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www.crainsdetroit.com Vol. 29, No. 8 FEBRUARY 25 – MARCH 3, 2013 $2 a copy; $59 a year

©Entire contents copyright 2013 by Crain Communications Inc. All rights reserved Page 3 Compuware Belle Tire on a roll with Detroit prepares for remodeling stores takeover try Art Van not lounging asks: Where’s around EM; Snyder mulls pick when it comes to board’s IT IQ? City can expect an 18-24 month stint expanding BY TOM HENDERSON CRAIN’S DETROIT BUSINESS BY KIRK PINHO In an interview with Crain’s Detroit Business CRAIN’S DETROIT BUSINESS last week, Snyder said he has a short list of emer- State ready to roll the dice Whether Elliott Management Corp. gency manager candidates and his administration decides to make a better offer for Com- Wanted: A seasoned turnaround expert who can is considering candidates from across the U.S. But on Internet lottery puware Corp., it likely will ask for a lead the city of Detroit through tough decisions he wouldn’t speculate on how many there are or shake-up of the company’s board of needed to fix its balance sheet. where they are from. directors, based on its past proxy bat- Experts believe an emergency manager in the The Financial Review Team on Tuesday said the Inside tles with other publicly traded infor- city is all but certain; Snyder said Thursday he will city has “no satisfactory plan” to address its finan- mation technology companies. take at least another week to make a decision on cial problems, although Mayor Dave Bing respond- Barring, that is, Compuware’s sale whether he agrees with the Financial Review Team’s ed Wednesday by saying that while the city has a Newsmaker to another suitor. conclusion that the city is in a financial emer- plan agreed to by the state and Detroit Financial Advi- On Thursday, Reuters reported that gency. sory Board, significant roadblocks exist to its full winner Compuware (Nasdaq: CPWR) has But whoever gets the job will have an enormous implementation. Schlichting held prelimi- task as he or she tackles a cumulative cash deficit Those include a restrictive city charter, law- HUNGRY nary talks with of $100 million by June 30, a $327 million general suits, and “a scarcity of financial and human re- tells why New York City- fund deficit in fiscal year 2012, and more than $14 INVESTORS based Blackstone billion in debt. See Snyder, Page 19 health Group LP and Lear Corp., others Fort Worth, system is also battling activist investors, Texas-based TPG finding Page 20 Capital LP. In a EM FAQS release dated success in the city. Page 7 Jan. 25, Com- puware said it Can the city reject an would entertain other offers. Capitol Briefings: State’s When New York-based Elliott appointment? What bumpiest road is on the launched its $2.3 billion offer to buy Compuware and take it private in De- powers does an EM route to repairs. cember, Jesse Cohn, a portfolio man- have? What about Page 9 ager for the hedge fund, said Com- puware’s independent board labor contracts? members lacked technology back- This Just In grounds and seemed chosen more for being high-profile members of the See Page 19 Lakeshore Express Aviation community than for having an ability to provide expert advice. adds local flights NATHAN SKID See Compuware, Page 21 Lakeshore Express Aviation is adding service between Chicago’s Midway Airport and Oakland County International Airport in Waterford Town- ship. Service begins June 6 and Price-fixing probe may widen; suppliers uneasy will operate Thursday-Sun- day. Tickets cost $109 each BY CHAD HALCOM wider. Group and NTN Corp., were previously in- way, said Luke Dixon, vice CRAIN’S DETROIT BUSINESS Earlier this month, Tokyo-based bear- dicted by the Tokyo District Public Pros- president of technology for ings and electric power steering compo- ecutor’s Office last June, following a Lakeshore. Over the past two years, more than nents supplier NSK Ltd. reported in a price-fixing investigation by Japan Fair The carrier will use a two- $800 million in judgments against indi- public disclosure that its U.S. sub- Trade Commission. jet fleet – a pair of Saab viduals and companies have been sidiary, NSK Americas Inc. in Ann Arbor, NSK Americas President Bernard 340B’s with 30 seats. reached related to automotive supplier has received a subpoena from Justice re- Lindsay and Vice President of Finance Lakeshore currently offers price-fixing, but for four months the U.S. questing information on its sales of bear- Brian Parsons did not return phone calls service between Midway and IG CASES B Department of Justice has been fairly qui- ings. seeking comment last week, but a com- the Pellston Regional Airport. Hot flap over et about its ongoing investigation. The company’s Singapore subsidiary pany statement said NSK is cooperating More information is avail- homeowners Still, officials and investigated compa- also underwent an unannounced inspec- in the investigations. able at www.lakeshoreex- insurance and nies have dropped new hints that the tion Feb. 6 from that country’s Competi- “Financial losses … may occur in the press.com. other top verdicts government’s work in Detroit isn’t over tion Commission. NSK, along with bear- — Ryan Felton of 2012, Page 11 — and the investigation may be getting ings market competitors Nachi-Fujikoshi See Price fixing, Page 18

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Page 2 CRAIN’S DETROIT BUSINESS February 25, 2013

