to pay $20 mil- company folds. ̈“iÊÌ>ŽiÀÃÊÃiVÕÀi`Ê>ʙÎÊ«iÀVi˜ÌÊ«>ÃÃ>}iÊÀ>ÌiÊ>vÌiÀÊ>««i>ÃÊ lion to settle the two class actions. “But when you take out what ­™Ê«iÀVi˜ÌÊ ˆ} iÀÊÌ >˜ÊÌ iÊÃÌ>Ìi܈`iÊ>ÛiÀ>}i® Thomas Burt, partner at New York- fractions a company can pay and based Wolf, Haldendstein, Adler, Free- what its insurers pay, then you’re man & Herz LLP and attorney in the left to whatever could be collected i>À˜Ê “œÀiÊ >LœÕÌÊ i>À˜ˆ˜}Ê >Ê ° °Ê œÀÊ ° °Ê `i}ÀiiÊ vÀœ“Ê 7>ޘiÊ >ÜÊ >ÌÊ stockholder class action, said from third parties. We were afraid law.wayne.edu. œ˜Ì>VÌÊ œÕÀÊ ° °Ê
`“ˆÃȜ˜ÃÊ "vwViÊ >ÌÊ (313) 577-3937 or our Heartland recently paid off its we would inherit a goose egg, but $11 million note, and attorneys ex- we did manage to collect an eight- ° °Ê
`“ˆÃȜ˜ÃÊ"vwViÊ>ÌÊ(313) 577-0088°ÊWayne State University. Aim Higher. pect to enter an order soon to allow figure sum, and that is going to be settlement funds to be disbursed. distributed.” “It’s hard to quantify how short — Chad Halcom DBpageAD.qxp 2/14/2011 4:19 PM Page 1

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Page 12 CRAIN’S DETROIT BUSINESS February 21, 2011 Focus: Law Detroit Public Schools v. Stephen Hill, Arthur J. Gallagher & Co. et al DRIVE Developments Inc., BAE Systems v. MTS Technologies Inc. Risk management crackdown Navigating a vindication

All told, officials say nearly Venue: Wayne County Circuit Owner-CEO Larry Osentoski of Venue: U.S. District Court, gy for BAE Systems Inc. to install in $46 million went out in unautho- Court, Judge Wendy Baxter DRIVE Developments Inc. keeps all of Houston; Judge Keith Ellison the U.S. Army’s medium tactical rized wire-transfer payments to Case filed: June 27, 2008 his company, rights to his technolo- Case filed: April 2010 vehicle fleet. vendors, insurers or individuals Settlement: More than gy, his recent defense contracts and Settlement: Arbitration award But MTS fired Osentoski with- from a cash management office at $10 million his dignity after $8.1 million, March 31, 2010; out notice in 2007, did not inform Detroit Public Schools between 2001 Plaintiff: Detroit Public Schools resolving a long undisclosed reduced settlement to BAE about it for nearly two weeks, and early 2007. Lead counsel: Jerome Watson, legal dispute close, Sept. 26, 2010. then went on to complete the first The district in 2010 obtained principal and managing director, with his former Plaintiff: DRIVE Developments phase of development on that pro- millions in case evaluation Miller, Canfield, Paddock and Stone employer. Inc., Sterling Heights, and CEO gram nearly eight months late, in awards, out-of-court settlements PLC, Detroit; co-counsel W. Mack But he keeps Larry Osentoski; BAE Tactical June 2008. and various court judgments — Faison and Irene Bruce Hathaway at only some of the Vehicle Systems LP, Sealy, Texas. Osentoski, meanwhile, formed some collectible, others less so — Miller Canfield. original $8.1 mil- Lead counsel: Joseph Thompson DRIVE and completed the first and in a lawsuit to recover improper Defendants: Stephen Hill, lion award in III, partner, Watt Beckworth second phases of the project for payments. Christina Polk-Osumah (deceased), that dispute, af- Thompson & Henneman LLP, BAE a month earlier. The district Long Insurance Services LLC, Arthur ter the compa- Houston; co-counsel Andrew MTS later accused him of fraud Osentoski Edison, partner, Edison McDowell obtained a com- J. Gallagher & Co., Marsh USA Inc., nies agreed to a and misappropriating trade secrets, Bond, White, Washington & & Hetherington LLP, Houston. bined reduced settlement late last year. but an arbitration panel in March $6.5 million in a Washington Inc. doing business as Defendants: MTS Technologies Associates for Learning, eCare DRIVE (short for Diagnostics Inc., Alexandria, Va. 2010 found Osentoski had not com- case evaluation Solutions Inc., New Bridge Research and Innovative Vehicle mitted infringement and that MTS award from Lead counsel: Kenneth Multimedia Inc., Spectrum Financial Engineering) was founded in 2007 , partner, Haynes and tortiously interfered with DRIVE’s Arthur J. Gal- Broughton Group Inc., Marilyn White, and has average yearly revenue of Boone LLP, Houston business by making false and dis- lagher & Co. and Gwendolyn Washington, Sally Bond around $1.5 million. The company paraging statements against his Long Insurance and Sherry Washington. makes a Diagnostic Information Star for commercial vehicles. company and seeking to alter the Services LLC Lead counsel: Benjamin Whitfield Osentoski previously left then- Watson Management Environment, or way the Army awarded subsequent during 2010 in Jr., president, Benjamin Whitfield Jr. DIME, component offering loca- DaimlerChrysler AG in 2004 to join portions of the contract. the lawsuit stemming from wire- & Associates PC, Detroit, for Hill; tion and diagnostic services for Virginia-based MTS Technologies transfer payments tied to Stephen Jeffrey Collins, Collins & Collins Law military vehicles, much like On- Inc., developing a similar technolo- See Next Page Hill, former DPS executive direc- PC, for Associates for Learning; tor of risk management; and his Kevin Kalczynski, partner, Barris, Sott, Denn & Driker PLLC, Detroit, former finance manager, Christi- for Arthur Gallagher & Co.; na Polk-Osumah. Christopher Andreoff, Jaffe Raitt Laethem Equipment Co. et al v. Deere & Co. “A lot of it was spent on insur- Heuer & Weiss PC, Southfield, for ance or (legitimate services to the Long; James Wilson, principal, district) that just wasn’t autho- Wilson Young PLC, Detroit, for Dealership termination rized for payment. ... somewhere Marsh USA. Venue: U.S. District Court, The largest 2010 lawsuit verdict in Brothers Michael and Mark around $20 million-$25 million of it Detroit, Judge David Lawson Michigan stemming from a vehicle Laethem won that judgment along was just wasted,” said Jerome partners in Detroit-based Bond, Case filed: April 19, 2005 manufacturer ending its business with Laethem Equipment Co. and Watson, principal at Miller Canfield White, Washington & Washington Inc. relationship with a dealership had Laethem Farm Service Co. for breach Paddock and Stone PLC in Detroit is on hold — pending the outcome Verdict: About $7.4 million (with interest) nothing to do of contract, tortious interference and the district’s lead attorney. of a separate pending indictment. with Chrysler and breach of Michigan’s Farm “The rules were there, and the Partners in Bond, White, Wash- Plaintiff: Laethem Equipment Co. and Laethem Farm Service Co., Group LLC or Gen- and Utility Equipment Act, after policies were there on transfer ington & Washington prepared a eral Motors Co. Deere terminated the dealership payments. They were just being proposal under the name Associ- of Caro; brothers and co-owners Michael Laethem and Mark Instead, Mo- agreement the Laethems acquired avoided.” ates for Learning shortly before Laethem line, Ill-based from the trust of their late father. Gallagher and later the Detroit Hill’s departure from DPS in 2005 Deere & Co. Deere allegedly closed the dealer- office of Marsh & McLennan Cos. had to administer a wellness program Lead counsel: Norman Ankers, partner and litigation department (NYSE: DE), also ship and sold its assets in early 2003 assigned Hill “on loan” back to for district staff, according to fed- co-chairman, Honigman Miller known as John to J&D Implement Inc., which oper- DPS risk management as its acting eral officials. An indictment al- Schwartz and Cohn LLP, Detroit Deere World- ates JD Motorsports in Caro. The executive director. Marsh had re- leges DPS paid more than $3 mil- wide, is appeal- farm equipment maker also ob- lion to Associates for Learning for Defendant: Deere & Co. (John Ankers jected an award of $3.5 million to Deere), Moline, Ill. ing a February tained a stay on executing the court the district at the May case evalua- invoices sent to Polk-Osumah for judgment of more than $5.9 million, judgment later in the year while it tion but later agreed to a separate unapproved wire transfer pay- Lead counsel: John Allen, partner, Varnum Riddering Schmidt plus interest and legal costs, in a takes the case to the 6th U.S. Circuit ments. The vendor partners, in settlement. & Howlett LLP, Kalamazoo 2005 lawsuit by the owners of a for- The school district also obtained turn, directed payments of more mer Deere dealership in Caro. See Next Page a court judgment of $726,000 than $150,000 to Hill, who allegedly against Spectrum Financial Group had an arrangement with Sherry Inc. A judgment for $6 million Washington for a 5 percent kick- against New Bridge Multimedia Inc. back on all of the service adminis- is not yet finalized. The remainder trator’s invoice receipts from DPS. Walbridge Aldinger Co. v. City of Dearborn, Neyer Tiseo & Hindo Ltd. et al of the case against Hill and the — Chad Halcom Sinking and cracking

Venue: Wayne County Circuit In 2006, Walbridge Aldinger Co. into place. Court, Judge Prentis Edwards was general contractor on a But the Walbridge structure suf- Case filed: April 18, 2008 $33.1 million portion of the com- fered massive cracking through- Settlement: $9.1 million to the bined sewer overflow project for out the shaft before it reached its city, March 17, 2010 Dearborn and was installing a intended depth. Plaintiff/counter-defendant: massive in-ground shaft to catch Walbridge stopped work on the Walbridge Aldinger Co., Detroit sewage overflow that otherwise project in early 2007 and sued Lead counsel: David Dekker and would spill into the Rouge River Dearborn in 2008, alleging defec- Michael McNamara, partners, during heavy tive design and differing site con- Howrey LLP; co-counsel David Hayes, rain. ditions. member, Clark Hill PLC, Detroit The capture Dearborn counter-sued Wal- Counter-plaintiff: City of shaft, or cais- bridge and Neyer for breach of Dearborn son, designed contract, indemnification and Lead counsel: Gary August, by Detroit engi- professional liability, as well as partner, Zausmer, Kaufman, August, neering firm Walbridge’s two bonding compa- Caldwell & Tayler PC, Farmington Neyer Tiseo & Travelers Casualty and Surety Hills. Co-counsel: associate Matthew nies, McNaughton, and Dearborn Corp. Hindo Ltd. was of America and Federal Insurance counsel Debra Walling. more than one Co. Other defendants: Neyer, Tiseo & hundred feet Both sides brought third-party August Hindo Ltd., Detroit; Travelers wide, with con- complaints against the city’s Property Casualty Co. of America, crete walls 7.5 feet thick, and insurer on the project site, Travelers Casualty and Surety Co. of would eventually descend more Travelers Property Casualty Co. of America, Federal Insurance Co. than 100 feet into the ground America. Lead counsel: K. Clark Schirle, through a sinking method of con- A case evaluation panel in the Clausen Miller PC, Chicago, for struction. lawsuit offered $1 in damages to Travelers Property; James Case, The method involves building a Walbridge, but awarded $500,000 member, Kerr Russell & Weber caisson in sections and using its PLC, Detroit, for NTH. own weight to sink the shaft See Next Page 20110221-NEWS--0012,0013-NAT-CCI-CD_-- 2/18/2011 9:56 AM Page 2

February 21, 2011 CRAIN’S DETROIT BUSINESS Page 13 Focus: Law U.S., Angela Maher, Anastasia Savka-Klovski v. Ortho-McNeil Pharmaceutical U.S., Gary Spivack v. Ortho-McNeil Pharmaceutical, Johnson & Johnson

From Previous Page Topamax drug marketing The panel awarded $6.9 million A so-called “doctor-for-a-day” the state. Former Ortho-McNeil ny allegedly hired doctors to join in damages to DRIVE, plus anoth- Ⅲ Venue: U.S. District Court, program promoting Ortho-McNeil- sales representatives turned whis- sales reps in visits to providers and er $500,000 in costs and attorney Boston; Judge William G. Young Janssen Pharmaceutical’s prescrip- tle-blowers Angela Maher of Liv- promoted off-la- fees and $400,000 to Osentoski per- Ⅲ Case filed: 2003, 2004 tion drug Topamax led to a payday ingston County and Anastasia Sav- bel uses for Topa- sonally, and more than $300,000 in Ⅲ Settlement: $81.5 million; for Michigan plaintiffs in a lawsuit ka-Klovski of Washtenaw County max in 2001-03. costs and fees to BAE. $9.5 million to Michigan plaintiffs, April 29, 2010 tied to off-label uses for the drug. also collected nearly $9 million, out Troy-based BAE and DRIVE went to federal Ortho-McNeil-Janssen and Rari- of an $11 million-plus share of the Frank, Haron, court in Houston to enforce the ar- Ⅲ Plaintiffs: Angela Maher, Anastasia Savka-Klovski, Gary bitration award. They reached a tan, N.J.-based Ortho-McNeil Phar- settlement they split with Virginia Weiner & Navarro Spivack settlement that enforces all of the maceutical LLC, both subsidiaries physician Gary Spivack. PLC represented Ⅲ Lead counsel: David Haron, arbitration panel’s findings except of Johnson & Johnson, agreed last The company also paid a the two Michi- principal, Frank, Haron, Weiner April to pay a combined $81.5 mil- $6.14 million fine under a plea deal- gan sales repre- the financial award, which was & Navarro PLC, Troy; Erika substantially reduced. lion to resolve criminal and civil with the U.S. Department of Justice, sentatives. The Kelton, partner, Phillips & claims related to Topamax. plus a $75.4 million payout to re- attorneys in the Osentoski has won a four-year ve- Cohen LLP, Washington That includes $1.6 million to help solve false claims civil allegations. Haron case negotiated hicle contract with the U.S. Army Ⅲ Defendants: Ortho-McNeil- pay Medicaid claims in Michigan — The government alleged that Ortho- an 18 percent share of collectible Special Operations Command worth Janssen Pharmaceuticals about $584,000 directly to the state’s McNeil promoted the sale of Topa- fees from the federal government’s up to a ceiling value of $6 million Ⅲ Lead counsel: Christopher last summer. Wray and Mark Jensen, King & Medicaid Trust Fund and another max, an epilepsy drug, for off-label share and a small part of allocated “I don’t think everyone knows Spalding LLP $1 million for the federal govern- psychiatric uses through its “doc- whistle-blower money. we were vindicated yet, in the de- ment to pay its share of Medicaid in tor-for-a-day” program. The compa- — Chad Halcom fense community, the way word got around while this was still in litigation,” he said. “There have been some challenges, but we’re TheraMatrix Physical Therapy v. Blue Cross Blue Shield of Michigan still moving forward.” — Chad Halcom Health care anti-competitive practice

Blue Cross Blue Shield of Michigan Ⅲ Venue: Oakland County Circuit Days after reaching the Ford also contends Blue Cross damaged continues to appeal a trial court Court, Visiting Judge Edward agreement, TheraMatrix learned its effort to reach a similar agree- victory for outpatient physical Avadenka Blue Cross was backing out on a ment with Chrysler. The insurer therapy provider TheraMatrix Physi- Ⅲ Case filed: Aug. 4, 2008 2004 vendor agreement with Thera- challenged the jury award, and the cal Therapy. At nearly $5.9 million, Ⅲ Verdict: $4.8 million July 22, Matrix for third-party administra- case awaits legal briefs before the it marked the largest judgment for $1 million sanctions Nov. 15; tive services and advised the compa- Michigan Court of Appeals. the year at Oak- under appeal. ny it had become “damaging” to “Our position is there was no From Previous Page land County Cir- Ⅲ Plaintiff: TheraMatrix Services Blue Cross’ business interests, ac- breach of contract and no tortious Court of Appeals in Cincinnati. cuit Court. Inc., Pontiac cording to court records. Blue Cross interference,” said Robert Hurlbert, The Laethem companies also A jury Ⅲ Lead counsel: Rodger Young, also removed TheraMatrix from its member at Dickinson Wright PLLC and sued J&D and obtained a verdict in awarded partner, Young & Susser PC, provider network in 2006 but rein- co-lead counsel for Blue Cross. Tuscola County Circuit Court for dam- $4.5 million for Southfield; co-counsel Joel Serlin, stated it in mid-2007. TheraMatrix — Chad Halcom ages totaling more than $20 million . breach of con- shareholder, Seyburn, Kahn, Ginn, The companies settled in 2010 for tract and inter- Bess and Serlin PC, Southfield. undisclosed terms. ference with Ⅲ Defendant: Blue Cross Blue Norman Ankers, partner and co- TheraMatrix’s Shield of Michigan, Detroit chair of the litigation department at business rela- Ⅲ Lead counsel: Robert Hurlbert Honigman Miller Schwartz and Cohn Young tionships, after and Joseph Fink, members, LLP, who represents the Laethems, Blue Cross scrapped a vendor Dickinson Wright PLLC, Bloomfield said his firm is opposing a defense agreement with the company and Hills; co-counsel Leo Nouhan, 800-292-3831 request for a credit against the removed it from the insurer’s net- senior attorney at Blue Cross. Deere verdict based on the J&D Set- work. Visiting Judge Edward indiantrails.com tlement, as well as a claim that the Avadenka in November added agreement to help Ford Motor Co. verdict form was confusing. more than $990,000 in attorney fees lower physical therapy costs for No date is set for the appeals to that sum. its employees. Ford is self-insured court to hear arguments. The dispute traces back to 2005, but uses Blue Cross as a third-par- — Chad Halcom when TheraMatrix finalized an ty administrator.