MICHIGAN BRIEFS Mich. firm accused of honey up nearly 40 percent from 2011. Ⅲ Priority Health’s chief medical of- laundering with China imports Magna brings new life to ECD plant in Battle Creek ficer for the past 20 years, Jim There’s more to this story than Byrne, will retire in July, the Grand A never-occupied plant in Battle Creek that was incentives from the federal, state and county gov- the fact that a headline writer Rapids Business Journal reported. built by now-bankrupt United Solar Ovonic LLC has a ernments. Magna received a $1.6 million perfor- could have untold amounts of fun Ⅲ The Grand Valley State University new owner. mance-based Michigan Business Development with bee-related puns. Last week, board of trustees has approved $18.7 Cosma Castings Michigan, a subsidiary of Canadian grant from the Michigan Strategic Fund. The city of the feds accused a honey process- million in renovations and addi- auto supplier Magna International Inc., purchased the Battle Creek provided a 50 percent real property tax ing plant south of Jackson of help- tions to the main Allendale campus. plant and plans to bring 572 jobs with an investment abatement and 100 percent personal property tax ing pollinate the smuggling and Ⅲ Lansing-based Demmer Corp. of $162 million, MiBiz reported. abatement, both for 12 years. mislabeling of honey from China. has laid off about 90 employees, When the parent of United Solar Ovonic, Auburn Signature Associates Inc. represented the buyer and Also charged were another proces- citing reasons that include a loss Hills-based Energy Conversion Devices Inc., built the the seller. The plant had been for sale for $5.6 mil- sor and five individuals. of defense-related programs, plant in 2008, it received about $120 million worth of lion, but the purchase price was not disclosed. The group allegedly mislabeled WLNS-TV reported. It’s the fourth Chinese-origin honey in an at- round of layoffs at Demmer in re- cent years. tempt to skirt more than $180 mil- returned the verdict after deliber- cials said three companies had in the manufacturing and sale of Ⅲ lion in anti-dumping duties, ating for parts of two days, filed tax liens against the Holland the compressors, which in turn What is Michigan’s most pop- Bloomberg News reported. The Bloomberg News reported. The tri- plant for more than $250,000 over raised prices for consumers. ular tourist attraction? According charges from the investigation al before Judge John Lungstrum of work not paid for, WOOD-TV in Ⅲ The Experience Grand Rapids to a story in Bridge Magazine (yes, you could say it was a sting), U.S. District Court began Jan. 23. Grand Rapids reported. At the visitors bureau said hotel revenue about the “Pure Michigan effect,” called “Project Honeygate,” led to The case started in 2005 with al- Michigan Economic Development in Kent County totaled more than it’s Frankenmuth, with 3 million two of the nation’s largest honey legations that Dow plotted with Corp., officials told MLive.com $127 million last year, up 11 per- visitors annually. Good news, un- suppliers — Texas-based Honey BASF SE, Huntsman International LLC that they had not paid any of the cent from the previous record high less you’re a chicken. Holding and Onsted-based Groeb and Lyondell Chemical Co. in viola- state tax credits promised to LG set in 2011, the Grand Rapids Busi- Find business news from Farms Inc. — entering into deferred tion of federal law. Only Dow did- Chem. The battery maker was or- ness Journal reported. The in- around the state at crainsdetroit prosecution agreements and pay- n’t settle. At the heart of the suit dered to refund $842,000 of its $151 crease is higher than the 7.7 per- .com/crainsmichiganbusiness. ing $1 million and $2 million in were urethane-based products million federal stimulus grant cent average gain in the state and Sign up for Crain's Michigan fines, respectively. used in the automotive, construc- last week after it was reported the 7.3 percent increase nation- Business e-newsletter at crains tion, appliance and furniture in- that it was paying workers to do wide. Conventions brought 243,491 detroit.com/emailsignup. dustries. just about everything except attendees to Grand Rapids in 2012, Jury: Dow Chemical must pay Dow is “evaluating all of our op- make batteries because demand $400M for fixing urethane prices tions, including appeal,” Rebecca was nonexistent. Bentley, a company spokeswoman, Ⅲ General Electric Co. has sued CORRECTIONS Midland-based Dow Chemical Co. wrote in an email. Whirlpool Corp., accusing the Ben- conspired with other companies to ton Harbor-based home appliance Ⅲ Because of a data sorting error, the list of largest office leases in 2012 fix urethane product prices and maker of conspiring to fix prices that appeared on Page 16 of the Feb. 18 issue omitted many of the must pay buyers of those products MICH-CELLANEOUS largest leases. A correct list appears on Page 9. for refrigerant compressors. Ⅲ more than $400 million in damages, Ⅲ Batteries continued to be Bloomberg News reported that GE SAE Detroit Section was incorrectly identified under its former name a federal jury ruled last week. battered last week at LG Chem claims that Whirlpool and other of the Society of Automotive Engineers in a Calendar item in the Feb. 18 The jury in Kansas City, Kan., Michigan Inc. Allegan County offi- defendants restrained competition edition.

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February 25, 2013 CRAIN’S DETROIT BUSINESS Page 3

Inside Art Van: Chicago is our kind of town Tigers success gives Fox Sports clout with raising ad Firm targets Illinois stores, Michigan growth rates, Page 4 Lear just one of case of BY SHERRI WELCH Kim Yost told Crain’s late last of the Chicago-area stores, citing CRAIN’S DETROIT BUSINESS week. The stores will open in competitive reasons, but Crain’s investors sparring with Batavia, Bolingbrook, Orland Park, Chicago Business reported in Sep- Art Van Furniture Inc. is poised to Ford City and Lincoln Park, Ill., tember that the company had hired company execs over board enter the country’s third-largest and Merrillville, Ind. local real estate brokers to look for market for furniture and mattress Yost declined to say which sub- 60,000-square-foot sites. strategy, Page 20 sales: Chicago. urb it has purchased property in, To supply inventory to the new At the same time, the Warren- what it paid or who the seller was, stores, Art Van has leased an based company is making moves citing competitive reasons. 180,000-square-foot warehouse in to expand in Michigan, with fran- “We haven’t found a location in Bolingbrook that will work in tan- chise agreements for new markets, downtown Chicago that works for dem with its 1 million-square-foot investments in its high-end Scott us — yet,” Yost said. warehouse in Warren. In addition Shuptrine Interiors line and a new The stores are the first of what to its furniture lines, the new Company index appliance business. will be more than a dozen Art Van stores will include Art Van’s affili- These companies have significant mention in this Those efforts follow Art Van’s furniture stores and an equal num- ate companies: Pure Sleep mattress- previously announced expansion week’s Crain’s Detroit Business: DAVID DALTON ber of mattress stores over the es, World of Floors, Art Van Clear- in the Toledo area. Adell Broadcasting ...... 12 CEO Kim Yost says Art Van plans to next three years, the company said ance Centers, Paul’s TV and a new open six stores in the Chicago area Art Van has acquired one prop- in a LinkedIn job description for a segment coming into all Art Van Art Van ...... 3, 20 this year. It also plans to open its first erty and leased five others to open regional training manager in locations: Paul’s Appliances, featur- Associated Food & Petroleum Dealers ...... 3 six stores in the Chicago area be- standalone Scott Shuptrine Interiors Chicago. Behr America ...... 18 store, in Royal Oak, on March 7. tween July and September, CEO Yost declined to disclose the size See Art Van, Page 20 Belle Tire ...... 3 Chrysler Group ...... 14 Compuware ...... 1 Deborah L. Gordon ...... 15 Detroit Tigers ...... 4 State ready Dykema Gossett ...... 17 Flagstar Bancorp ...... 18 Foley & Lardner ...... 18 to gamble on Fox Sports Detroit ...... 4 Gorman’s Furniture ...... 20 Henry Ford Health System ...... 7 Hercules Drawn Steel ...... 13 Internet lottery Inland Waters Pollution Control ...... 12 JGA ...... 19 Retailers worry about KM Eight Mile Group ...... 15 Lakeshore Express Aviation ...... 1 Lear ...... 20 loss of foot traffic Liss, Seder & Andrews ...... 13