ONE HU G ND IN R T E A D R Y B E

E A

L R

E U.S. Securities and Exchange Commission v. Charles Conaway, John McDonald S C 100 Kmart Corp. inventory practices

From Previous Page Ⅲ Venue: U.S. District An alleged strategy to slow down Court, Detroit/Ann Arbor; payments to its vendors and then from Walbridge to the city (along Judge Robert Cleland, blame unpaid balances on a software with $1,654,834 in contract pay- Magistrate Judge Steven problem led to a combined $5.62 million ments Dearborn still owed Wal- Pepe in civil judgments against both the for- bridge, which were forfeited), plus Ⅲ Case filed: Aug. 23, 2005 mer CEO and CFO of Kmart Corp. $1.5 million to the city from the Ⅲ Total settlement: $5.62 mil- Charles Conaway, CEO of the Troy- Neyer firm. lion, Nov. 15, 2010 based retailer, and CFO John McDon- All sides accepted the case eval- Ⅲ Plaintiff: U.S. Securities ald were both fired in March 2002, sev- uation award except Travelers and Exchange Commission eral weeks after Kmart filed for Property Casualty, but the insurer Ⅲ Lead counsel: Alan Chapter 11 bankruptcy reorganization. later agreed to an award of Lieberman, SEC attorney, The U.S. Securities and Exchange Com- $5.5 million to the city in a facilita- Washington; co-counsel: mission claimed in a 2005 civil action Comfort and tion hearing. Assistant U.S. Attorney Ellen that Conaway and McDonald misled in- Christensen, Detroit, and Walbridge took Travelers Prop- vestors about an inventory overbuy Robert Dodge for the SEC. erty to trial later in the year, as an and didn’t inform investors of a strate- Ⅲ Defendants: Charles t
$IBSUFST additional insured under the city’s gy to slow down vendor payments in Luxury insurance policy, and lost. Conaway, CEO of Kmart Corp., 2000-2002; John the months before its bankruptcy. t
5PVST “It was really bad for Walbridge McDonald, Kmart CFO The case itself was on the legal slow — they just got killed — but a good 2001-02. track for a while — the SEC took three t
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result for the city,” said Gary Au- Ⅲ Lead counsel: Scott years to bring the lawsuit, then attor- 00 gust of Zausmer, Kaufman. “The Lassar and Hille Sheppard, neys obtained at least six time exten- t
$POWFOUJPO
4FSWJDFT SAVE $100 OFF shaft is still cracked and broken in partners, Sidley Austin LLP, sions on discovery or responses to mo- the ground, and the city is working Chicago, for Conaway; John tions. A motion to dismiss was pending t
$PSQPSBUF
&WFOUT with (the state) on alternative Sylvia, member, Mintz Levin almost a year before it was denied in Cohn Ferris Glovsky and Contact Indian Trails for details. Must use this plans for dealing with that sewer 2006, and Conaway took his defense all t
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4FSWJDF promotional code at time of booking: 2011CDB-FEB overflow outfall in the river. Popeo PC, Boston, for McDonald. — Chad Halcom See Kmart, Page 14 20110221-NEWS--0014-NAT-CCI-CD_-- 2/18/2011 12:24 PM Page 1

Page 14 CRAIN’S DETROIT BUSINESS February 21, 2011 Focus: Law Mission 24/7! Anthony Adeleye v. Michigan Department of Transportation Are your attorneys available 24/7? Crumbling bridge concrete

It could happen. A $2.5 million settlement with Venue: State of Michigan Court by someone on the overpass. But the Michigan Department of Trans- of Claims, Judge Laura Baird the court granted Adeleye’s motion The attorneys at portation was awarded last August Case filed: 2005 for summary disposition on the is- McDonald Hopkins are to Anthony Settlement: $2.5 million, Aug. sue of liability after the state dis- on a mission to provide Adeleye, whose 16, 2010 carded the concrete chunk, elimi- exceptional responsiveness windshield was Plaintiff: Anthony A. Adeleye, M.D. nating the evidence. to every client. struck by a Lead counsel: David Christensen, According to an MDOT report re- ® chunk of con- partner, Michigan Auto Law, leased in October 2010, of 4,401 state Attorneys on a Mission crete that fell Farmington Hills. Co-counsel: highway bridges, 429 are structural- Your mission is our mission. We never lose sight of it. from the bottom Thomas Hay, partner, Hay & ly deficient and 883 are functionally of a Southfield O’Rourke PC, Lansing obsolete. The overpass in Adeleye’s Freeway (M-39) Defendants: Michigan case was listed as functionally obso- overpass in Department of Transportation lete, which means the bridge design Christensen April 2005 while Lead counsel: Assistant Attorney is outdated. A business advisory and advocacy law firm® he was driving General Philip Bladen, Lansing Beginning this spring, MDOT 39533 Woodward Avenue, Suite 318, Bloomfield Hills, MI 48304 • 248.646.5070 down the Lodge Freeway (M-10). will close M-39 between M-10 in parts of the face), broken facial Carl J. Grassi Stephen M. Gross The concrete went through Adel- Southfield and I-96 in Detroit for President Detroit Managing Member eye’s windshield, striking him in bones and bowel injuries. road reconstruction, replacement the face. His injuries included head The state argued there was no ev- of utilities under the freeway and Chicago • Cleveland • Columbus • Detroit • West Palm Beach injury, trigeminal neuralgia (a stab- idence the concrete was from the the replacement of bridges. www.mcdonaldhopkins.com bing or electric-shock-like pain in bridge and could have been thrown — Shawn Wright

Austin v. Houseman Construction Co, Assemblers Inc., Probuild of Delton LLC Laborer’s death On March 21, 2008, 19-year-old Case filed: July 2008 Scott Austin, working as a general Venue: Wayne County Circuit laborer, fell 60 feet to his death Court, Judge Amy Hathaway through an unmarked and unse- Verdict: $2.3 million per cured hole on the roof of a new six- arbitration panel, May 2010 story apartment building near the Settlement: $1.625 million, per Wayne State University campus, in De- negotiated “high-low” agreement troit. It was the Studio One develop- Plaintiff: Mary Austin, mother of ment off Woodward Avenue. the late Scott Austin Jr. Assemblers Inc. was the precast Lead counsel: Jules Olsman and concrete subcontractor that was Wolfgang Mueller, partners, responsible for enlarging the hole Olsman, Mueller, Wallace & through which Austin fell. ProBuild MacKenzie PC in Berkley of Delton was the subcontractor for Defendants: Assemblers Inc., installing studs and drywall. As- Probuild of Delton LLC semblers’ employees and its owner Lead counsel: James Hunt with admitted negligence for cutting Assemblers Inc. in Troy and the hole and failing to secure and William Shailor at Probuild of label it. A $6,100 fine was levied Delton LLC in Farmington Hills against the company by the Michi- gan Occupational Safety and Health Administration. General contractor Houseman Construction Co. was in- sulated from the other defendants’ liabilities in the case. The case revealed a roof curb cover was put over the hole, but when Austin moved it, he fell through the roof and into the 60- foot shaft directly below. Through a wrongful-death case, Olsman Mueller Austin’s family wanted Assem- blers to concede that it was respon- blers, acknowledged in the pro- sible for the death of their son. ceedings that the company was re- Both Steven Bishop and Robert sponsible for a safe workplace. Ziembo, who worked for Assem- — Marti Benedetti Buildings Spoiling Your Business? Aligning real estate assets to your changing business Lease Renegotiation Kmart: ‘Project SID’ plans is crucial in this economy. Plante Moran CRESA Tenant Representation ■ From Page 13 will create a real estate strategy that adds to your Incentives the way to a jury trial in 2009. ventory, and created a liquidity bottom line. Since we do not represent buildings or Kmart is now part of Hoffman problem. Sale Leaseback Estates, Ill.-based Sears Holdings The SEC accused the pair of mis- landlords, our unbiased approach will focus solely on Corp. Conaway paid $5.5 million representations and omissions your success. (248)223-3500 pmcresa.com under an agreement reached with about the slowdown, and of direct- Project Feasibility regulators in November, and Mc- ing Kmart’s employees to tell ven- Donald agreed to $120,000 in fines dors the missed payments were due Lease Administration and a five-year ban on working for to tech glitches. public companies, shortly before Magistrate Judge Steven Pepe Buyer Representation Conaway’s jury trial. ordered Conaway last March to At issue was the retailer’s al- pay more than $10.3 million, but Project Management leged “Project slow-it-down,” de- Conaway appealed. He later veloped by Kmart executives in dropped the appeal and agreed to late 2001 to extend the terms of an amended judgment of $5.5 mil- payments to vendors. An $850 mil- lion — $2.5 million in fines and lion inventory overbuy had deplet- $3 million to repay a previous ed much of a credit line on which $5 million loan from Kmart. Kmart relied to stock holiday in- — Chad Halcom 20110221-NEWS--0015-NAT-CCI-CD_-- 2/18/2011 9:48 AM Page 1

February 21, 2011 CRAIN’S DETROIT BUSINESS Page 15 Extra TRACKING TIME IS MONEY Software-as-service companies tap a new niche, Page 17

growing small businesses A CONVERSATION WITH Success behind the scenes

Joe Faris, Motor City Private-label sales hold potential for producers Denim Co. BY NATHAN SKID CRAIN’S DETROIT BUSINESS

Joe Faris is co-owner and senior hesterfield Township- designer of Sterling Heights-based based Achatz Handmade Pie Motor City Denim Co., which plans to C Co. saw its revenue in- launch its first collection of “Industrial crease by 49 percent in 2010, Couture” for men and women April 1. but most of that growth had (An original Feb. 1 date was delayed.) nothing to do with an increase The company is the culmination of a in sales of Achatz-branded longtime dream for Faris, a veteran pies. designer for such brands as Bugle Boy In fact, most of those sales and Ralph Lauren, as well as a 2008 had nothing to do with the “Project Runway” contestant. Achatz brand at all. Faris went to a Sterling Heights After receiving certification manufacturer of protective coverings from the U.S. Department of Agri- for robots, TD Industrial Coverings Inc., culture in 2010, co-owner Wendy to make the project happen. After Achatz got an unexpected some retooling, Motor City Denim was in business. phone call from a company asking if she had the capacity TDIC President Mark D’Andreta projects to make 5,000 pot pies a day — Motor City, a TDIC subsidiary, will have the daily volume necessary to sales of up to $350,000 for 2011 and give his second-stage business a boost. fill a private-label order of 300,000 units. DetroitMakeItHere.com, Crain’s site “We hired 30 temporary em- for creative entrepreneurs, caught up ployees to help fill the order,” with Faris. Here are excerpts from the interview with freelancer Ellen Piligian: Achatz said. “Now those tem- porary employees have been NATHAN SKID/CRAIN’S DETROIT BUSINESS What has been your biggest challenge in working 50 hours a week since Some of the pot pies from Wendy Achatz’s business don’t bear the Achatz Handmade Pie Co. name, but the making this happen? First, finding a September.” private-label product line helped increase company revenue by almost 50 percent in 2010. partner, and now, sales. There are so Achatz almost decided that many pieces to the puzzle. One $100,000 to obtain a USDA li- Working with a familiar sup- challenge with RedFly (an earlier Faris cense was too much, but she plier — such as one that might business) was that I did $1.2 million in wanted to sell pot pies under ACHATZ PRIVATE-LABEL SALES RECIPE already be selling its branded sales the first year. I exceeded the Achatz brand, and a USDA Want to become a private-label seller? Here’s what Wendy Achatz products to the retailer — is expectations. Then I needed to finance license is mandatory because recommends: one way to help make that hap- it. You can have the greatest product, the pies contain chicken. Ⅲ Get your name out by going to and get in touch with that pen. but without the right sales force or As it turned out, getting the marketing, it’s like a tree falling in the national trade shows such as person. “They want to become as ef- license reaped benefits in a forest. That’s where “Project Runway” the Fancy Food Show and the Ⅲ It’s better to be pushy than ficient as possible, and if they way she hadn’t foreseen. “We National Restaurant helped. I got noticed. mousey. There is no such thing trust a company and like their were put on the USDA’s web- Association Show. as overexposure. product, they see a benefit in site list of certified companies, Ⅲ Send goody baskets to the How are you marketing Motor City Ⅲ Do not over-promise and having them make their pri- Denim? Right now, it’s social media. and we didn’t even know it,” different regions within the under-deliver. As you form a vate label,” Zilko said. We are at the height of where social she said. “That was how (the customer’s territory. relationship with a company, be Garden Fresh generated rev- media is changing the landscape of customer) found us.” Ⅲ Do not blast out an e-mail to honest about what it can enue of about $89 million in advertising. ... (Of course,) I would Achatz could not share the a multitude of contacts. Do your expect. 2010, and Zilko said he expects love to spend $50,000 and have an name of the customer that homework. Find out how to Ⅲ Be nice but don’t be a $105 million in 2011. The salsa ad in Vogue. called her because of the pri- approach a specific buyer. A pushover. Don’t agree to do good way to do that is to find something that is bad for your maker’s private-label business vate-label agreement. What are your thoughts on Detroit out who signs for the product business. makes up about 20 percent of Private label refers to mak- reinventing itself as a garment district? total sales. ing products for use under an- Some of these suppliers of the Big “Take a strategic approach other company’s brand — its without bringing in private in- calls. Two years later, with Three can look at going back into and embrace it,” he advised private label. “Store brands” vestors,” she said. flour prices skyrocketing, she garments. There’s a big need for that. other businesses thinking is another term associated Achatz has two private-label got a phone call asking if she … If you’re a smaller garment company about exploring private-label with this activity. Though not clients that make up 31 percent would like to start production. and you need to manufacture even sales. “To ignore private-label limited to food, one example of the company’s sales, which “The moral is, you never 1,000 pair of jeans, that’s hard to find. business is to do so at your own ... We are easier to reach from New would be a product such as hit $7.7 million in 2010, up from know if someone who told you peril.” York than China. I can design chicken noodle soup that ap- $5.2 million in 2009. ‘no’ will call you again with a Garden Fresh has at least something and have it sewn by the end pears on the shelf under a Mei- Achatz also makes frozen different answer,” she said. nine national private-label of the day. That’s power. There’s a jer or Kroger label. Those prod- fruit pies for the Midwest divi- Achatz is now looking to ex- customers, though it would tremendous opportunity for this city to ucts usually aren’t made by sion of a high-end national gro- pand its reach into that cus- not divulge who those cus- dive heavy into the garment industry. the grocer, but rather a manu- cery chain, an account that tomer’s mid-Atlantic division. tomers are. facturer contracted by the took years to develop. Dave Zilko, vice chairman of What can you tell others about taking a Zilko says working with a chain. For her first attempt, she Ferndale-based Garden Fresh leap like this? One really good piece of private-label client is a good The Achatz pot pies are pre- made a sales pitch to the gro- Gourmet Inc., said he’s found advice that took me a while to learn way to learn how to get a pared to a customer-specified cer’s buyer but was told her that large retailers want to ap- is: If you need a partner, look for one branded product onto shelves recipe and frozen before ship- pies cost 10 cents too much, a proach their supplier base ra- with qualities you don’t have. You of retailers. ping. Wendy Achatz said the difference she could not make tionally, meaning they want to don’t need another designer to be “You work more closely with private-label industry can be a up at the time. hold fewer meetings, make few- your partner. I was very fortunate to them, you stay in contact more rewarding path to increased She kept in touch with them er purchase orders and operate have met Mark, to have the vision that often, and it gives you a better we can do this here. It’s been very sales. to show good faith, sending fewer trucks in order to hard to find. “It’s a vehicle for us to grow samples and making phone streamline their operation. See Private label, Page 16 20110221-NEWS--0016-NAT-CCI-CD_-- 2/18/2011 9:51 AM Page 1