Loomis Sayles ...... 20 BY AMY LANE Mantese and Rossman ...... 13 SPECIAL TO CRAIN’S DETROIT BUSINESS Michigan Grocers Association ...... 17 Michigan’s thousands of lottery retailers NSK Americas ...... 1 soon could see a new competitor on their tick- O’Keefe and Associates ...... 19 et-selling turf: iLottery. The Snyder administration plans to launch Plunkett Cooney ...... 19 a new Internet lottery system that would al- Reosti & Sirlin ...... 11 low people in Michigan to play digital ver- Salem Land Associates ...... 15 sions of games like those currently offered at Sommers Schwartz ...... 11 stores — but with smartphones and comput- ARA HAWRANI University of Michigan ...... 15, 20, 21 The Belle Tire store on Southfield Road near 13 Mile in Southfield has been remodeled, with separate pods ers. Wayne State University ...... 21 for customer service, a workstation (rear) and a new showroom configuration. The proposal could change the landscape of Michigan’s 40-year-old lot- Weather Underground ...... 15 tery and, by state projec- Williams, Williams, Rattner & Plunkett ...... 11, 15 tions, pump at least $118 million in profits into the Belle Tire plans to spread its tread state School Aid Fund in iLottery’s first four years BY SHERRI WELCH customer — that’s really the business we’re in.” and deliver an additional CRAIN’S DETROIT BUSINESS Barnes declined to say how much the compa- $361 million over the fol- Department index ny is spending on the renovations and store lowing four years. Belle Tire Distributors Inc. is moving into new BANKRUPTCIES ...... 9 openings. However, some question Michigan markets and renovating its 85 stores BUSINESS DIARY ...... 16 Belle Tire ranked No. 11 on whether iLottery would be to improve customer service and gain market a list of the largest indepen- competition, or complemen- Arabo CALENDAR ...... 10 share. dent tire retailers in the U.S. tary, to Michigan’s nearly 11,000 lottery retail- CAPITOL BRIEFINGS...... 9 The Allen Park-based tire retailer opened as compiled by Tire ers. CLASSIFIED ADS ...... 17 five stores last year and plans to open five more Business, a sister publication Auday Arabo, president and CEO of the this year — beginning with one in the aptly JOB FRONT ...... 16 of Crain’s Detroit Business. West Bloomfield Township-based Associated named Belleville, set to open in early April. KEITH CRAIN...... 8 The ranking was based on Food & Petroleum Dealers, said he has discussed By the end of the year, four other Belle Tire LETTERS...... 8 the number of retail stores iLottery concerns with Lottery Commissioner locations are scheduled to open in Lapeer, operated. M. Scott Bowen and other lottery officials. OPINION ...... 8 Grand Blanc, Port Huron and the Grand Rapids Belle Tire ranked No. 15 “They say you won’t lose your regular play- OTHER VOICES ...... 8 suburb of Greenville, creating about 125 jobs. in terms of revenue, with es- er” and that iLottery will attract a “younger, “We’ve always said if you’re not growing, Barnes PEOPLE ...... 16 timated 2011 replacement- hipper-type demographic,” Arabo said. But you’re dying,” said Don Barnes III, vice presi- RUMBLINGS ...... 22 tire sales of $250 million. The list includes big- he’s not convinced. dent-retail operations for Belle Tire. WEEK ON THE WEB ...... 22 box retailers that provide tire replacement. “From a retail standpoint … every cus- “We’re investing in the renovations because we want to deliver a better experience for our See Belle Tire, Page 19 See Lottery, Page 17

Business events Getting to work THIS WEEK @ During any given week, useful events tailored to business People on the move, job postings and other are held throughout the region. See what’s happening at career information can be found at Crain’s Job WWW.CRAINSDETROIT.COM crainsdetroit.com/section/events. Front at crainsdetroit.com/jobfront. 20130225-NEWS--0004-NAT-CCI-CD_-- 2/22/2013 4:56 PM Page 1

Page 4 CRAIN’S DETROIT BUSINESS February 25, 2013 As Tigers roar on field, Fox Sports wields clout with TV ad rate hikes BY BILL SHEA CRAIN’S DETROIT BUSINESS Tigers raise ticket prices for most seats Fans watched the American The Detroit Tigers were the 2012 circle. Last year, the cheapest 81- League champion Detroit Tigers in American League champions and game plan was $1,053 for a bleach- record numbers last season on Fox have a franchise-record $148.2 mil- er seat and the most expensive Sports Detroit, and the regional ca- lion in player salaries this season, was $5,751 for spots near the on- ble network is capitalizing on that and that’s having a predictable re- deck circles. thirst this year with double-digit sult: Price increases for tickets, The team also acknowledged advertising rate increases. suites and sponsorships. without disclosing details that it’s “We’re asking for it, and getting The middle-market team, try- also charging more for suites and very large rate increases,” said Greg ing to repeat as American League new corporate sponsorship deals. Hammaren, the Southfield-based champions with a big-market The cost of food, beverages and network’s senior vice president. “I payroll, has increased single- merchandise are set by the haven’t seen this sort of year-over- game and season ticket prices for Tigers’ concessions and retail year rate increase in my career. all but a handful of seats at Com- provider, Buffalo, N.Y.-based There is tremendous demand in erica Park for 2013. A small num- Sportservice. every (advertising) category.” ber of the seats at the top of the The Tigers, who draw much of In some cases, such as for new ballpark have been reduced. their revenue from broadcast advertisers, FSD is charging up to Gone is the $5 ticket that was rights deals rather than tickets, 25 percent more for a 30-second billed for the past several years as attracted more than 3 million spot than it did a year ago, accord- a cheap way for cost-conscious fans last season, ninth-best in ing to a person familiar with the families to enjoy games. The baseball in 2012 and the third-best rates who spoke on the condition cheapest seat is now $12. attendance in team history. The of anonymity. New this year is a three-tiered all-time Tigers attendance record Television industry metrics pricing system for value, regular was 3.2 million in 2008. show a new advertiser would be and premium games, which are The team won’t have a handle charged a base rate of $610 per dictated by the popularity of the on season ticket sales until closer Changing the odds household rating point in the De- opponent and time of the season. to Opening Day in April. Last troit market for a 30-second spot in The least-expensive full-season year, it sold 22,000 full-season the evening time slot when Tigers ticket plan is $1,041 for an Upper tickets, up from slightly more in our clients’ favor games typically are broadcast. Reserved seat, while the priciest than 15,000 in 2011. Based on FSD’s 9.8 rating for is $6,051 for one near the on-deck — Bill Shea Tigers games last season, the charge would be $5,978 for an adver- a product of a three-fold equation: Fans tend not to DVR sporting tiser. Because FSD reaches a wide distribution of the telecasts, events nearly as much because statewide audience, that figure in the quality of Fox’s production of they want to see the games live and many cases is a bit more expensive. the games and the team’s on-field thus are exposed to commercials. Bulk and longtime advertisers performance. “While the rate increase might typically negotiate discounts that The last element is the only one look steep, as we’ve seen with drive down that cost, Hammaren out of the network’s control, but it nearly all sports programming, said. He declined to discuss finan- hasn’t been an issue. The team has live events are really the last bas- cial specifics. invested in elite players and ap- tion for advertisers where they FSD has about 150 advertisers peared in two World Series since have a captive audience,” said for the Tigers’ season, Hammaren 2006, including last season against Maury Brown, president of the said. He was unable to say how the San Francisco Giants. Portland, Ore.-based Business of many are new for 2013. That has fans tuning in. Sports Network, which includes a