Page 16 CRAIN’S DETROIT BUSINESS February 21, 2011 Second Stage Extra Private label: Success behind scenes ■ From Page 15 Ó䣣Ê,"1*Ê/  /- understanding of their business model,” he said. PRIVATE-LABEL RESOURCES “There have been times where " Ê-
 Ê "7 Ⅲ have programs targeted at smaller, we started with a retailer as a pri- The Private Label Manufacturers Association offers directories of potentially new suppliers. ALDI, for vate label and worked our way brokers and sellers for members, example, has workshops and into the store from there.” along with other market research, seminars for smaller businesses In the Private Label Manufacturing reports on best practices and other because the company is always Association’s 2010 Yearbook, an an- information for private-label looking for untapped products from nual report on the industry, the suppliers and companies interested smaller businesses, said Dane New York-based association said looking to break into private-label Twining at PLMA. store-brand units reached a his- sales. PLMA also holds conferences Ⅲ PLMA-recommended consultants: toric market-share high of 23.7 per- and shows that allow suppliers to — Mike Brouillard, president, MBC cent at supermarkets in 2009. Pri- connect with buyers. Consulting, Orchard Park, N.Y.; vate-label units were up Ⅲ Trade publication Private Label (716) 662-3289, mikebrouillard @mbc-consulting.com 6.4 percent, compared with a Buyer and its sister publication Contract Manufacturing & Packaging — Edward “Ned” Dunn, president, /
 ʼ Ê
Ê"1/ 1.7 percent decline for national offer company information, market Dunn Consulting, Charlotte, N.C.; /"Ê/ Ê
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° brands. reports and research on private label (704) 554-7499, [email protected] “In terms of dollars, store buyers and the contract — Tom Stephens, president, Brand Groups of 15 or more can brands accounted for 90 percent of manufacturers that supply them. Strategy Consultants, North York, now purchase tickets for all the revenue gains in supermar- Private Label Magazine, Progressive Ontario; (416) 391-1635, kets, adding $1.5 billion in incre- Grocer’s StoreBrands and tomstephens 2011 Tigers games before mental sales (2.9 percent), while StoreBrandsDecisions.com are other @brandstrategyconsultants.ca individual tickets go on sale.* national-brand sales were virtual- sources of industry information. — Jim Wisner, president, Wisner ly flat (0.1 percent),” the report Ⅲ Retailers have their own ways of Marketing Group, Libertyville, Ill.; UÊÊÀœÕ«Ê̈VŽiÌÃÊ>ÃʏœÜÊ>ÃÊf™Ê«iÀÊ̈VŽiÌ said. picking up private-label (847) 680-3688, manufacturers, but some of them [email protected] UÊ->ÛiÊÕ«Ê̜ÊfxÊ«iÀÊ̈VŽiÌÊvœÀÊÃiiVÌÊ}>“ià Dane Twining, PLMA’s director UÊÊ
‡ÞœÕ‡V>˜‡i>ÌÊ«>ÀÌÞÊÀœœ“ÃÊ>ÀiÊL>VŽII of public relations, recommended trade shows as a way for manufac- UÊ œœÃiÊvÀœ“ÊÃiÛi˜Ê`ˆvviÀi˜ÌÊ«ˆV˜ˆVÊ>Ài>à turers to gain private-label busi- UÊÊ*>ÀÌÞÊÃՈÌiÃÊ>Û>ˆ>Li ness. “Trade shows tend to be where More information at tigers.com/groups that exposure takes place,” Twin- I"«i˜ˆ˜}Ê >ÞÊ}ÀœÕ«Ê̈VŽiÌÃÊ>Û>ˆ>LiÊ>ÃÊ«>ÀÌÞÊÃՈÌiÊ«>VŽ>}iÃʜ˜Þ° ing said. “There are certain indus- II,iÃÌÀˆV̈œ˜ÃÊ>««Þ° tries where the commerce and ways of doing and finding business ­Î£Î®Ê{Ç£‡
Ê­ÓÓxx® have moved online, but that is not Detroit + = the case in this particular indus- try.” Twining said attendance at PLMA’s Private Label Trade Show, held annually in downtown Chicago, has increased by 10 per- cent every year over the past three growing with a strong (& fun!) years. Wal-Mart Stores Inc., Costco Whole- MI based company! sale Corp., Meijer and Sam’s Club send representatives and buying teams to the show, he said. “The record sales growth! retailers at the shows have the scale to develop their own private- label program and are looking for waking up every morning! new products.” While Zilko and Achatz tout pri- vate-label accounts, each warns against relying too heavily on BIGGBY COFFEE Franchise Info them. “The problem is they could drop www.biggby.com you at any moment for the next big thing,” Achatz said. “And even if the consumers are able to recog- nize a difference, they won’t be able to ask for our product by name.” Achatz said the ultimate goal is to increase brand awareness. “The dream is for a grocery chain to ask for your brand by name,” she said. “That way, they couldn’t get rid of me if they tried.” Zilko said it’s good to know when to say “no” to private-label busi- ness. “If a client wants something that is out of the scope of your manufacturing model, don’t set up a new line for a private label,” Zilko said “The business isn’t guaranteed.” However, Zilko said he sees pri- vate label as vital. “Either you will go get that busi- ness or your competitor will,” he said. “To those who say it will eat 248.855.1730 | 888.844.3916 into your sales, I say either you will cannibalize your own sales or 32940 Middlebelt Road someone else will make that mon- Farmington Hills, MI 48334 ey for you.” www.greis.com Nathan Skid: (313) 446-1654, [email protected] 20110221-NEWS--0017-NAT-CCI-CD_-- 2/18/2011 9:50 AM Page 1

February 21, 2011 CRAIN’S DETROIT BUSINESS Page 17 Second Stage Extra Litigation Experience Michigan small biz center boosts In Your Corner. teams to help businesses grow

BY NANCY KAFFER form financial and strategic spe- CRAIN’S DETROIT BUSINESS HOW TO CONNECT cialist (teams),” she said. The SBTDCs cover all 83 coun- Free counseling: Small and Armed with a jobs-based tax ties in Michigan. The teams have midsize businesses with nine or credit from the Michigan Economic more employees can contact the added nine finance and strategic Development Corp., Auburn Hills- appropriate regional office at specialists, who are regionally based Ralco Industries Inc. was look- www.sbtdc.org based, Deamud said. With those ing to grow — and that meant find- new employees in place, the center ing financing. So the tool and die In 2010, the SBTDC’s Growth hopes to increase its client consul- manufacturer consulted the Michi- Group counseling service worked tation hours — 2,403 in 2010 for the gan Small Business and Technology with 161 businesses, and its Manu- growth team and 763 for the manu- Development Center. facturing Assistance Team service facturing team — by 13,500 hours With the help assisted 96 businesses. And thanks over the next two years and its cap- of an SBTDC fi- to a $1.6 million grant from the fed- ital formation by $90 million in the nancial consul- eral government — part of the next two years. tant, the compa- Small Business Jobs Act — the The teams assisted with ny was able to centers will increase their offer- $247 million in capital formation present a top- ings in the next year, said Jennifer in 2009. Numbers for 2010 were not notch image to Deamud, associate director of the yet available. the banks it state SBTDC network. “We targeted businesses in need asked for loans, Both teams work with second- of assistance in accessing capital, Brett Rendeiro said Ralco Presi- stage companies, and the Growth developing strategic plans, deter- dent Jim Piper. Group, founded last year, specifi- mining market diversification tac- Piper “We’d never cally focuses on second stage. tics, as well as assistance in done this before,” he said. “They “With two powerful teams here shoring up relationships with fi- showed us how to present our- in Michigan to support manufac- nancial institutions,” Deamud selves effectively. ... They made turing and second-stage compa- said. “Also ... comparing financials sure we understood, from the nies, when we were awarded the to industry benchmarks, develop- banks’ perspective, what are they $1.6 million, we started looking at ing what-if scenarios for financial looking for, and from our perspec- how can we use that money to cre- impact of new initiatives.” tive, what can we provide? Basical- ate jobs, create impact, and decid- Nancy Kaffer: (313) 446-0412, Contact Brett at [email protected] ly they walked us through.” ed money would be best utilized to [email protected] I Novi I Grand Rapids I Kalamazoo I Grand Haven I Lansing In tough economy, software-as-service companies find tracking time is money

BY CHAD HALCOM access logins. federal enforcement. CRAIN’S DETROIT BUSINESS Dykstra said time and atten- Ciapala’s two companies, In- dance products account for about fotronics in Farmington Hills and Two competing small business- half of Cincinnati Time’s annual Attendance on Demand in Livonia, es in Farmington Hills report revenue; the rest is in building ac- together have about 50 employees. growth by tapping a new niche cess, video surveillance and park- He said they are about evenly di- Do the software market for cash-strapped ing attendance systems. vided between traditional licensed companies seeking to manage His company also sells automat- time management software at In- their payroll costs. ed payment stations made by Novi- fotronics, and the leased or sub- Cincinnati Time Systems Inc., a based Federal APD Inc. for munici- scription products at Attendance dealer-distributor of time and at- pal parking areas. Dykstra said on Demand. Right Thing tendance monitoring systems for the company has sold products in Unlike Cincinnati Time, he said, employers, reports revenue has the past two years to Dearborn, Infotronics has stayed away from grown from $2 million in 2008 to Royal Oak, Sault Ste. Marie and municipal work but has seen $3.5 million in 2008. the Flint Mass Transportation Au- steady growth in health care, its Much of that growth was driven thority. The company also services largest industry segment, as well Ethos Week by subscription-based software for all Detroit city-owned parking lots as hospitality, manufacturing and client companies to manage em- managed by Park-Rite Inc. food production. ployee attendance, said President- “(But) for every 10 new cus- Both companies also reported CEO Mark Dykstra. tomers, probably six or six and a subscription software sales growth March 14 -18 Nearby Infotronics Inc. also has half are coming in for hosted time- through a combination of promo- grown in the same market. Majority attendance products,” he said. tion at trade shows, advertising in owner and President Chris Ciapala “People in business have less mon- industry publications, and network- cob.emich.edu helped launch Attendance on Demand ey, and something without com- ing and sales referrals through pro- Inc. for leased attendance systems in mitment at a fraction of the price fessional employer organizations, 2006 and has since grown it to 3,000 of (licensed software) holds some payroll service agencies and others online clients, managing nearly appeal.” who have clients interested in atten- 250,000 employees. Both companies said the reces- dance management. Cincinnati Time is a legacy com- sion helped drive subscription Ciapala said some subscribers pany of the former Cincinnati software growth, since human re- have grown their use of the product Time Recorder in Ohio, acquired sources managers have an easier as the economy recovers and they by Amano Technologies Inc. in the time gaining approval for small have more employees to manage. 1990s. It is a retailer for California- monthly fees versus a larger pur- “After the market crash, we saw based NovaTime Technology Inc., a chase and installment. significant terminations among direct competitor of Attendance on Also driving growth is height- customers throughout the summer Demand. ened employer interest in main- of 2009,” he said. “I don’t think it’s Both businesses sell software-as- taining work records to comply come back all the way, but since a-service, or software hosted on an with the federal Fair Labor Stan- the fall of 2010 to now, we definite- WJR’s Paul W. Smith offsite server that customers lease dards Act, Family Medical Leave ly seem to be in a moderate climb.” on a subscription basis to monitor Act and other labor laws that have Chad Halcom: (313) 446-6796, EMU’s David Mielke employee attendance and remote seen recent changes or increased [email protected] 20110221-NEWS--0018-NAT-CCI-CD_-- 2/18/2011 9:48 AM Page 1

Page 18 CRAIN’S DETROIT BUSINESS February 21, 2011 CRAIN'S LIST: LEADING SMALL- BUSINESS LENDERS 7(a) Guaranty-loan activity by lender, fiscal first quarter 2011; ranked by number of SBA loans in Michigan