Securities fraud and shareholder rights The network will broadcast 152 “When all three of those things website devoted to the business Automotive supplier disputes Shareholder and partnership disputes of the team’s 162 regular-season are working well, you get big rat- side of baseball. Commercial and business lawsuits Family law and probate litigation games this year, with the remain- ings. The Tigers are certainly do- “Given the performance of the der airing on national channels. ing their part. The on-field prod- Tigers — both on the field and in FSD has sold 80 percent of its ad- uct is just tremendous,” television ratings — it should 248-841-2200 vertising inventory for the season Hammaren said. come as no surprise.” millerlawpc.com at this point, which puts the net- The network has done its part Regional sports networks typi- work slightly ahead of last year, on audience reach: There are few- cally make the bulk of their rev- Hammaren said. er than 2,000 households out of the enue not from advertising but “We could be sold out today. We 3.2 million in Michigan that don’t from the fees they charge broad- choose not to be,” he said. That’s have Fox Sports Detroit, he said. casters to carry the live games. because the network wants to save Hammaren said the network has In the case of Fox Sports Detroit, air time for advertisers who want deals with “hundreds of cable that fee was $2.86 per average sub- to be only in the second half of the providers” across the state. “For scriber per month in 2012, accord- season, and those who have not yet every Comcast and DirecTV, there are ing to SNL Kagan data. That fee is made their ad-buy decisions. a hundred mom-and-pops,” he said. passed from the provider, such as “We need to manage the de- That reach and those ratings Comcast, onto its subscribers. mand,” he said. should boost FSD’s bottom line in FSD doesn’t share its advertis- The network set a viewership 2013. ing or subscription revenue with record for its 148 Tigers game The network was expected to see broadcasts in 2012, thanks to a 41 its operating revenue increase to the Tigers. Instead, the network percent ratings increase com- $136 million in 2012 from $119 mil- has a long-term broadcast rights pared with 2011. lion in 2011, according to New deal that pays the team about $50 The games last season averaged York City-based research firm SNL million annually. a 9.21 rating, a record for FSD and Kagan. The network has aired Tigers based on data from New York City- FSD, which increased its pro- games since 1998, when it won the based audience tracker The Nielsen gramming expenses last year to broadcast rights from the now- Co. $99 million from $87 million two defunct Pro-Am Sports System, That led all of Major League Base- years ago, ranked 21st in operating owned at the time by the Washing- ball in local TV ratings, and was revenue out of the 36 regional ton Post Co.’s Post-Newsweek Sta- about 170,000 households tuning sports networks tracked by SNL tions Inc. in, on average per game, in the De- Kagan. Despite the revenue boost, there troit area. It also was nearly a 41 Cable sports deals are attractive is no discussion of a new or rene- percent increase over FSD’s 2011 to networks because they can still gotiated deal, Hammaren said. ratings average. charge a premium for advertising, “Both the Tigers and Fox Sports The old record for FSD’s Tigers whereas regular broadcast, cable are happy with the relationship,” telecasts was 7.54 in 2007, the year and satellite shows suffer from he said. after the team’s unexpected World more viewers recording them on Bill Shea: (313) 446-1626, Series trip. DVRs and fast-forwarding through [email protected]. Twitter: Hammaren said the ratings are commercials. @bill_shea19 DBpageAD_DBpageAD.qxd 2/7/2013 9:30 AM Page 1

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February 25, 2013 CRAIN’S DETROIT BUSINESS Page 7 Investing in city key to Henry Ford success, honoree Schlichting says