Number of approvals Total number of loans/ Preferred Total loaned Lender SBA Rank Lending institution amount Regular Program Express Huntington Bancshares Inc. 158 5 35 118 1. Columbus $43,803,600 BUSINESS PROPERTY OWNERS: J.P. Morgan Chase & Co. 96 11778 2. New York $31,655,900 Lake Michigan Financial 50 61727 ARE YOU PAYING TOO MUCH 3. Corp. $31,011,399 Petoskey Citizens Republic Bancorp 45 31527 IN PROPERTY TAXES? 4. Lansing $10,314,500 Fifth Third Bancorp 35 81512 5. Cincinnati $15,684,700 With the recent decline in Michigan property values, many owners, tenants and managers are now in 6. TCSB Bancorp Inc. 26 15 0 11 a position to appeal their inflated tax assessments and reduce their property tax burdens. SPC can Traverse City $9,503,800 help. Our specialized attorneys have the legal knowledge and valuation expertise to successfully Comerica Bank 18 4140 7. Detroit $16,198,500 represent clients in all types of commercial, office, multi-tenant, and industrial property tax appeals 8. Capitol Bancorp Ltd. 15 10 4 1 and disputes. For more information, contact: Lansing $7,907,000 Superior Financial Group LLC 14 14 0 0 Jerome P. Pesick [email protected] H. Adam Cohen [email protected] 9. Walnut Creek $162,500 First State Bank 13 3010 10. Eastpointe $5,010,000 Charter One Bank 13 0013 10. Troy $1,200,000 Chemical Financial Corp. 12 1011 12. Midland $3,209,300 Contact SPC for a free preliminary review PNC Bank 11 083 380 North Old Woodward Avenue, Suite 120, Birmingham, MI 48009 13. Cleveland $4,494,400 t: (248) 646-0888 f: (248) 646-0887 e: [email protected] www.spclaw.com of your property tax assessment! Mackinac Financial Corp. 11 704 13. Manistique $6,279,100 Hillsdale County National 11 605 13. Bank $6,223,700 Hillsdale Horizon Bancorp 10 505 16. Michigan City $4,730,300 KeyCorp 9 144 17. Cleveland $5,196,800 Independent Bank Corp. 8 800 18. Bloomfield Hills $2,949,200 Wells Fargo & Co. 7 151 19. San Francisco $3,545,500 Old Mission Bancorp Inc. 7 106 19. Sault Ste. Marie $1,063,000 6WDUW6DYLQJ United Bancorp Inc. 6 303 21. Tecumseh $1,879,500 7RGD\ZLWK(QHUJ\ Borrego Springs Bank NA 6 150 21. La Mesa, Calif. $5,886,500 (IÀFLHQF\,QFHQWLYHV United Community Financial 6 060 21. Corp. $3,378,000 Grand Rapids Mercantile Bank Corp. 6 033 ITH COLDER TEMPERATURES, now is the 21. Grand Rapids $1,975,000 Wtime to start saving energy and saving Honor Bancorp Inc. 6 204 money by boosting the energy efficiency of your 21. Honor $437,000 natural gas heating system. Commercial Bank 6 402 21. Alma $2,887,900 Incentives are available for: Hastings City Bank 5 104 • &URNACEANDBoiler tune-ups 27. Hastings $456,000 • Boiler modulating burner control retrofits Founders Financial Corp. 4 103 • Steam trap repairs 28. Grand Rapids $635,000 • Programmable thermostats Bay Bancorp Inc. 4 301 Special programs offered for large and small businesses. 28. Gladstone $1,566,400 Michigan Schools & 4 301 For more information 28. Government Credit Union $1,140,600 Clinton Township related to your business: First Financial Bank 4 013 28. $1,180,000 www.consumersenergy.com Hamilton, Ohio 28. First Michigan Bancorp Inc. 4 400 (877) 607-0737 Troy $7,001,600 ቢ 720 163 178 379 e-mail: [email protected] Totals $294,706,700

This list was compiled from information provided by the Michigan district office of the SBA for fiscal first quarter, Oct. 1, 2010 - Dec. 31, 2010. The Preferred Lender Program allows selected lenders to make certain SBA loans without prior approval from the SBA. SBA Express allows PLP lenders to use many of their own forms, analyses and procedures to process, service and liquidate SBA loans of up to $350,000.

ቢ(1) Figures are statewide totals, including institutions not listed because they had fewer than four 5220-C approvals. 20110221-NEWS--0019-NAT-CCI-CD_-- 2/18/2011 9:45 AM Page 1

February 21, 2011 CRAIN’S DETROIT BUSINESS Page 19

CareerWorks online Visit www.crainsdetroit.com /careerworks to search for jobs, post a résumé or find talent. PEOPLE Ann Arbor, from vice president of fi- man Miller Schwartz and Cohn LLP, MARKETING from logistics coordinator, Logos Lo- nancial services, Children’s Orchard Ann Arbor, from associate; also, IN THE SPOTLIGHT Ken Burbary to vice president/group gistics, Taylor. Inc., Ann Arbor. Christopher Ballard to partner, Ann director for social strategy and analy- Michael Morris to senior vice presi- The Bank of Birmingham has Arbor, from associate; Seth Drucker to sis, Digitas, Detroit, from director of named Thomas partner, Detroit, from associate; Julie dent and treasurer, Con-way Inc., HEALTH CARE digital strategy and social media, Dorr its new Kretzschmer to partner, Bloomfield Ann Arbor, from CFO, Kulicke and Daniel Bowen to president, HHA Ser- Ernst & Young, Detroit. CFO. Hills, from associate; Salmaan Quader Soffa Industries Inc., Fort Washing- vices Inc., St. Clair Shores, from exec- to partner, Bloomfield Hills, from as- Dorr, 33, had utive vice president. ton, Pa. been vice sociate; Khalilah Spencer to partner, SERVICES president and Detroit, from associate; and Brock Nathan Wheeling to account manager, Michael Wanstreet to president, CFO of Oxford LAW Swartzle to partner, Detroit, from as- Evans Logistics Inc. division, Evans Alarm Management Corp., Farming- Bank. Fernando Alberdi to partner, Honig- sociate. Distribution Systems, Melvindale, ton Hills, from CFO. He succeeds Deb Thompson, who is now Dorr senior vice president of operations and technology. Dorr earned a bachelor’s degree in accounting at Hillsdale College. He is a member of the American Institute of Certified Public Accountants and the Michigan Association of Certified Public Accountants. FINANCE Linda Salas to vice president, commercial loans, Clarkston State Bank, Wa- terford Township, from commercial loan manager and officer, Oxford Bank, Oxford. William Stong to senior vice presi- Salas dent and director, product development and manage- ment, Flagstar Bank, Troy, from prin- cipal, Integrated Profitability Consult- ing, Pleasant Hill, Calif.; and Babette Dajos to vice president and treasury management consultant, from trea- sury management sales officer, Com- erica Bank, Detroit. Daniel Foss to vice president, busi- ness banking, United Bank & Trust,

CAREER CALENDAR Job fair at Oakland U The Oakland Macomb Job Hub 2011 is hosting a free job fair 10 a.m.-3 p.m. Thursday at Oakland University Student Center, 2200 N. Squirrel Road, Rochester Hills. About 73 employers from a variety of fields have signed up. Job seek- ers must register online at www.mijobhub.com. For more in- formation, visit www.mijobhub.com. Career conference at Spark Gray Hair Management is hosting a career conference called “Chart- ing Your Course” Tuesday, 9 a.m.-5 p.m., with an optional job fair, 7-9 p.m. The conference will be at Ann Arbor Spark, 330 E. Liberty St., Lower Level. Cost is $25 for GHM members with online preregistra- tion, $30 for nonmembers with on- line preregistration and $35 at the door. To register or for more infor- mation, go to www.grayhairman agement.com/networking and click on “events in your area.” 20110221-NEWS--0020-NAT-CCI-CD_-- 2/18/2011 10:34 AM Page 1

Page 20 CRAIN’S DETROIT BUSINESS February 21, 2011 UPCOMING CALENDAR With Don Tanner, founding partner, Marketing Association-Detroit, Exact- PARTNER EVENTS SALUTE THE AREA’S TOP Tanner Friedman Strategic Commu- Target, others. With Tim Rogers, presi- nications, and others March 2; Hajj dent, R.L. Polk & Co.; Larry Freed, presi- DEALMAKERS MARCH 10 IN TROY Flemings, founder, principal, Brand dent, Foresee Results; others. Somerset Crain’s Camp University, and others March 9; Inn, Troy. $195 Direct Marketing Asso- partners with a variety of organizations on Crain’s Detroit Business, the Ned Staebler, vice president, entre- ciation-Detroit members, $235 AdCraft, events and special subscription offers for their Association for Corporate Growth- preneurial and capital services, 313Digital, American Marketing Asso- Detroit Chapter and Honigman Michigan Economic Development ciation and Detroit Regional Chamber members. Please visit their Web sites below. Miller Schwartz and Cohn LLP are Corp., and others March 17. Detroit members, $295 nonmembers, $25 more hosting the Regional Chamber, Detroit. $20 per in- after Feb. 24. Contact: (248) 495-6565; e- fourth annual dividual session chamber members mail: [email protected]; Marketing & Sales Executives of Detroit (MSED) Business Builder or higher, $30 basic Monthly Meeting “Five Observations & A Path Forward Mergers and website: www.dmad.org. Acquisitions and associate members, $40 nonmem- for Detroit” Speaker: Sandy K. Baruah, President & Awards 5-9 p.m. bers. Season passes for all three ses- Club Cocktails. 4:30-6:30 p.m. March 3. CEO, Detroit Regional Chamber, discusses his plans March 10 at the sions: $50 chamber members Business for sparking an economic development turnaround for Somerset Inn in Builder or higher; $70 basic and asso- Valentine Vodka, Detroit. Club Cock- tails (formerly Industry Cocktails). The Southeast Michigan. Troy. ciate members; $90 nonmembers. Con- tact: (313) 596-0403; e-mail: Loving Touch, Ferndale. Free and ex- February 23, • 5p.m. – 8 p.m. Awards will honor companies and The Management Education Center, Troy [email protected]; web- clusive to chamber members Business executives in the following four site: www.detroitchamber.com/small Builder level and above. Contact: (313) MSED, Detroit Regional Chamber, Automation categories: Best Deal of the Year, businessclub. 596-0403; e-mail: kcockrel@ Alley, OESA and Inforum Members: $45 Dealmaker of the Year, detroitchamber.com; website: www. Non-Members: $60 Expansions and Lifetime Alternative Energy in Action. 7:30 a.m.- detroitchamber.com/smallbusiness Details & Registration: www.msedetroit.org Achievement. Winners and 2 p.m. March 2. Engineering Society of club. or (248) 643-6590 finalists will be profiled in Crain’s Detroit. With Steven Kurmas, presi- Feb. 28 issue. dent and COO, Detroit Edison; others. Powering Up: How America’s Women Walsh Workshop: Killer Presentations. Designed for Tickets are $60, $50 in groups of 10 Hyatt Regency Dearborn. $99 ESD Achievers Become Leaders. 11:30 a.m.- supervisors, managers, team leaders, C-level executives or more or for ACG members, $30 members, $125 nonmembers; join ESD 1:30 p.m. March 3. Inforum. With Anne and salespeople. Partner Event with Rotary Club of Troy for students and $75 at the door. for $184 and attend for free. Contact: Doyle, author, Powering Up: How Amer- March 3 • 9 a.m. - Noon• Troy Campus For more information, call (313) (248) 353-0735, ext. 149; e-mail: ica’s Women Achievers Become Leaders. Tickets: $45 446-0300, e-mail [email protected]; website: www.esd.org. Hyatt Regency Dearborn. $55 Inforum Register at www.TheWalshInstitute.com [email protected] or visit members, $65 nonmembers, $600 table Contact Jan Hubbard 248-823-1392 www.crainsdetroit.com. Advance Integrated Marketing Sympo- of eight. Contact: (877) 633-3500; website: [email protected] sium. 7:30 a.m.-4 p.m. March 3. Direct www.inforummichigan.org. Walsh Workshop: Next Generation Human WEDNESDAY Resources. Recovery Era HR will be all about FEB. 23 Innovation and Investment. March 10 • 8 a.m.– 2 p.m. Five Observations and a Path Forward. Lunch included • Walsh College Troy Campus 5-8 p.m. Marketing and Sales Execu- CAREER MOVES Tickets:$15 students; $45 Walsh alumni/partners; $90 all others. tives of Detroit. With Sandy Baru- Register at. www.TheWalshInstitute.com FINANCE ah, president and Call Us For Personalized CEO, Detroit Re- EQUITY ANALYST/PORTFOLIO MANAGER Service: (313) 446-6068 Teaming Agreements 101 gional Chamber. Attorney Joseph D. Gustavus of Miller Canfi eld in MSU Management Established Michigan based boutique investment CLOSING TIMES: Monday 3 p.m., counseling firm is seeking a highly energetic and one week prior to publication date. Troy will present an overview of Teaming Agreements Education Center, self-motivated equity analyst/portfolio manager to between Prime Contractors and Subcontractors in the Troy. $45 MSED join our entrepreneurial firm. The analyst will Please call us for holiday closing times. members, $60 non- conduct general and specific fundamental equity FAX: (313) 446-1757 defense industry. and fixed income research on the firm’s existing The course will encourage questions from attendees on members. Contact: holdings, together with the identification of new E-MAIL: [email protected] specifi c scenarios. Baruah (248) 643-6590; opportunities for our clients and other pertinent INTERNET: e-mail: meetings@meetingcoordina duties related to the management of our client March 10 • 8 a.m. – 10:30 am www.crainsdetroit.com/section/classifieds tors.com; website: www.mse portfolios. Confidential Reply Boxes Available Schoolcraft College • $45 per person detroit.org. The ideal candidate should have a minimum of one Registration is mandatory: (734) 462-4438 to two years of fundamental investment research PAYMENT: All classified ads must be experience and possess good conceptual and prepaid. Checks, money order or China and Taiwan: Asia’s Engines of problem solving abilities. A MBA, or progress Network & Nibble breakfast Crain’s credit approval accepted. Economic Growth. 7:30-11:30 a.m. Au- towards a CFA, is desirable. This career Credit cards accepted. Presented by the Troy Chamber Women’s Business opportunity offers a good compensation package tomation Alley. With Robert Ruffini, along with a unique opportunity for professional Forum in partnership with the Birmingham Bloomfield Fluxtrol Inc., and Michael Grattan, and financial growth. See and Royal Oak Chambers of Commerce Dell Marking Systems. Automation Interested candidates should submit a cover Crainsdetroit.com/Section/Classifieds March 8 • 8 a.m. – 9:30 a.m. Alley, Troy. $20 members, $40 letter and resume to [email protected]. for more classified advertisements Herald Wholesale Showroom • 1765 W. Maple Rd. nonmembers, $10 more at the door. $12 per person, $17 per person day of the event. Contact: (800) 427-5100; e-mail: RSVP to 248-641-8151, [email protected] or [email protected]; website: www.troychamber.com www.automationalley.com. Troy Restaurant Week March 20 – March 25 MARKET PLACE 15 fine dining restaurants Lunch: $15 per person THURSDAY FEB. 24 ANNOUNCEMENTS & BUSINESS OPPORTUNITIES Dinner: $25 or $35 per person SERVICES Most are three-course meals! Gold Award Banquet. 5:30-9:30 p.m. En- TAXI BUSINESS FOR SALE IN DETROIT Advance reservations are recommended. gineering Society of Detroit. Shriners FINANCIAL SERVICES Well established taxi company with 15 Details at www.troyrestaurantweek.com Silver Gardens Events Center, South- cabs licensed in Detroit and other cities for ADAMS FINANCIAL SERVICES sale. Good building and garage. field. $60, $450 table of 10, $20 Order of Daily positive cash flow. Michigan Society of Association Executives the Engineer Ceremony; join ESD for Working capital No credit scoring -- No minimum time in business $119 and attend for free. Contact: (248) If interested, please email your contact in partnership with Association Management Resources Business lines of credit information to [email protected]. offer Volunteer Leadership Workshops 353-0735; website: www.esd.org. All types of business loans will be considered I will contact you to discuss. Training to Enhance your Board of Directors and Your Please Call 248-643-7418 Association. Building Future Boards. FRANCHISE OPPORTUNITIES A.M. session: Board Succession Planning, strategies to COMING EVENTS BUSINESS & maintain quality board membership. After lunch: Detroit Business Festival. 3-7 p.m. Feb. INVESTMENTS Passport Pizza is one of Planning an Effective Board Orientation–what new 26; noon-5 p.m. Feb. 27. Russell Indus- Michigan’s fastest growing pizza board members need to function effectively within the trial Center; others. Learn about ini- BUSINESSES FOR SALE chains. With over 20 stores in tiatives and opportunities available to metro Detroit, we are looking for board culture. new businesses. Russell Industrial aggressive individuals to 9 a.m. - 4 p.m. March 31• East Lansing OR FOR SALE become a Passport Pizza Franchisee. Many prime Center, Detroit. Free. Contact: (313) areas still available. August 30 • Ann Arbor LANDMARK AUBURN HILLS 972-7009; e-mail: mwest@russell RESTAURANT Call Michael Garzoni (248) 766-9804 Visit www.msae.org for more information bazaar.com; website: www.russell Real estate and business available, www.passportpizza.com and to register. bazaar.com/dbf. including FF&E and liquor licence. Contact Bryan Weiss (248) 750-1700 or EQUIPMENT & Greater Detroit Area Health Council Annual Health Detroit Economic Club. 11:30 a.m.-1:30 [email protected] MERCHANDISE Futures Conference – Focus on Obesity: Information, p.m. Feb. 28. With Diane Swonk, chief Ludwig & Seeley Action, Results. Join this unprecedented, interactive, economist and senior managing direc- TELECOMMUNICATIONS experiential symposium to combat obesity, share best tor, Mesirow Financial; and Mark Zan- BUSINESS OPPORTUNITIES practices and facilitate change to improve the health of di, chief economist, Moody’s Analyt- AVAYA . . . NORTEL . . . IP OFFICE . . . BCM ics. Cobo Center, Detroit. $45 DEC PARTNER . . . NORSTAR Southeast Michigan. TRUCKING COMPANY/SE USA: For Sale members, $55 guests, $75 nonmem- Wire and Install Services . . . Systems/Parts May 11 • 8:30 a.m. – 3:30 p.m. [email protected] (800) 342-5666 bers. Contact: (313) 963-8547; e-mail: Owner retiring. Coast to Coast & Canada Conference & Event Center (Ford Motor Company), [email protected]; website: Well established-Great customer base! 1151 Village Road, Dearborn GOLF COURSE Opportunities Nationwide! Call or email today for information www.econclub.org. on a custom advertising plan! Members $125, Non-members $150. FINANCING Available - all business types! Contact: 313-965-4123; email: [email protected]; [email protected] Elevate Your Business. 9-11 a.m. CONTACT: ROBERT KELLEY www.gdahc.org. 561-704-8479 KELLEY CONSULTING, INC. 313.446.6068 March 2, also March 9 and March 17. 20110221-NEWS--0021-NAT-CCI-CD_-- 2/18/2011 6:05 PM Page 1

February 21, 2011 CRAIN’S DETROIT BUSINESS Page 21 Borders: Retail stores and reading platforms need to evolve ■ From Page 3 head costs for that market. “And if they do all the things to re-examine the experience it of- “You don’t read left-to-right or “If they’re in an area with five right in bankruptcy, make the com- fers customers. up-and-down,” she said. “You can stores and they close down four, it They’re closing pany smaller, more profitable, then, “The message in retail right read it all over the page.” isn’t going to be cost-effective to “ maybe, they can focus on their e- now is that it’s not so much what Books are adapting, and there have that one store left,” he said. stores, eliminating commerce strategy and become you sell but how you sell it,” she will always be a need to sell them, Cutting stores is always emotion- more competitive there,” he said. said. “The product is important, she said. al for retailers, which typically employees. But will Borders is in some ways like but when everyone is selling the But retailers in the industry are measure themselves by the number Blockbuster Inc., which filed for same product, the retailer needs to taking notice of the Borders situa- of stores they have, he said. As a re- that change the bankruptcy in September, said be doing something different. tion, particularly Barnes & Noble, sult, they often don’t cut enough. Pam Danziger, president of “Borders has lost their way, and said J.H. Cohn’s Shandler. “When you go from growth to dynamics of the Stevens, Pa.-based research and- it will need to look at the ‘how’ just “Barnes & Noble isn’t cruising ei- cutting, it’s a matter of saying, industry? consulting firm Unity Marketing Inc. as much as the ‘what’ when it ther,” he said. “At the end of the day, ‘Am I stronger and more prof- Blockbuster was hit with compe- comes to retailing.” they’re going to need to assess their itable?’ or ‘Did I not shrink enough ” tition from Netflix for digital and Re-creating bookstores as hang- own business to avoid this as well.” Jim McTevia, McTevia & Associates and not enhance the cash flow mail-based movie consumption, outs needs to be a major part of the Based on the dynamics of the enough?’ ” then also hit by retail competition strategy, she said. bookselling industry, Shandler But being small isn’t enough to will that change the dynamics of from Oakbrook Terrace, Ill.-based Susan Yashinsky, macro retail said, everyone wants to see Bor- be competitive, said Jim McTevia, the industry? I don’t think so.” Redbox Retail LLC, which rents trend forecaster with Sphere ders succeed long term. managing partner of Bingham McTevia said Borders needs to DVDs out of kiosks in grocery Trending, said the digital revolu- “It’s good for consumers, ven- Farms-based consulting firm focus on locations where it can be stores and other locations. tion won’t leave print behind, but dors, publishers and landlords, to McTevia & Associates. competitive and give up stores to “Borders was hit the same way by books will continue to evolve. have another retailer in the market, “They’re closing stores, elimi- Barnes & Noble where the two com- Amazon.com online and Barnes & Books by “Daily Show” host Jon he said. “The more competition, the nating employees,” he said. “But panies compete head to head. Noble, competition coming at them Stewart, she said, are an example better it is for the entire industry.” from both ways,” Danziger said. of the books that cater to new gen- Daniel Duggan: (313) 446-0414, The solution will be for Borders erations of readers. [email protected] REAL ESTATE DSO: Community work key to cash AUCTIONS INDUSTRIAL PROPERTY ■ From Page 3 Home Auctions AVAILABLE NOW as a management consultant with allow musicians to get much closer to get training for its timpanist MICHIGAN the Detroit Symphony Orchestra. to their audience, he said. who expressed interest in drum BANK-OWNED HOMES 4,000 to 100,000 sq. ft. The DSO musicians were ex- “There’s no doubt that this circles or music therapy using per- pected to vote over the weekend could increase community inter- cussion instruments. He is now 78 area HOMES will be offered on SATURDAY, Also 10,000 & 25,000 sq. ft. FEBRUARY 26 at 1:00 PM at on a new contract that would in- est in the orchestra and even bring providing these skills for at-risk THE DEARBORN INN, A MARRIOTT HOTEL Free Standing Bldgs w/truckwells. clude a substantial pay cut, fewer people down to Orchestra Hall.” youths, Fleur said, doing some- TWO additional MICHIGAN HOME AUCTIONS are: guaranteed weeks of pay on an an- There’s undeniably an audience thing he’s interested in while cre- FEBRUARY 24: GRAND RAPIDS area • FEBRUARY 25: KALAMAZOO area 1 Mile from Metro Airport nual basis and a provision en- development benefit to expanded ating revenue for himself and for Don’t wait for the market to “recover” and the prices on REA CONSTRUCTION abling musicians to opt in for community and education work, the orchestra at the same time. these homes to go up. community and education work said Elizabeth Weigandt, DSO di- The most tangible evidence of the Get your next home at (734) 946-8730 for extra pay. rector of public relations. success of what Fleur calls a new the price you set with Even conceptually, the expanded “When you go out to places of business model for the Memphis NO STARTING BIDS. • No Back Taxes • No Liens Also Heavy Industrial work has already attracted $2 mil- worship, community centers and in Symphony is “substantial funding” • Insurable Title Land Available lion in funding from a group of local schools, and they have the opportu- from sources that previously had Get The Details and foundations, corporations and indi- nity to … experience your music not contributed and increased sup- www.reaconstruction.net viduals. live, there’s a possibility they’ll be- port from local foundations such as The requirement that the $2 mil- come a patron at some point.” the Andrew W. Millon Foundation, www.BidNowMichigan.com lion be used solely to pay for extra The DSO expects to charge ad- which awarded the symphony OR CALL 866-518-9064 Pontiac Warehouse for Lease community and education work mission to only about 10 percent of $550,000 over the next three years to OPEN HOUSE: Sat & Sun Best Deal in Town! done by DSO musicians had been a its community engagement perfor- help train and equip its musicians. Feb 19 & 20 from 1-3 pm sticking point in contract negotia- mances, Hogle said. He projects that New revenue totals hundreds of Up to 2.5% to Buyer’s Agents! tions, as musicians wanted more ticket revenue along with any rev- thousands of dollars each year in money put into the base pay cate- enue the symphony would see from support of the community and edu- gory to attract the best musicians. fee-for-services would be “less than cation work, Fleur said. “The (school arts programs and six figures” on an annual basis. The Memphis Symphony, which • Warehousing, Machine/Die Storage, $2,500 down in cash or certified popular culture) that trained and But if the record of other orches- is operating on a $4.5 million budget funds for each property. 5% premium on Manufacturing each sale.All sales subject to seller’s approval. • M/59, Widetrack, and Woodward Area exposed a community to things tras that have gone down the same for fiscal 2011 up from $3.5 million In conj. w/ Steven L. Reeser RE6504140790 • 5,000 to 200,000 Sq. Ft Available like classical music and the clas- community service path is any in- last year, will see an extra $55,000 in with Offices, Short or Long Term sics in general are going away,” dication, the DSO could attract earned revenue and an extra Leases said DSO Executive Vice President much more revenue with broader $350,000 in contributed revenue be- • 8 Interior Truck Wells, 16 Ft. Ceiling Heights, Sprinklers, Heated, Buss Duct, Paul Hogle. community and education work. cause of the community and educa- and Air Lines. 248-496-3405 What’s left is large orchestral in- The Memphis Symphony Orchestra tion work it is now doing, he said.     stitutions in cities that are at a began offering its musicians the “If you have the right people ... / OFFICE SPACE crossroads, he said. “Do we try to ability to opt in to extra outreach delivering the right service, be- replace and augment that, or do we work for extra pay in 2008-09. yond just rehearsals and perfor-     '     Flint Township Office Building just turn off the lights and go It’s very clear in the Memphis mance, the revenue will follow,” &)'%0X€sƒv–WuSv”A†‘† away? This is a journey.” Symphony’s bargaining agree- Fleur said. The DSO musicians are not op- ment that the extra work isn’t be- The idea of musicians doing  posed to community service, said ing forced by management, said community outreach and educa-    Karl Pituch, principal horn and a Ryan Fleur, president and CEO, tion under the umbrella of their   member of the negotiating com- pointing to a committee of musi- orchestra is seeing increased dis- • Class A Office Building • I-69 / I-75 / US23 near Bishop Airport mittee for the musicians. cians, staff and board members cussion among orchestras, said          • Up to 20,000 Sq. Ft. Available - 300 car parking “Some of us like to teach. We do that approves the types of commu- Thomas Morris, former director of    !" # • Fully Furnished with 100 pre-wired workstations some coaching and play with kids nity and education work musi- the Boston Symphony Orchestra and • 800 kw backup generator • General Offices, Call Center, Data Center or … (but) we play orchestra music cians are asked to do. the Cleveland Orchestra and now an Medical Offices and we feel that’s our basic job.” “We want to build excitement so independent music consultant. HSQ€t! 248-496-3405 In the final proposal that went to people will want to come to what “This is what organizations @`$2'###$% musicians for a vote last weekend, have been our traditional perfor- have to do to deal with the chang-   Call Us For Personalized management had designated that mances, but as we go forward, a ing world.”   part of the new community out- number of our performances will “Orchestras ... all the parts of it Service: (313) 446-6068 reach would be with the full orches- be (outside) the conference hall. … need to understand that the COMMERCIAL PROPERTIES FAX: (313) 446-1757 tra or a split/half orchestra perfor- We have to meet the community world is radically changing in all E-MAIL: [email protected] mance, Pituch said late last week. where they are,” Fleur said. ways in terms of the number of Chesterfield Township “That’s something we pushed The musicians’ primary train- things to do with their time … the For Lease INTERNET: www.crainsdetroit.com/section/classifieds for because we feel that’s what we ing has been to play great music on old idea of being very monolithic, Join Kroger, Aco, Family Dollar. do best.” their instruments, but there are of producing one type of product — 1,500 sf and 1,150 sf end caps See With the 15 or so community many ways musicians get artistic subscription concerts — is in- on 23 Mile Road Crainsdetroit.com/Section/Classifieds concerts the musicians have per- satisfaction while helping to meet creasingly invalid,” he said. Richard Canvasser 248.563.2921 for more classified advertisements formed while on strike, it’s become community needs, he said. Sherri Welch: (313) 446-1694, clear that those types of concerts For example, the symphony paid [email protected] 20110221-NEWS--0022-NAT-CCI-CD_-- 2/18/2011 6:05 PM Page 1