BY JAY GREENE porate headquarters and quantify Schlichting decided to take the No. After losing $87 million in CRAIN’S DETROIT BUSINESS merger savings. 2 job at Henry Ford, said Crain. 2001, Henry Ford has banked an “It is a privilege and an honor to Some other Henry Ford high- aggregate $570.7 million in net in- Nancy Schlichting believes. work with Beaumont and their lights include: come and increased its net assets As CEO of Detroit-based Henry great leaders,” Schlichting said of Winning the 2011 Malcolm by 55 percent to $1.36 billion in Ford Health System, Crain’s News- the blockbuster merger that would Baldrige National Quality Award, 2011 from $877 million in 2001. maker of the Year for 2012 said she create a 10-hospital, $6.4 billion the nation’s highest quality award Jay Greene: (313) 446-0325, believes the seven-hospital system system with 40 percent market for innovation, improvement and [email protected]. Twitter: @jay- can grow in a shrinking health share in Southeast Michigan. visionary leadership. greene care market, that her talented em- Schlichting also said she be- ployees are the keys to success and lieved she could hire an executive that Detroit can turn itself back with the luxury hotel chain Ritz- into a vital city. Carlton to run Henry Ford’s new “If we had not invested in De- $360 million hospital in West SMALL OFFICE troit, we would have failed” as a Bloomfield. health system, Schlichting said. “Everyone thought I was crazy HOME OFFICE “This is true for everyone. If to hire Gerard Van Grinsven” in Detroit does not succeed,” nor will 2008, Schlichting said. “He has Michigan’s Best Selection For Small Michigan. Professional Office or Home Office Schlichting, who was honored made me look good.” Thursday at the Crain’s Newsmak- But 15 years ago when Schlicht-  ing, 58, came to Southeast Michi- Free Design Assistance er luncheon attended by more than  500 people, also said she believes gan from Ohio, the city of Detroit Customization - Sizes & Finishes you can collaborate — even with and Henry Ford Health System  Professional Installation competitors. AARON ECKELS were down in the dumps.  Contemporary or Traditional Henry Ford Health System CEO Nancy “Mike Duggan (former CEO of “The culture of (Henry Ford Schlichting addresses the crowd after Health System) was ‘a thousand Detroit Medical Center) once said he being honored Crain’s Newsmaker of finally found a way to beat me — the Year for 2012. points of veto,’ ” she said. “This DMC has more holiday lights,” was not great for change and said Schlichting, adding, “I bought that big of a deal,” she said. “Pam progress. Our culture now is no him another string.” and our kids now call me ‘The blame, no excuses, no more vic- Duggan, expected to soon an- Newsmaker.’ ” tims, find solutions.” Keith Crain, chairman of Crain nounce his candidacy for mayor, On the pending merger with FEATURING said in a taped tribute video at the Beaumont Health System, Schlicht- Communications Inc. and editor-in- luncheon at Ford Field, “Nancy is ing said talks are going well and a chief of Crain’s Detroit Business, polite, kind … and a killer.” definitive agreement is likely to be said Henry Ford Health System 6287+),(/'ō752< But back at home in Bloomfield reached by mid-May. It is expected has made a great impact on the 129,ō/$.(6,'( Township, Schlichting said she is the newly merged system will an- community in its 98-year history. *5$1'5$3,'6 known as “The Newsmaker.” nounced a new corporate name, “It was lucky for Henry Ford www.gormans.com “At home, they don’t think it is identify the location for joint cor- and lucky for Detroit” that jesper_D

How the Rossiters are making heart procedures at Beaumont the best in the world.

Behind all the latest innovations in heart care at Beaumont are some very special people like Pam and Bob Rossiter. Community and business leaders who inspire us by their commitment to help people they’ll never meet. Because of their generosity, our cardiovascular physicians and surgeons will have a state-of-the-art cardiac catheterization suite for the diagnosis and treatment of heart problems. This facility will be equipped with advanced imaging to allow our specialists to identify plaque in arteries more precisely than ever before. Mr. Rossiter explained, “Pam and I wanted to help Beaumont and the community. Without investments like these, we can’t keep pace with others. I want the best care available right here in Michigan.” We couldn’t agree more. All of us at Beaumont are grateful for the philanthropy of families like the Rossiters. And they remind us that it doesn’t take a medical degree to improve patient care. All it takes is a heart.

A Not-for-Profit Provider 20130225-NEWS--0008-NAT-CCI-CD_-- 2/22/2013 5:40 PM Page 1

Page 8 CRAIN’S DETROIT BUSINESS February 25, 2013 OPINION OTHER VOICES No-fault reform: Offer voters mayor-council slate