Page 22 CRAIN’S DETROIT BUSINESS February 21, 2011 Chamber: Voice for black business ■ From Page 1 economy. lenges in the past five years, it’s “African-American businesses important to provide value, said want a part in the statewide econo- African- Grace Shore, CEO and COO of the my,” Harris said. “ roughly 900-member Macomb Coun- The creation of the chamber was American ty Chamber of Commerce. the result of the efforts of a num- “When you do meaningful ber of black business groups, he businesses want a things that your members want said. The new chamber will have a you to do, it’s much easier to at- broader scope than other leader- part in the statewide tract and retain them,” she said. ship groups serving the state’s mi- economy. “The challenge for any new orga- Personal wealth specialists to help in the many steps nority-owned business communi- nization is to be responsive to ty, such as the Michigan Minority ” their members. … You have to cre- in your financial journey. Ken Harris, Michigan Supplier Development Council. Black Chamber of Commerce ate an atmosphere in your cham- Find us at PMFA.com. The chamber will take an ag- ber where members want to talk to gressive role in advocating for Ron Busby Sr., U.S. Black Cham- you and want to be a part of your black business owners, both politi- ber of Commerce president and organization.” cally and with hands-on assistance CEO, is scheduled to speak. The chamber is planning a State UPCOMING BREAKFAST ROUNDTABLE: in areas like marketing and public Harris said he hopes for 250 of Black Business Convention for relations, he said. It also plans to members in the chamber’s first June 23 at the Fort Shelby Hotel Dou- offer health care benefits to its year but wouldn’t give a number bletree Guests Suites. March 15 members and will create a politi- for the group’s fundraising goals. In the next two years, the MBCC Reaching Financial Independence and Charitable Planning cal action committee. He said dues have not yet been fi- will launch local chambers in The new chamber is an affiliate nalized. Membership is not limited cities including Detroit, Lansing, of the U.S. Black Chamber of Com- to black-owned businesses. Flint, Grand Rapids, Southfield, All roundtables will be held from 7:30-8:30 a.m. at merce, which Harris said will give Before the creation of the Dear- Oak Park, Pontiac, Ann Arbor, 27400 Northwestern Hwy., Southfield, MI 48034. the Michigan chamber a voice in born-based, 1,300-member Ameri- Birmingham and Royal Oak. national politics. can Arab Chamber of Commerce, no MBCC officers: Chairman Visit roundtables.pmfa.com to register. Seating is limited. In its first week, the chamber at- one spoke for the Arab-American William Brooks, Chairman-elect tracted 100 charter members, Harris business community, said Ahmad Charlie Beckham, President/CEO said. The group is launching with Chebbani, chairman and co- Harris, Vice President Pamela about $250,000 in donations from founder of the chamber, and presi- Rodgers, Treasurer Wayne members and other supporters and dent and CEO of Dearborn-based Phillips, Secretary Reuben Mun- has been granted 501(c)(6) status by Omnex Accounting & Tax. day, State Adviser Louis Green the IRS, Harris said. This is the non- “The whole effort is challenging and National Adviser Rod Rick- and also rewarding. … I expect it INVESTMENT MANAGEMENT I *TRUST SERVICES profit designation for chambers of man. commerce and other business and would be same for the African- Board members: Douglass Dig- *INSURANCE SERVICES I *TAX PLANNING membership organizations. American chamber of commerce,” gs, Natalie King, Mark Douglas, ESTATE PLANNING I WEALTH MANAGEMENT The chamber plans to introduce he said. “I think it’s going to be an Dennis Archer Jr., Dr. Geneva BUSINESS TRANSITION I PHILANTHROPIC PLANNING its board and kick off a yearlong invaluable organization to the Williams, Cheryl Richardson, Hi- QHHGTGFVJTQWIJCHſNKCVGUQH2/(# membership and fundraising dri- African-American business com- ram Jackson, Robert Chavis, An- ve Tuesday during a 10 a.m. press munity at large.” drew G. McLemore Jr., T. A. El conference at the Charles H. Wright For membership organizations, Amin, Rumia Burbank, Eric Museum of African American History. which have generally faced chal- Hardy and David Burnley. Alternative Energy Conference Engineering Society of Detroit Buying: Bank set for regional binge Alternative Energy in Action: WIND, BIOMASS, SOLAR ■ From Page 3 Wednesday, March 2, 2011 9 a.m. to 5 p.m. Madison, Wis., and change the tional acquisitions. The kind of for New York-based Oppenheimer & bank’s name, dropping the “Michi- FDIC-assisted sales he has been do- Co. Inc., said an IPO on Jan. 28 by Hyatt Regency, Dearborn gan” to something more suitable to ing now requires cash, but as FDIC another bank in the Ross portfolio, doing business throughout the sales wind down, acquisitions BankUnited Inc. of Miami Lakes, Midwest. with healthier sellers will be done Fla., bodes well for First Michigan. What actions, opportunities and Last April, Ross invested nearly with shares of stock. Shares were expected to go for innovations are under way to promote $50 million in the bank’s first $200 “I’m surprised they’re going to $23-$25 but ended up selling for $29, million round of capital raising, wait a year for their IPO. I thought and the IPO raised about $1 billion. and produce alternative energy? And which funded acquisitions of about it would come sooner. But they’ll About 90 percent of that went to re- how will they impact Michigan's $2 billion in assets from three get a better valuation if they wait a pay investors such as Ross, with economy and industries? banks shut down by regulators: CF year,” said Patrick Fehring, presi- the bank itself keeping about $100 Bancorp Inc. of Port Huron, Wiscon- dent and CEO of Level One Bank, million. Provost said his IPO will This popular conference will feature sin-based First Banking Center and which, like First Michigan, began be much smaller because none of Madison Heights-based Peoples operations in 2007. the proceeds will go to investors, four panels led by Michigan’s State Bank when it was shut down Like First Michigan, and unlike who pledged not to sell for three alternative energy leaders on Feb. 11 on its 102nd birthday. other local banks, Level One does- years after the Citizens First trans- as they discuss policy, current Provost said his bank has about n’t have many troubled loans in its action last April. $50 million left for acquisitions, portfolio and has been raising “The investment community legislation and alternative outlook and the additional $200 million money, albeit much less, for acqui- watched the BankUnited IPO very with focus on three alternative energy will give him enough capital to sitions. It did a private fundraising closely,” McEvoy said. “The success sectors: WIND, BIOMASS, and SOLAR. buy about $2.5 billion in assets of $13.5 million in 2009, when it of that transaction has been very en- over the next year, at a rough rule bought $180 million in assets from couraging. It shows the demand for of thumb of being able to leverage Farmington Hills-based Michigan bank stock has grown. Assuming Featuring Guest Speakers: capital at about a 10-to-1 ratio. Heritage Bank when it was shut by the improving economy translates Steven E. Kurmas, PE, President & COO, Detroit Edison Provost said he has had prelimi- regulators. into a demand for loans, you’ll see nary talks with bankers in Chicago. Fehring said he will continue to more privately held banks look to go Mary Lou Benecke, VP, Public Affairs Dow Corning “We hired five senior people from compete with First Michigan for public to fund growth.” Steven Milunovich, Research Analyst, Merrill Lynch the Chicago market to help us in acquisitions of local troubled McEvoy is flying to Detroit Wisconsin, and it would be a natur- banks, or of assets of banks closed Thursday to meet with First Cost: (includes continental breakfast & lunch) al progression to have them help us by regulators, but wished Provost Michigan executives. “I want to with opportunities in Chicago,” well on his regional expansion and kick the tires,” he said. ESD Members: $99 said Provost, who bought First with his IPO. A likely key to a successful IPO Non Members: $125 Banking Center in November. Fehring said his bank doesn’t by First Michigan will be having Join ESD and Attend for Free: $184 He said he hopes to pick a new have short-term plans to go public, established a beachhead in the name during the second quarter. “but I’m sure at some point the Chicago market. For more information or to register, “I would look for a nontradition- board will consider it. Our share- “The Chicago market is definite- visit www.esd.org al name to be chosen,” he said. holders will be excited at some ly in our business plan. If the op- When his current capital of point to be able to trade their portunity comes up, we hope to be Exhibit and sponsorship opportunities available. $250 million runs out in about a shares.” there,” said Provost. year, Provost wants to do an IPO of Terry McEvoy, a senior equity Tom Henderson: (313) 446-0337, at least $100 million to fund addi- analyst who covers regional banks [email protected] 20110221-NEWS--0023-NAT-CCI-CD_-- 2/18/2011 6:10 PM Page 1

February 21, 2011 CRAIN’S DETROIT BUSINESS Page 23 Takeovers: Could rise Henry Ford Health System to offer ■ From Page 1 view panel in place to evaluate to the appoint- the local government’s fiscal ment of an health, and if there’s a financial emergency manager could wellness programs to business emergency, an emergency man- ager is appointed. be a good Amendments to state law un- thing, said G. BY JAY GREENE like Wellco and Ann Arbor-based and do not have the resources to der discussion include expand- Allen Bass, of CRAIN’S DETROIT BUSINESS HealthMedia Inc., which offers on- compete with existing providers. ing the list of events that can trig- counsel at De- line health risk assessments. “It will not be the revenue or ger the state review that leads to troit-based Henry Ford Health System in De- Companies also offer their em- cash cow compared with some of installation of an emergency Lewis & Munday troit will begin providing wellness ployees wellness-oriented health their other (clinical) programs.” manager, changing the powers of Dillon PC. programs to companies that seek insurance products through Health Henry Ford and other wellness local elected officials during the “But on the other hand, we’re to lower their health care costs Alliance Plan of Michigan, Priority providers are counting on an ex- emergency financial manager’s suspending the political process and improve worker productivity. Health and Blue Cross. plosion in worksite wellness pro- tenure, giving an emergency in the municipality in favor of an Capitalizing on two successful As part of its business model, grams this year. manager the power to modify or autocrat, so there are justifiable pilot projects with Chrysler Group Rodriguez said Henry Ford plans In a recent survey, Mercer found terminate labor contracts, allow- concerns about when an auto- LLC in Auburn Hills and Dow Chem- to sell wellness services directly to that 44 percent of companies this ing an emergency manager to crat, the popular word is a czar, ical Co. in Midland, the six-hospital companies that want stand-alone year plan to add or expand well- consolidate or eliminate depart- is put into place,” he said. “The system’s Center for Integrative Well- programs, companies that want to ness programs. ments and allowing a current or theory is that the fiscal manage- ness in Southfield received supplement their insurance offer- And under the Affordable Care recent elected official to serve as ment hasn’t been good for politi- $400,000 from Blue Cross Blue Shield ings and to health insurers that of- Act of 2010, small businesses with emergency manager. cal reasons, and therefore, if they of Michigan last month for a pilot fer wellness insurance products. 100 or fewer employees will be able Under the existing law, an suspend the (elected officials), project to provide group wellness “Henry Ford (is) very successful to apply for grants for workplace emergency manager can renego- they suspend the political services to 600 members who have in pain management, which is a wellness programs. The grants are tiate union contracts but not process and the right fiscal deci- pain and stress-related ailments, subset of wellness,” Foster said. expected to be worth $200 per em- break them. The amendment sions will be made.” said Alba Rodriguez, the center’s “They have a scalable model and ployee up to about $20,000. would place some restrictions on Bettie Buss, senior research an- associate director. are ready to go out to the field big “The interest level for business- the emergency manager’s ability alyst at the nonpartisan Citizens Under a typical worksite well- time. Getting people pain free, off es is sky high once we are able to to break contracts, namely, to Research Council, also cautioned ness program, employees take a their meds and back to work is a present what we do for them,” prove it’s necessary, based on the against intervention too early. health risk assessment that helps huge ... problem for businesses.” Nunez said. financial emergency and the “How far do you go with your identify potential health problems. But Foster said most hospital- Jay Greene: (313) 446-0325, good of the public. Contract mod- locally elected officials? I think They are then encouraged to adopt based wellness programs are small [email protected] ifications would be temporary. you go as far as you possibly can healthier lifestyles or seek medical Legal and policy experts ques- with them,” she said. “I think care if their condition warrants it. tion whether such a change there’s real danger with the state “There are wellness programs would be kosher under the trying to step in too soon.” out there, but very few have specif- Michigan Constitution, which There’s another problem, Buss ic interventional approaches to get says the state can’t pass a law said. The only power that would people healthy,” Rodriguez said. that invalidates a contract. allow a more effective resolution “It is like you visit a mechanic But Dillon says there’s a com- of financial problems is the power and are told you need brakes,” Ro- peting provision in the constitu- to abrogate contracts — and plac- driguez said. “Instead of fixing tion that requires the state to ing that power in the hands of a them you go home and don’t do provide for the health and wel- mayor or emergency financial anything about it. This is what is fare of its residents. Which provi- manager is unconstitutional, she missing in most programs.” sion takes precedence could be a said. “So how does that work?” The Henry Ford wellness center matter for the courts to decide — And the bill can’t address what uses a clinical approach that com- something Dillon said won’t Bass calls “Act 72 recidivism.” bines complementary and alterna- make much practical difference. “The same municipalities keep tive medicine, including somatic “We would expect there may be coming up again and again and movement and guided relaxation, lawsuits, but practically, is the again. It’s like a revolving door,” with traditional medical care, Ro- court going to issue an injunction he said. “There’s more to the po- driguez said. … or take action three years down litical process than local offi- Scott Foster, president of Wellco the road?” Dillon said. “Legal re- cials. There are constituencies, Corp., a Royal Oak-based wellness course will probably be sought, there are the creditors, the bond- consulting firm, agreed that some but will it be timely enough?” holders, there are labor unions.” wellness providers “provide wa- The expansion of the number In an attempt to sustain an tered-down programs, but they of trigger events isn’t designed to emergency manager’s changes, won’t last because clients want re- push more local governments the PA 72 amendments bar local sults.” into state takeovers, Dillon said. governments from deviating Foster said most wellness com- The intent is just the opposite: to from an emergency manager’s panies that have been around for create an early-warning system plan for two years. An earlier more than five years have compre- that allows timely state interven- provision that would have pre- hensive programs to help compa- tion, with the goal of staving off vented elected officials from run- nies identify employees with med- the appointment of an emer- ning for office for 10 years follow- ical issues and provide services to gency manager. ing a financial emergency has improve their conditions. “Now it’s not very well-defined been dropped. While 77 percent of hospitals of- when someone can be caught up Buss said that PA 72 is the final fer wellness services to their em- into the act,” he said. “This step in a series of causes of a local ployees and family members, only brings more clarity.” government’s financial distress, 18 percent of hospitals sell their And one new, key condition: and that to effect a true improve- services to companies as a busi- The existing law doesn’t say that ment in local government fi- ness line, according to the Ameri- the local unit of government has nances, it’s necessary to consider can Hospital Association. to be unable to provide essential factors like Public Act 312, which In Southeast Michigan, few hos- services, he said, but the revised mandates binding arbitration for pitals offer commercial wellness law would. police and fire unions, or Proposal programs. One is Warren-based St. If a local review is triggered, in A and the Headlee Amendment, John Providence Health System. some cases the review team could which limit property tax captures, Through its Occupational enter into a consent decree with or state laws that inhibit intergov- Health Partners program, St. John the local government to correct its ernmental cooperation. Providence has been contracting financial problems, said Howard “Then you get to where you with companies since 2006, said Ryan, director of legislative af- can reasonably talk about what Darlene Ephraim, corporate direc- fairs for the treasury. If problems happens in a fiscal emergency, tor of occupational health. are fixed, an emergency manager after you talk about removing Another that has expanded its would be unnecessary. some of the causes for fiscal in-house wellness program is Crit- Some have asked whether the emergencies that can be ad- tenton Hospital Medical Center in revision is aimed at Detroit, but dressed legislatively,” she said. Rochester Hills. Through its Cen- that’s not the case, Dillon said. “We’re focusing on the back end. ter for Preventive Medicine, Crit- “As it relates to the city of De- … It’s not fair to talk about the tenton offers an executive medi- troit, that is not my urgency,” he back end when we’re not talking cine program to local businesses. said, adding that other communi- about pipeline that got local Most businesses in metropolitan ties are closer to a financial units to that point.” Detroit that offer wellness pro- emergency. Nancy Kaffer: (313) 446-0412, grams to their employees work An expedited process leading [email protected] primarily with wellness vendors 20110221-NEWS--0024,0025-NAT-CCI-CD_-- 2/18/2011 6:08 PM Page 1

Page 24 CRAIN’S DETROIT BUSINESS February 21, 2011 Cities fear revenue sharing cuts, warily eye sharing services

BY NANCY KAFFER tional revenue sharing. cil of Governments and Clinton Town- ing makes up a quarter of their those costs,” he said. AND CHAD HALCOM For fiscal 2011, the city expects ship supervisor. “It might end up budget and almost half of that Brown said he hopes the impact CRAIN’S DETROIT BUSINESS to receive $60 million in constitu- having a lot to do with public safety, could be eliminated, and these of the bill will be softened during tional revenue sharing dollars and since that’s an area we’ve identified cities have been cutting for 10 the legislative process. Gov. Rick Snyder’s first budget $178 million in statutory, com- that can get the most financial bang years, how is the answer ‘no’?” The state must be willing to elim- proposal takes aim at the city of pared to $7.9 million constitutional out of collaborating. And sharing services may be inate many of its mandates on local Detroit, city officials say, eliminat- and $1 million statutory for Ster- “We’re going to look at all of the easier said than done. government, now that it has elimi- ing two tax credits that drive ling Heights, for example, or $3.8 governor’s ideas seriously, but we “In the old pot of $300 million, we nated some funding, said Conan downtown redevelopment and cut- million constitutional and $833,008 don’t know yet what is on his got 60 percent, and it represented Smith, executive director of the ting the city’s state funding by 74 statutory for Royal Oak. mind.” about 18 percent of our operating Michigan Suburbs Alliance and a percent. While Detroit is far and away Snyder plans to release more de- budget,” Detroit’s Brown said. Washtenaw County Commissioner. Detroit Mayor Dave Bing said the the leader in statutory revenue tails during a March address. “Now we’re competing for $200 mil- “(And) the state’s investment in cuts threaten the city’s “concrete sharing, other cities in Wayne “It would be nice to have it a little lion dollars … and they’re going to cities generally should be called but fragile fiscal progress.” The De- County could lose a total of $24 mil- bit sooner so we could digest it and benchmark how well we are able to into question. For example, the troit City Council’s top fiscal ana- lion, with Taylor and Highland prepare our members,” said Sum- lower health care and pension costs proposed elimination of brown- lyst says Snyder’s proposed rev- Park potentially losing $2.3 mil- mer Minnick, director of state af- and how well we are able to merge field redevelopment and historic enue-sharing cuts are “draconian.” lion and $2 million, respectively. fairs at the Michigan Municipal services with other municipalities, preservation tax credits will again And Detroit City Council President Oakland County communities League. “Will it be completely elimi- and that puts Detroit at a distinct push development towards exur- Pro Tem Gary Brown said Snyder’s stand to lose more than $13.5 mil- nated, can they earn it back, will it disadvantage. There are not a lot of ban and rural communities. At a proposed budget would push the lion, with Pontiac the biggest hit at be half, is it competitive? If you have people willing to merge with the time when every city in Michigan city closer to a state takeover. more than $6 million. And Ma- to have a certain number of con- city of Detroit.” is on the brink of disaster, this call The state shares revenue generat- comb County communities could tracts that are cooperative, what if The city is cutting, Brown said — for partnership sounds more like a ed by the sales tax with Michigan be out a combined $7.9 million, cities are already doing that?” Bing cut $100 million out of the cur- threat than an enticement.” cities under two designations: with the ax falling most heavily on Often, she said, that kind of ne- rent year’s budget, and the council Oakland County Executive L. statutory and constitutional. Con- Warren at $2.9 million and Ro- gotiation takes years to complete. cut an additional $13 million. Brooks Patterson said his county stitutional allotments, which are seville at more than $940,000. “These are complicated issues “So it’s not like we’re not cut- tried in the past to get its local gov- expected to increase by 4 percent in Cities that adopt “best prac- that take months to years to work ting,” he said. “I think there are ernments to collaborate on region- the next fiscal year, are protected, tices” like consolidation and coop- out, so hopefully the proposal will other ways that can be explored,” al service sharing, to no avail. But but statutory allotments are not. erative agreements can compete take some of that into considera- like incentivizing older, more Snyder’s recent budget actions Because the formula that deter- for a share of $200 million in statu- tion,” she said. highly paid police and fire person- could change the conversation. mines a city’s funding is based in tory revenue-sharing dollars, Sny- Will the cuts push cities closer nel to retire, and moving to a de- More than two years ago the part on population, Detroit is the der has said. to insolvency? fined contribution system for the county set aside about $400,000 to largest recipient of revenue shar- But details are scant. “Yes,” Minnick said. “I don’t city’s retirement fund. commission a study by Southfield- ing dollars in the state and, unlike “We’re actually pretty anxious to know how to elaborate on that oth- But “it’s not as easy as saying based Plante & Moran PLLC on re- most Michigan cities, receives see,” said Robert Cannon, chair- er than ‘yes.’ Any time you’re talk- the city of Detroit can go in and gional collaboration, which devel- more in statutory than constitu- man of the Southeast Michigan Coun- ing about a city that revenue shar- break those contracts and reduce See Cities, Page 25

Budget: Lower taxes vs. incentives TAX RESTRUCTURING PLAN Figures are in millions: ■ From Page 1 FY 2012 FY 2013 that include business attraction gap between building on brownfield Current law: and retention, assistance to entre- and greenfield sites. The credit also MBT $2,170.0 $2,024.4 preneurial and growing business- Income tax credits has encouraged people to invest the Proposed reforms: es, and incentives to companies additional time and effort that MBT (repealed Dec. 31, 2011) $900.2 $0.0 that face a significant gap between meet budget ax building or rebuilding on a brown- Corporation Income Tax (effective Jan. 1, 2012) $460.1 $748.8 the cost of doing business in Michi- field site requires, he said. Financial Institutions Tax $27.7 $43.9 gan and another location. State income tax credits for Finney said that Michigan will Certified credits already awarded ($293.0) ($500.0) Additionally, the Michigan Strate- contributions to community still be able to assist brownfield Net business tax revenue after credits $1,095.0 $292.7 gic Fund would receive $25 million foundations, homeless shelters projects. “Projects that historical- Individual Income Tax changes $820.9 $1,863.8 for a grant program to replace film and food banks are among those ly have been incentivized using credits. The state would also allo- eliminated in Gov. Rick Snyder’s brownfields can still be incen- Reserved for future tax cuts — ($100.0) cate $25 million for Pure Michigan proposed fiscal 2012 budget. tivized, if necessary, under this Net impact: tourism promotion. The current credit is 50 per- new structure,” he said. Proposed tax changes $1,915.9 $2,056.5 At the cornerstone of the state’s cent of contributions up to $200 The MEDC has yet to determine Net change from current law ($254.1) $32.1 economic development strategy is for individuals and $400 for cou- how it will allocate the money that a focus on Michigan businesses ples filing jointly. Individuals the governor’s budget proposes and helping them grow. who made $200 contributions to and what form the assistance CURRENT TAX EXPENDITURE COMMITMENTS “Existing businesses represent both a community foundation might take, such as grants, loans, Here’s a look at enacted credits* over the coming fiscal years. Figures are the most significant jobs, econom- and a homeless shelter or food direct investments or other aid to in millions: ic growth that you’re going to see bank currently would have a to- companies. Finney said proposals from companies,” said Michael tal credit of $200 (half of $400 to- would likely go through the $16 million $16 million Finney, president and CEO of the tal) and couples of $400. MEDC, for ultimate approval by $5 million Michigan Eco- Other deductions and credits the Strategic Fund board. = Misc. ** $40 million $32 million nomic Develop- eliminated include those for city “We will have a pool … to ad- = Film $317 million $274 million $16 million ment Corp. “By income tax payments, historic dress the competitive incentive = Brownfield lowering the preservation, college tuition and situations that require the addi- = Battery *** $25 million business tax, vehicle donation. tional support beyond the reduced = MEGA $50 million those companies Retained are the personal ex- business tax,” he said. $293 million … are going to emption, homestead property But the amount of available aid enjoy a signifi- tax credit and what the gover- will be far less. For example, the cant reduction nor’s office describes as “other state last year approved $175.1 mil- $17 million in the overall minor subtractions.” lion in brownfield tax credits for $296 million $75 million cost of doing 79 projects and $2.7 billion in Also retained is the scheduled $245 million Finney business.” reduction in the individual in- MEGA tax credits for 109 projects, And with a lower tax base, he come-tax rate from 4.35 percent to including 12 retention projects to- $50 million said, “you should not have to uti- 4.25 percent, but the proposal taling $2.4 billion in credits and 97 $40 million lize incentives as aggressively.” changes the law that requires the job creation projects totaling $111 million $116 million One area drawing concern is the rate to drop to 3.9 percent in fu- $341.7 million in credits. loss of brownfield and historic ture years. The scheduled de- “What we’re taking is this big preservation tax credits that have crease ultimately would have cost pot and shrinking it down … and played redevelopment roles in De- the state $700 million annually. saying, ‘work with it,’ ” Barr said. FY 2012 FY 2013 FY 2014 FY 2015 troit and other urban areas. “We are greatly reducing the tools Total $293M Total $500M Total $623M Total $618M “There is no reduction in the Richard Barr, partner and co-chair that are available to the MEDC. business tax rate that would at- of the investment incentives and They’ll run out of money, and so * Based on estimates of when awarded certified credits will be claimed. tract people to invest on contami- tax savings group at Honigman they’ll have to be much more selec- ** Includes renaissance zone, historic preservation, farmland preservation, worker nated, functionally obsolete, Miller Schwartz and Cohn LLP. tive in what can be approved un- disability and anchor credits. blighted or historic properties He said the purpose of the brown- der their programs.” *** Includes battery, photovoltaic and polychrystalline credits. since the additional costs to do so field tax credit was not to reduce Amy Lane: (517) 371-5355, Source: Office of Revenue and Tax Analysis, Michigan Department of Treasury are so high in most cases,” said business tax loads but to narrow the [email protected] 20110221-NEWS--0025-NAT-CCI-CD_-- 2/18/2011 6:16 PM Page 1

February 21, 2011 CRAIN’S DETROIT BUSINESS Page 25

www.crainsdetroit.com Medicaid spared; teaching hospitals face cuts EDITOR-IN-CHIEF Keith E. Crain PUBLISHER Mary Kramer, (313) 446-0399 or compared with the $14.12 billion [email protected] EXECUTIVE EDITOR Cindy Goodaker, (313) 446- Providers surprised by insurance claims tax budget for this year. 0460 or [email protected] As part of the proposed budget, DEPUTY MANAGING EDITOR Jennette Smith, (313) 446-1622 or [email protected] BY JAY GREENE In fiscal 2011, DMC is expected to nesses is the new 1 percent insur- Snyder wants to roll about 200,000 SENIOR EDITOR Bob Allen, (313) 446-0344 or CRAIN’S DETROIT BUSINESS receive $57 million in graduate ance claims tax, which could cost dual-eligible beneficiaries of the [email protected] medical education payments and hospitals millions of dollars, said Medicare and Medicaid programs WEST MICHIGAN EDITOR Matt Gryczan, (616) 916- Hospitals, doctors and nursing UM is slated to receive $38.7 mil- Peter Schonfeld, senior vice presi- into managed care plans that are 8158 or [email protected] homes in Michigan will not have COPY DESK CHIEF Gary Piatek, (313) 446-0357 or lion, said Stephen Fitton, the state dent, policy and data services with administered by health mainte- [email protected] Medicaid payments cut under Gov. Medicaid director. The cuts would the Michigan Health and Hospitals As- nance organizations. ASSISTANT NEWS EDITOR Jeff Johnston, (313) Rick Snyder’s proposed 2012 bud- reduce DMC’s payments by $23 mil- sociation. The goal would be to increase ef- 446-1608 or [email protected] get that begins Oct. 1. DATA EDITOR Anne Marks, (313) 446-0418 or lion and UM by $15.5 million. “Health care will pay the largest ficiency and provide greater care [email protected] But the state’s teaching hospi- “Any major cut … will affect us chunk of that tax because we are coordination for the elderly popu- WEB DEVELOPER Steve Williams, (313) 446- tals face a $67 million overall cut and other teaching hospitals great- one of the state’s largest employ- lation, many of whom have multi- 6059, [email protected] in reimbursements for physician ly at a time when health care insti- ers,” Schonfeld said. ple chronic diseases. The budget WEB EDITOR Gary Anglebrandt, (313) 446-1621, training programs and will be [email protected] tutions are already facing daunt- Self-insured employers like DTE projects a $10 million savings in EDITORIAL SUPPORT Robertta Reiff (313) 446- asked to pay millions of dollars ing financial challenges,” said Energy Co. and Kelly Services Inc. the general fund. 0419, YahNica Crawford, (313) 446-0329 from a new 1 percent tax on paid NEWSROOM (313) 446-0329, FAX (313) 446- Mary Masson, a public informa- also would be required to pay the 1 In 2010, Michigan spent about 1687 TIP LINE (313) 446-6766 employee medical claims. tion officer for the University of percent tax. Officials for the com- $3.6 billion of its $11.2 billion in Overall, Michigan hospitals ex- REPORTERS Michigan Health System. panies declined to comment. Medicaid expenses, taking care of Daniel Duggan: Covers retail, real estate and pect to receive about $50 million As the nation’s third-largest pro- Snyder’s budget foresees replac- the state’s more than 200,000 dual hospitality. (313) 446-0414 or this fiscal year from the state for [email protected] gram, UM trains 1,100 physicians ing the 6 percent Medicaid HMO eligible beneficiaries. Medicare Jay Greene, senior reporter: Covers health care, physician training and $118 million in 93 residency programs at the use tax, which generates $400 mil- spent another $4.2 billion. insurance and the environment. (313) 446-0325 or from federal matching dollars for [email protected]. university’s three hospitals. lion annually, with the 1 percent “We support payment reforms Chad Halcom: Covers law, non-automotive graduate medical education. Daniel Michael, M.D., president tax. The federal government is ex- that create better value and where manufacturing, defense contracting and Oakland and Macomb counties. (313) 446-6796 or Snyder’s budget proposal calls of the Michigan State Medical Soci- pected to ban HMO use taxes that costs go down and quality goes [email protected]. for teaching hospitals like Detroit Tom Henderson: Covers banking, finance, ety, said physicians are concerned are used by states to boost federal up,” Schonfeld said. “If there is an technology and biotechnology. (313) 446-0337 or Medical Center and Ann Arbor- about the cuts to physician resi- matching share dollars. opportunity to improve case man- [email protected]. based University of Michigan Hospi- Nancy Kaffer: Covers small business, the city of dency programs in light of studies Snyder also is recommending agement, this creates an opportu- Detroit, Wayne County government. (313) 446- tals, which are the two largest that show Michigan will soon face $41.5 million in cuts from the state nity for the state to find savings 0412 or [email protected]. teaching hospitals in the state, to Bill Shea, enterprise editor: Covers media, a shortage of physicians, especial- Department of Community Health. The and improve quality.” advertising and marketing, the business of sports, have physician training programs ly primary care doctors. proposed fiscal year 2012 budget for Jay Greene: (313) 446-0325, and transportation. (313) 446-1626 or cut by 40 percent next year. [email protected]. A surprise to health care busi- community health is $13.97 billion [email protected] Nathan Skid: Multimedia reporter. Also covers the food industry and entertainment. (313) 446-1654, [email protected]. Sherri Welch: Covers nonprofits and services. (313) 446-1694 or [email protected] Dustin Walsh: Covers auto suppliers, steel, higher education and Livingston and Washtenaw Cities: Fear Uncertainty over incentives slows film work counties. (313) 446-6042 or [email protected] LANSING BUREAU Amy Lane: Covers business issues at the Capitol, telecommunications and utilities. (517) 371-5355, BY NATHAN SKID centives went into effect in 2008. reach 100. Snyder said he will FAX (517) 371-2492, [email protected]. or 115 W. over cuts CRAIN’S DETROIT BUSINESS S3 Entertainment has a 25,000- honor any incentives that already Allegan, Suite 220, Lansing 48933. square-foot production house in have been promised. ADVERTISING ■ From Page 24 Gov. Rick Snyder’s call to re- Ferndale and is near completion Pixofactor Entertainment was ADVERTISING DIRECTOR Marla Downs, (313) oped specific proposals for at least place Michigan’s generous film 446-6032 or [email protected] of a 60,000-square-foot school and the state’s first video game compa- SALES INQUIRIES: (313) 446-6052; FAX (313) six of the county’s 61 communities. incentives with a $25 million stage in Allen Park. ny to be awarded tax incentives. 393-0997 None followed up, he said. grant program has temporarily “We do not believe we can sur- But not everyone is sad to see ADVERTISING SALES Christine Galasso, Matthew J. Langan, Lori Tournay Liggett, Tamara Rokowski, “We were actually turned down put the brakes on production vive with what’s planned,” the credits fade to black. Cheryl Rothe, Dale Smolinski by all six governments we had in- plans around the state as the film Spilman said. Mike LeFaive, director of fiscal CLASSIFIED SALES (313)-446-0351 volved. We finally had to stop be- industry braces for change. The Michigan Film Office issued a policy for the Mackinac Center for MARKETING MANAGER Irma Clark EVENTS MANAGER Nicole LaPointe cause we realized we would just be The current incentives provide statement saying it will remain Public Policy, said the eradication wasting money. People in commu- MARKETING ARTIST Sylvia Kolaski a cash rebate of up to 42 percent of open and will work within the of the tax incentives is a step in SALES SUPPORT Suzanne Janik, YahNica Crawford nities seem to like their unique the total amount spent by a film, bounds of any the right direction for a state try- CIRCULATION Candice Yopp, Manager. identity, and nobody wanted to en- television or video game produc- new policy. ing to get its finances in order. MARKETING COORDINATOR Kim Winkler tertain that discussion,” he said. PRODUCTION MANAGER Wendy Kobylarz tion company in Michigan. Sean Hur- “I think it’s a sound public poli- “Maybe now, some new econom- PRODUCTION SUPERVISOR Larry Williams Chris Baum, senior vice presi- witz, president cy move,” LeFaive said. “The in- ic realities will drive a different Detroit Metro Convention CUSTOMER SERVICE decision.” dent of the of Royal Oak- centives are a proven failure as a Cannon said the state also needs and Visitors Bureau and its Film De- based video job creator and amount to an ex- MAIN NUMBER: Call (877) 824-9374 or write troit division, said he was fielding game maker pensive public relations program [email protected] to revamp some of the laws that SUBSCRIPTIONS $59 one year, $98 two years. calls of concern from California Pixofactor Enter- that bought more job announce- Out of state, $79 one year, $138 for two years. govern contracts with municipal Outside U.S.A., add $48 per year to out-of-state employees, to aid in collaboration. even before Snyder ended his bud- tainment LLC, ments than real jobs.” rate for surface mail. Call (313) 446-0450 or (877) 824-9374. “A lot of the meaningful collabo- get presentation Thursday. said the incen- In a response to a 2008 Michigan “We just canceled a sales trip to tives were in- State University SINGLE COPIES: (877) 824-9374. ration that has to happen now is report touting a net REPRINTS: (800) 290-5460, ext. 125; (717) 505- very hard to do. The local commu- Hollywood next week,” he said. Spilman strumental in job gain related to the film indus- 9701, ext. 125; or ashley.zander@theygsgroup “We had a full week of new projects finding investors willing to put .com. nities are looking at that and un- try of 2,800 in 2008, the Mackinac TO FIND A DATE A STORY WAS PUBLISHED: derstand the spot the state is in but to look at, but we canceled because up the $2.5 million needed for its Center says the actual number of (313) 446-0367 or e-mail [email protected]. need the tools to better equip them- we don’t know the new rules.” current project, a golf game based full-time positions created was CRAIN’S DETROIT BUSINESS IS PUBLISHED BY selves,” said Beth Bialy, leader of Baum said the governor’s an- on Ben Hogan’s book Five only 254 when length of the work is CRAIN COMMUNICATIONS INC. the government services group at nouncement led to a near-imme- Lessons: The Modern Fundamen- factored in. A study to be released CHAIRMAN Keith E. Crain diate loss of potential movie busi- tals of Golf. PRESIDENT Rance Crain Plante & Moran. today conducted by Ernst and Young SECRETARY Merrilee Crain As the law stands, merging func- ness because “this is the time of “If we weren’t able to use tax in- LLP and commissioned by the con- TREASURER Mary Kay Crain centives, we would not be able to Executive Vice President/Operations tions won’t necessarily save cities year when movie studios make vention and visitors bureaus for William A. Morrow money, said Bettie Buss, senior re- their commitments. They were work on the development of the Detroit, Grand Rapids, Ann Arbor Group Vice President/Technology, Manufacturing, Circulation search analyst at the Citizens Re- looking at Michigan because of Ben Hogan video game for the Nin- and Traverse City, found that the Robert C. Adams search Council. our changing seasons, but now tendo Wii,” Hurwitz said. “The film, TV and digital gaming indus- Vice President/Production & Manufacturing The Public Employees Relations Dave Kamis they are looking elsewhere.” 40 percent tax incentive helped tries created 3,860 full-time equiva- Chief Information Officer Act, Act 312, the Urban Cooperation Jeff Spilman, CEO of Ferndale- mitigate the risk to investors.” lent jobs and generated an estimat- Paul Dalpiaz Act, the Intergovernmental Trans- Corporate Circulation/Audience Development based S3 Entertainment Group, said Hurwitz said Pixofactor reno- ed $503 million in 2010 while Director fer of Functions and Responsibili- he laid off four full-time employ- vated a 6,500-square-foot vacant costing the state just $28 million. Kathy Henry ties Act, the Emergency Service Au- G.D. Crain Jr. Founder (1885-1973) ees Friday morning after the sud- studio in Royal Oak and hired 25 While LeFaive said $25 million thorities Act, the Metropolitan Mrs. G.D. Crain Jr. Chairman (1911-1996) den cancellation of four films slat- employees based on the incentives. in grants is still too much for a EDITORIAL & BUSINESS OFFICES: Transportation Authorities Act all ed for production. “We didn’t come here, swoop in, state in financial disarray on 1155 Gratiot Ave., Detroit MI 48207-2732; (313) have language saying that public 446-6000 Spilman said the cancellations leave and take the money with us Cable address: TWX 248-221-5122 AUTNEW DET employees can’t be put in a negative unessential programs like the cost his company $4 million to out of state,” Hurwitz said. “All of CRAIN’S DETROIT BUSINESS ISSN # 0882-1992 position with regard to benefits and film industry, he said it is possi- is published weekly, except for a special issue the $5 million in revenue. “And that’s our dollars are raised here and ble the new administration felt third week of January, a special issue the fourth wages as the result of a merger, week of August, and no issue the third week of not including what could happen stay here. We are in the midst of compelled to keep something in December by Crain Communications Inc. at 1155 Buss said. Gratiot Ave., Detroit MI 48207-2732. Periodicals “What we’ve found is the today or next week,” he said. finding local investors to raise an- place because of its popularity. postage paid at Detroit, MI and additional mailing Spilman said his concern is other $2 million to develop a mo- “But they know it’s an ineffec- offices. POSTMASTER: Send address changes to economies just aren’t there,” she CRAIN’S DETROIT BUSINESS, Circulation said. “It’s expensive to do up front, that the $25 million allotted in bile application.” tive and expensive program and Department, P.O. Box 07925, Detroit, MI 48207- 9732. GST # 136760444. Printed in U.S.A. and if you’re not getting long-term grants is not enough to generate Hurwitz said he hopes to hire it needs to be reined in to keep the Entire contents copyright 2011 by Crain savings why would you do it? The the quantity of production needed 25 employees by the end of next state going,” he said. Communications Inc. All rights reserved. Reproduction or use of editorial content in any state needs to remove barriers to to maintain the infrastructure year, and with the incentives in Nathan Skid: (313) 446-1654, manner without permission is strictly prohibited. shared services.” that has been built since the in- place, he says that number could [email protected] 20110221-NEWS--0026-NAT-CCI-CD_-- 2/18/2011 5:42 PM Page 1