The Detroit City Coun- council candidates. to the state and overhauling the cil has been a do-nothing Since approving the Water and Sewerage Department. body since approving a consent agreement last A mayor’s plans for Detroit will No data, no deal consent agreement with April, City Council has be dead on arrival if he or she does the state last year. stymied numerous re- not have enough allies on City dvocates for maintaining unlimited medical care for On almost every key forms. In August, council Council. Similar to a president those injured in Michigan traffic accidents got a pow- matter before it, the coun- rejected a proposal to put campaigning for congressional erful ally last week: Oakland County Executive L. cil has given in to the vo- a millage on the ballot hopefuls, mayoral contenders A cal protesters who attend that would have paid for should form tickets with council Brooks Patterson denounced proposed changes to the state’s its meetings. Council’s more police officers. candidates that share their legisla- no-fault auto insurance law that would cap medical expenses bickering maintenance of Council members cited a tive agenda. now paid by the Michigan Catastrophic Claims Association. the status quo hinders the David Russell report from the city’s Law work of Detroit’s entrepreneurs Detroit needs a mayor and City Still recovering from his own traumatic auto collision last Department that said the city and cultural institutions to create Council that will work together to year, Patterson knows his driver and friend remains para- could lose some money from state a better reality and public image enact necessary reforms without lyzed and benefits from uncapped care. Patterson also main- revenue sharing if the millage for the city. getting bogged down in delays and tains that changing the insurance terms would cost jobs in his In this year’s elections, may- passed. This contrasted with coun- embarrassing public spats. This county and around the state. oral candidates should explain cil’s actions in November, when it year, mayoral candidates should We have suggested in the past that a cap could be sensible. their vision for the city and cam- jeopardized $30 million in bond pick their City Council running But we also believe the catastrophic fund – created by fees paid paign with council candidates proceeds by delaying the approval mates and present voters with the by insured motorists – should be transparent. Public release of who will be productive and sup- of a $300,000 contract with law firm opportunity to elect a unified gov- Miller Canfield. ernment that will lead Detroit. claims data, including actuarial assumptions, is tied up in port their agenda. Detroit voters The council has blocked other David Russell is a writer and edi- court challenges. should have the option of choos- ing a team of united mayoral and ideas, including leasing Belle Isle tor from Commerce Township. Public release of that data should be reviewed before any changes in the no-fault law are considered. Biz Leaders, check membership Last week, more than 550 people honored Henry Ford LETTERS Health System CEO Nancy Schlichting as Crain’s 2012 News- maker of the Year. As we report on Page 7, Schlichting offered powerful advice to leaders wanting to drive cultural change and improve re- Reasons why PA 4 is so bad sults for their company or organization. That’s the legacy of her tenure at Henry Ford — transforming a culture of “1,000 Editor: The EFM laws fit nicely with the Crain’s Detroit Business points of veto” to generate increases in market share, a string “Remind me again why Public modern Republican agenda to welcomes letters to the editor. Act 4 was so bad?” Mary Kramer change laws to retain control of all of profitable years, the awarding of the Malcolm Baldrige Na- All letters will be considered for levels of government. Restricting tional Quality Award for 2011 and the pending merger with wrote about the Pontiac EFM in publication, provided they are Beaumont Health System. your Feb. 4 column (“Pontiac EM’s signed and do not defame voter access, changing the elec- impact noteworthy”). toral college to tabulate by gerry- Schlichting, who chairs the board of the Detroit Regional individuals or organizations. Please allow me to do so. We live mandered districts instead of by Chamber in 2012-13, believes health care executives should be Letters may be edited for length in America, where we, the people, and clarity. popular vote, “right to work” to de- among the leadership of major business and civic organizations. elect our representatives. We still Write: Editor, Crain’s Detroit fund the Democratic Party — these “I’m still flabbergasted that Business Leaders for Michigan have the right to vote for our lead- Business, 1155 Gratiot Ave., are desperate measures reminis- does not have a health care leader on that board,” she told ership, no matter how incompe- Detroit, MI 48207-2997. cent of the apartheid era of South Africa. Crain’s in a recent interview. “To ignore leaders who have an tent that leadership may be. Email: [email protected] impact in a community is wrong. I go to Walgreen’s, the 32nd- Whose idea was it to establish The bullying of Gov. Snyder by the Koch brothers and Dick DeVos largest company in the country, and they value my input. But PA 4? It was done with disregard to sign “right to work” or face an not Business Leaders for Michigan.” for the democratic process, the un- Lost in the fear of the tea party spoken truth being that people movement has been the notion, over-funded primary nut job chal- Doug Rothwell, CEO of the statewide council of CEOs, de- lenger calls to mind the intimida- cannot vote for their own repre- however quaint, that the purpose fends the inclusion of for-profit CEOs and just four nonprofit tion of eastern Europe by the Sovi- sentatives, no matter how good the of government is to see that the et Union. leaders — university presidents and the CEO of Blue Cross, books look. needs of its citizens are addressed. Instead of cheering them on, the who were “grandfathered” in from the group’s days as Detroit How did government entities re- Government is established by the news media should be calling the Renaissance Inc. He adds: “Nancy is a terrific leader, and we solve financial problems before people, for the people. Not by the GOP out for its heavy-handed des- have a great deal of respect for her and her work.” PA 4 and other measures like it? banks, for the banks. Who are the peration. What was so wrong with those unmentioned losers in the bright Yet if Business Leaders is all about reinventing the state Frank Rizzo and its economy, maybe it should be more progressive on its remedies that the democratic story of Pontiac balancing its UAW 1264 member process needs to be circumvented? membership policies, too. books? Sterling Heights KEITH CRAIN: But what about the people of Detroit? I have no doubt that something But everyone seems to the best thing they could not changed. Poverty will still exist. economically, we have to have not is about to happen with the gover- be missing another big get is a job. It is time for the business commu- only a functioning political system nance of Detroit that will set the fi- challenge. What about When all this is said nity to start thinking about an eco- but a vibrant economy, as well. nancial system and political sys- the people who live in and done, we will have nomic solution to our problems. Fixing the political system and tem back on the right track. the city? Detroit has a a city that works. The That is something that bankruptcy all the pieces of this government No one, probably not even the huge unemployment streetlights will be on or an EM won’t be able to solve. unit are without a doubt our No. 1 governor, has any idea what form of problem. The number of and permits will be is- We can only hope that the exis- priority. But it is only the first step. repair it will take. Whether the city folks who don’t have a sued. The police and tence of an efficient, workable gov- If we expect to have a strong files for bankruptcy, has an emer- job is simply staggering. fire departments will be ernment will encourage economic economy, it will not happen by gency manager appointed by the The number of residents functioning efficiently. development in Southeast Michi- simply waving a magic wand over governor or some other sort of rem- who are living on some But the economy will gan. The malaise of Detroit has to the government. edy is pure speculation at this time. sort of government assis- still be horrible, and all affect all of Southeast Michigan This will be only the beginning. But we will know shortly what’s go- tance is huge. Whether the talk of fixing the and all its communities. You can- And this is when the business com- ing to happen to the political system it’s city, county, state or federal aid, city only deals with the problem of not have a healthy community munity has to start getting in- and how it will be fixed. a lot of money and help is being giv- the city government. without having a healthy core. For volved — right now. Or it will all That is a critical first step. en to the residents of Detroit, when The unemployment rate will have Southeast Michigan to prosper be for naught. 20130225-NEWS--0009-NAT-CCI-CD_-- 2/22/2013 11:47 AM Page 1

February 25, 2013 CRAIN’S DETROIT BUSINESS Page 9 State’s bumpiest CRAIN'S LIST: OFFICE LEASES Ranked by square feet Rank Building Owner, owner city Tenant Broker Square feet 1. First National Building, Detroit Rock Ventures LLC, Title Source Inc. Bedrock Real Estate Services 305,000 road? Route to Detroit Chrysler House, Detroit Rock Ventures LLC, Quicken Loans Inc. Bedrock Real Estate Services 167,000 2. Detroit 3. United Shore Financial Sure Holdings LLC, United Shore Financial Core Partners LLC 110,000 Center, Troy Birmingham Services LLC funding repairs Westminster Troy LLC, Valeo Inc. CBRE Group Inc. 103,253 4. 150 Stephenson Highway, Troy Bingham Farms It took all and tear it apart, because it’s go- 5. 19975 Victor Parkway, Smith Equities Corp., Valassis DTZ, a UGL company; and 100,597 of about a ing to be harder to put this whole Livonia B Mount Pleasant Communications Inc. Hinman Co. week after Capitol thing back together when it’s Gov. Rick done if we don’t,” he said. Northville Park Place, REIS (REI and Schostak University of Michigan 100,000 Briefings 6. Northville Township Brothers & Co.), Ambulatory Care Snyder began Richardville has reservations Bloomfield Hills pushing his about any tax increases but ulti- Stoneridge I, Bloomfield Hills B Kojaian Management Butzel Long PC 89,745 idea to in- mately wants to solve the prob- 7. Corp., Bloomfield Hills crease gas lem and not leave it for someone Lehman Brothers Quicken Loans Inc. Bedrock Real Estate Services 83,870 taxes and reg- 27555 Farmington Road, else to solve later, as the roads 8. Farmington Hills Holding Corp., New istration fees and bridges in this state are al- York to raise $1.2 ready in bad shape and will only 9. 37101 Corporate Drive, Lexington Realty Trust, Panasonic Automotive Jones Lang LaSalle and Mohr 82,886 billion annu- get worse. Farmington Hills New York Electronics Co. Partners Inc. ally for infra- Chris Gautz “We can give and take if we 10. 3550 Green Road, Ann Arbor B GE Capital, Fairfield, Black & Veatch Corp. Jones Lang LaSalle 82,003 structure im- keep our doors open to every- Conn. provements thing,” Richardville said. before his fellow Republicans be- One Detroit Center, Detroit iStar Financial Inc., Quicken Loans Inc. Bedrock Real Estate Services 74,000 Sitting on the dais with 11. New York and Signature Associates Inc. gan dissing it. Richardville and Greimel, House A combination of anti-tax-in- 21700 Telegraph Road, Syms Corp., Secaucus, Lear Corp. CBRE Group Inc. 71,132 Speaker Jase Bolger, R-Marshall, 12. crease ideology and irritated con- Southfield New Jersey stated the obvious: “You’re seeing stituents who think they already One Detroit Center, Detroit iStar Financial Inc., PricewaterhouseCoopers Signature Associates Inc. and 70,184 pay too much at the pump — and how difficult this is going to be.” 13. New York LLP CBRE Group Inc. on their birthdays when they re- Richardville remains confident that legislators can reach a deal 800 Tower, Troy Rialto Capital Quicken Loans Inc. Bedrock Real Estate Services 67,000 new their tabs — caused key Re- 14. Management LLC, and Friedman Integrated Real publicans to begin to walk away by the Fourth of July. Miami Estate Solutions But whatever the deal they from Snyder’s proposal. 15. Troy Officentre, Troy Osprey Management Dialogue Marketing Inc. Friedman Integrated Real 64,484 Senate Majority Leader Randy come up with, all agree it will Co., Brighton Estate Solutions Richardville, R-Monroe, said he have to be bipartisan, because Troy Officentre, Troy Osprey Management FVA Ventures Inc., dba Friedman Integrated Real 63,356 wasn’t on board with the plan. there aren’t enough Republicans 16. Co., Brighton ViSalus Sciences Estate Solutions And Secretary of State Ruth John- to pass it on their own. And if that deal includes tax in- 900 Tower Drive, Troy Kojaian Management Plex Systems Inc. L. Mason Capitani Inc. and 62,116 son said she wasn’t supportive of 17. Corp., Bloomfield Hills Skyline Properties LLC the increases in registration fees. creases of any kind, it probably While those positions were will lose support from the most City Center, Troy B 888 W. Big Beaver LLC, New World Systems Redico LLC 56,875 18. Southfield Corp. somewhat expected, it doesn’t conservative of Republicans and the most vulnerable of Democrats mean a deal to find the additional 985 W. Entrance Drive, NorthStar Realty Faurecia USA Holdings CBRE Group Inc. and 55,692 revenue is dead. It’s just going to concerned about their next elec- 19. Auburn Hills Finance Corp., New Inc. Colliers International York come in a different way from tion. what Snyder proposed. Democrats are not ready to Northeast Plaza, Ann Arbor C CW Capital Cole Taylor Mortgage McKinley Inc. 54,265 20. Management, But with nearly everyone still jump in to support the plan to Needham, Mass. focused on actually getting a deal raise revenue for the roads — 2600 Green Road, Ann Arbor B CW Capital University of Michigan Jones Lang LaSalle 54,265 done, it didn’t take long before and not just because their con- 20. Management, Richardville was doling out ad- stituents tell them they are al- Needham, Mass. vice to his fellow legislative lead- ready paying too much and can’t 5225 Auto Club Drive, Investment group led by Xerox Corp. Jones Lang LaSalle 53,000 ers that ran contrary to his own afford it. It’s because they know 22. Dearborn B Stephan Cubba, St. Clair Shores recent statements. that even though this is a Repub- lican governor pushing this tax One Kennedy Square, Detroit B Redico LLC, Southfield Walbridge Aldinger Co. Advocate Commercial Real 51,402 While speaking at the Michigan 23. Estate Advisors of Michigan Society of Association Executives increase, if they as Democrats LLC and Redico LLC legislative and public policy con- vote for it, they will be attacked in 6555 15 Mile Road, Sterling Charrington Estates Macomb County Signature Associates Inc. and 49,642 ference last week, Richardville the next campaigns by their Re- 24. Heights LLC, Troy Community Mental L. Mason Capitani Inc. chastised House Minority Leader publican opponents for being tax- Health Tim Greimel for doing what and-spend liberals. 2751 E. Jefferson Ave., 2751-2761 Jefferson Wayne State University NAI Farbman 48,387 And so you can count on De- 25. Detroit B Avenue Holdings LLC, Richardville had done just the Detroit week before. mocrats this time around going Greimel, D-Auburn Hills, said on the offensive and going after Oak Hollow Corp. Campus, LNR Property Corp., Lafarge North America Kirco Management Services 47,687 26. B Miami Inc. LLC and Jones Lang LaSalle he thinks paying for road im- any Republicans who vote for a Southfield provements by increasing the gas tax increase. And they will 27. 1200 Harmon Road, Auburn Harmon Road Ventures Teijin Advanced Signature Associates Inc. and 47,460 sales tax is the wrong approach make the case that it’s just anoth- Hills LLC, Ferndale Composites America Inc. CBRE Group Inc. and that he also has concerns er in a long line of taxes that the 28. 36501 Van Born Road, Ashley Capital LLC, Michigan Portable Colliers International Inc. 47,324 about asking voters to approve a GOP have raised on middle-class Romulus Canton Township Storage LLC proposal rather than have law- families in the past two years as Travelers Tower I, Southfield Lehman Bros. Holding Faurecia Interior Systems Newmark Grubb Knight 47,250 makers decide themselves. they have eliminated popular tax 29. Co., New York Frank; Colliers International Richardville said lawmakers deductions and credits. Inc. and Redico LLC should be careful about dismiss- Bolger is right — this is going 30. 15600 19 Mile Road, Clinton Macomb Edison The Detroit Edison Co. CBRE Group Inc. and Lee & 46,500 ing any one option as they debate to be difficult. Township Associates LLC, Troy Associates of Michigan LLC how to raise this revenue. Chris Gautz: (517) 403-4403, Livonia - IT Office Building, Northern Equities Infineon Technologies Friedman Integrated Real 46,297 “Wait until you see a final pro- [email protected]. Twitter: 31. Livonia Group, Farmington North America Corp. Estate Solutions Hills posal before you take pieces of it @chrisgautz 28875 Cabot Drive, Novi The Timken Corp., Robert Bosch LLC Signature Associates Inc. 44,685 32. Novi 33. 400 W. Fourth St., Royal Oak PNC Bank, Pittsburgh, RTT USA Inc. CBRE Group Inc. 42,820 ANKRUPTCIES Penn. B 34. Pantech Building, Southfield Pantech LLC, CBS Broadcasting Inc. CBRE Group Inc. 40,980 The following businesses filed for 1450 W. Long Lake Road, Suite Bloomfield Hills Chapter 11 or Chapter 7 protec- 150, Troy. Assets and liabilities 19675 W. 10 Mile Road, Carter Validus Mission Level 3 Communications Jones Lang LaSalle 39,357 tion in U.S. Bankruptcy Court in De- not available. 35. Southfield B Critical REIT Inc., LLC Tampa, Fla. troit Feb. 15-21. Under Chapter NGPCP/BRYS Centre LLC, 27172 11, a company files for reorgani- Woodward Ave., Suite 150, Royal List is based on information from CoStar Group Inc., CPIX, Crain's research, from published information or as submitted by brokers, advisers or Oak, voluntary Chapter 11. property owners. Crain's has tried to list all brokers involved in a transaction, but in some cases brokers may have been omitted. Some leases were zation. Chapter 7 involves total Weir & Weir LLC, 57774 Cider, omitted because of a lack of complete information. liquidation. Washington Township, volun- B Lease renewal. Leonard & Co. Inc., voluntary tary Chapter 11. Assets and liabil- C Expansion. Chapter 11; Leonard-French Hold- ities not available. LIST RESEARCHED BY DANIEL DUGGAN AND KIRK PINHO ings Inc., voluntary Chapter 7, — Ryan Felton 20130225-NEWS--0010-NAT-CCI-CD_-- 2/22/2013 11:38 AM Page 1