Page 26 CRAIN’S DETROIT BUSINESS February 21, 2011 RUMBLINGS WEEK ON THE WEB FROM WWW.CRAINSDETROIT.COM, WEEK OF FEB. 12-18

getting out after seeing a major sales drop. Feds charge 21 GREETING CRAIN’S NEWSMAKER OF THE YEAR Smart sold 24,622 cars in Charity rises 2008, according to Crain’s Wayne County sister publication Automo- Executive Robert from area in Ficano (left) and tive News, as gasoline prices Crain’s Detroit reached record highs. Sales Business Editor-in- in 2010 are down to 5,927. Medicare fraud online from Chief Keith Crain Penske ended the week (right) meet with on top as Penske Automo- multicity sweep tar- Gov. Rick Snyder, tive Group (NYSE: PAG) geting Medicare who was honored posted a 52 percent year- A fraud rings has led as Crain’s 2010 Robo rubble over-year increase in net in- to criminal charges against Newsmaker of the come with $28.5 million 111 people, including 21 Year on Feb. 14 at Joe Louis Arena. hat’s next? A “Red compared to $18.7 million. health professionals and Dawn” tank News sent the stock to a others in Southeast Michi- ARA HOWRANI W homage? high that hasn’t been seen gan, U.S. Attorney Barbara Last week brought an In- since August 2009 as shares McQuade said. Of the 21 peo- March as well. year, levels not reached ternet fundraising flurry traded above $22 on ple charged in Detroit, Ⅲ Wireless Toyz Inc. will since before the recession for the idea of putting up a Wednesday. three are doctors, three are not have to pay more than after General Motors Co. and “RoboCop” statue near the physical therapists, one is $200,000 in damages to a Chrysler Group LLC closed lo- Michigan Central Station. an occupational therapist cations, according to the It began when an anony- Women’s Power Breakfast Colorado franchisee, Col- and the rest worked for mous Twitterer posed the orado Toyz Inc., in a 2010 dealership consultant Ur- to hear from ‘1-8-7’ star home health, physical ther- question to Detroit Mayor lawsuit after a new judge in ban Science. The National apy and other medical com- Dave Bing, whose office said Erin Cummings, star of the case threw out a jury Automobile Dealership Associ- than this,” he said. panies. there were no plans to put “Detroit 1-8-7” and founder verdict of fraud from a year ation forecasts total U.S. But there’s a silver lin- up a statue honoring the of Mittens for Detroit, will be Those charged in Detroit ago. Oakland County Cir- sales in 2011 may rise 11 ing: With many bemoaning man-machine that starred the keynote speaker during allegedly ran schemes to cuit Judge Shalina Kumar percent to 12.9 million, that a frivolous fundraising in the 1987 movie. the 18th annual Gleaners defraud Medicare out of cited improperly instructed which would be about 23 effort was so successful, But it was too late. The Community Food Bank of more than $23 million. jurors and a franchise percent less than the annu- some intrepid metro Detroi- Internet caught hold of the Southeastern Michigan agreement disclaimer in al average from 2000 to ters are hoping to turn the idea, and there was no stop- Women’s Power Breakfast the decision. 2007, Bloomberg News Ser- Robocop buzz into dollars ON THE MOVE ping it. Now, thanks to the on April 13 at the Somerset Ⅲ Farmington Hills- vice reported. for area nonprofits. fundraising site Kick- Collection. Ⅲ Detroit Executive Service based Friedman Real Estate Ⅲ Macomb County Exec- RoboCharity, created late starter, $50,000 has been The goal of this year’s Corps President John Cocci- Group has been hired as the utive Mark last week, is asking donors raised for the construction breakfast is to double the olone has stepped down to Hackel said to support more worthwhile exclusive leasing agent for of said statue. size of the Weekend Back- take an undisclosed posi- the office portion of the he intends causes, with its first focus pack Program for children Even The New York tion in Connecticut. Allen new Raleigh Michigan Stu- to form a on Forgotten Harvest. in Southeast Michigan. Times covered the story last Venable, attorney at Venable dios in Pontiac. task force of “We can have our Robo- More than 250,000 children week, complete with a cita- Law PLLC in Southfield, has Ⅲ The bankruptcy filing business cop and eat it too,” says the here receive two out of their tion of Crain’s reporter been named interim presi- by Borders Group Inc. will owners, ex- charity group’s Facebook three meals from school Nancy Kaffer’s blog entry, dent. likely cost $2.6 million in ecutives, page. each day. But on weekends “This is what happens Ⅲ Dave Morlock, CFO of elected offi- they often go without, ac- annual rent for Farmington when irony runs amok.” the Universi- Hills-based real estate com- Hackel cials and In a case study of what cording to Gleaners. Penske drops Smart car ty of Michi- pany Agree Realty Corp. Of military leaders to culti- the Internet can do for an Gleaners partners with gan Health the 200 stores listed to be vate the economic develop- unexpected idea, more than In a week of big news for local schools to distribute System, has closed, Agree owns five, ment potential in the de- 1,600 people donated an av- Roger Penske’s Penske Auto- backpacks filled with nutri- resigned to none in Michigan, accord- fense industry for Warren erage of $17 toward the motive Group, the auto re- tious food for the weekend take a job ing to a filing with the U.S. and Sterling Heights. cause. Half was from the tailing company an- to children who rely on free Ⅲ nounced its intention to and reduced fee school at Chicago- Securities and Exchange Com- Michigan Democrats owner of a California com- re-elected pany that specializes in drop distribution of Daimler meals during the week. The based Ac- mission. Mark Brewer movie products. AG’s Smart brand. Penske backpack program provides cretive Ⅲ General Motors Co. said Morlock of Clinton Reaction has been mixed. handed the distribution off about six meals. Health, a it expects to give unionized Township Some see RoboCop as a to Mercedes-Benz, which Cummings’ Mittens for revenue cycle management U.S. hourly employees prof- as party prospective tourist attrac- will only work with dealer- Detroit campaign collects company. Robin it-sharing checks averag- chairman tion; others say it is an un- ships that also sell Mer- and distributes new gloves Damschroder, the health sys- ing at least $4,000 as it pre- needed reminder of crime. cedes vehicles, cutting 21 and mittens to needy De- tem’s controller, has been pares to negotiate a labor at the par- contract this year, ty’s conven- Joe Posch, owner of the dealers and leaving 58. troit children and adults appointed interim CFO. Bloomberg News Service Detroit store Mezzanine, Note: Penske’s group has through local nonprofits Ⅲ Alison Davis-Blake, dean tion at Cobo reported. Brewer blogged at length about rea- four of the 21 to be cut. like Covenant House of Michi- of the Carlson School of Center, AP Ⅲ Lennon-based Waste sons against the statue, While Mercedes said the gan. Management at the Univer- reported. Management of Michigan complete with a rendering deal is about achieving low- For more information sity of Minnesota, is to be- Ⅲ Michigan law legaliz- said Wednesday it will in- of how it might look. er average fuel economy for about the breakfast, visit come dean of the University ing medical marijuana vest a combined $21.5 mil- “I think we are better its U.S. offerings, Penske is www.gcfb.org. of Michigan’s Ross School of doesn’t stop private busi- lion in two renewable ener- Business effective Aug. 22, nesses from firing people gy plants that convert subject to approval by the for drug use, U.S. District landfill gas into electricity: board of regents. She re- Judge Robert Jonker said in in Oakland County’s Orion places Robert Dolan, who is dismissing a lawsuit Township and Macomb against Wal-Mart Stores Inc., stepping down as dean af- County’s Lenox Township. ter two five-year terms. AP reported. The American BEST FROM THE BLOGS Civil Liberties Union said it READ THESE POSTS AND MORE AT WWW.CRAINSDETROIT.COM/BLOGS OTHER NEWS would appeal. COMPANY NEWS Ⅲ Detroit Mayor Dave Ⅲ Wayne State University Bing on Monday toured Their kitchen can be yours Stock market is confusing Ⅲ Southfield-based Lear said it will offer a graduate New Orleans to observe Corp. said it has instituted a and undergraduate certifi- When two friends each When Agree Realty how that city is recovering needed a commercial 2-for-1 stock split, begun a cate in advanced energy noted that five of its more than five years after kitchen for their Borders properties $400 million stock buyback storage systems in the fall. Hurricane Katrina, AP re- aspiring businesses but would close after the program and paid a $25- Kwo Young, chief scientist at couldn’t afford one on bookseller’s cent-a-share dividend to Rochester Hills-based Ener- ported. their own, they created bankruptcy filing, stockholders. Shareholders gy Conversion Devices Inc., The Culinary Studio. resulting in a $2.6 will be issued one share for Now others can cook, and his colleagues at the BITUARIES million revenue hit, every share already owned O too. advanced battery materials the stock went up. as of March 4. The split will Ⅲ James Giftos, the There is a reason. manufacturer will teach occur March 17. The repur- classes. founder of National Coney Is- chase program expires Feb. Ⅲ U.S. auto sales per land and owner of the Na- Reporter Nathan Skid’s Detroit-area restaurant blog Reporter Dan Duggan’s blog on commercial real estate 16, 2014. The dividend will dealership may rise to tional Chili Co., died of can- can be found at www.crainsdetroit.com/skid can be found at www.crainsdetroit.com/duggan be paid to shareholders in about 745 new vehicles this cer Feb. 14. He was 72. DBpageAD.qxp 2/10/2011 11:59 AM Page 1 DBpageAD.qxd 10/29/2010 10:35 AM Page 1

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