Page 10 CRAIN’S DETROIT BUSINESS February 25, 2013

CALENDAR Have a specific need? TUESDAY FEB. 26 LEADERS DISCUSS MICHIGAN Our candidates have specific training. Business Connections: How to Find ECONOMIC PROGRESS High-Quality Customers in a Changing Business Leaders for Michigan Economy. 7:30-9 a.m. Michigan Works. hosts The New Michigan Summit Oakland County, Michigan Workforce 8 a.m.-1 p.m. March 11 at the Development Agency, Veterans’ Ser- Radisson Hotel, Lansing. vices Division, HR Solutions Group. Learn strategies for attracting cus- Panel discussions will focus on tomers and building brand loyalty. Michigan as a natural resources With Steven Lover, director of Strategic economy, global center of mobility, Shifts business coaching and training. global engineering village, gateway JVS, Southfield. Free. Contact: Liz Ri- to the Midwest, higher education vard, (248) 233-4481; email: erivard@jvs- marketplace and life sciences hub. det.org; website: jvsdet.org. Speakers include Doug Rothwell, chairman, Michigan Economic Development Corp. executive WEDNESDAY committee, and president and FEB. 27 CEO, Business Leaders for Michigan; Sandy Baruah, president Hire and Keep That Elusive “Ideal” Em- and CEO, Detroit Regional ployee. 11:30 a.m.-1 p.m. Automation Chamber; and others. Alley. Automation Alley headquar- ters, Troy. $30 members at the door; The event is free. For information, Business Computers HealthEngineering/Technology Education & Human Services $50 nonmembers at the door. Contact: call Jennifer Hayes at (313) 259- (800) 427-5100; email: info@automa 5400, email jenniferh@business tionalley.com; website: www.automa leadersformichigan.com, or visit When you have a position to fill, you want someone who’s qualified and ready to hit tionalley.com. www.businessleadersformichigan. the ground running. Baker College’s HireQualified® can help. Our candidates are highly com/events. trained in very specific areas by instructors who are working professionals. They know Detroit Economic Club Luncheon. what’s needed in their industries and teach practical experience over theory. The service 11:30 a.m.-1:30 p.m. With Mark Bertoli- ness Solutions, $40 each; 5:30-7:30 p.m. networking reception at Comerica — ni, chairman, CEO and president of is free the result is just the person you are looking for. Aetna Inc. The Westin Southfield. $45 Bank downtown Detroit, free. Con- tact: Tenay Hankins, (313) 961-1141; To learn more about how we can help you find the best candidate for your needs, or to members, $55 guests of members, $75 nonmembers. Contact: (313) 963-8547; email: [email protected]; website: schedule a meeting at your place of business, visit HireQualified.com. email: [email protected]; web- www.jointcities.org. site: www.econclub.org. The Garden Fresh Gourmet Story. 6-8 Creating Contracts Not Just Contacts p.m. American Marketing Associa- Free recruiting services from III: Think and Stay in the Black. 11:30 tion Detroit. With Dave Zilko, vice HireQualified.com America’s leading career college. a.m.-7:30 p.m. Comerica Bank, Reeves chairman, Garden Fresh Gourmet. Business Solutions, Joint Cities De- Schoolcraft College-VisTaTech Cen- X6405HQ velopment, Detroit Black Chamber of ter, Livonia. $35 members, $45 non- Commerce. Focus on entrepreneurial members, $20 students. Contact: training. Workshops at Reeves Busi- Dawnaree Demrose, (248) 622-8247; email: [email protected]; web- site: www.cvent.com/d/ccqr2x/1Q. THURSDAY FEB. 28 ESTATE PLANNING AFTER THE 2013 Detroit Policy Conference. De- troit Regional Chamber. 8 a.m.-4 p.m. With Detroit Mayor Dave Bing; Matt Cullen, president and CEO of Rock Ventures LLC; Richard Florida, direc- tor of the Martin Prosperity Institute at the University of Toronto; and others. $75 DRC members, $125 nonmembers. MotorCity Casino Hotel, Detroit. Con- tact: Beverly Maddox, (313) 596-0343; CLIFF email: [email protected]; FISCAL website: www.detroitchamber.com. FREE The Curve Report. 6-9 p.m. Adcraft Attend one of these seminars and you will find out… Club of Detroit. NBCUniversal Inte- grated Media’s highlights from its bi- ■ ■ yearly book on trends and insights in How to avoid a probate estate How the new Estate Tax Law affects consumer culture. Fleming’s Prime Steakhouse & Wine Bar, Birmingham. ■ How to simplify current plans estate plans Free. Registration required. Contact: Clarence Young, (313) 872-7850, ext. 3#; ■ email: [email protected]; website: based on new laws How to protect and preserve children’s inheritance www.adcraft.org.

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Detroit Economic Club Luncheon. 11:30 a.m.-1:30 p.m. March 14. Detroit Economic Club. With Stuart Hoffman, senior vice president and chief econo- mist, PNC Financial Services Group. Westin Book Cadillac, Detroit. $45 members, $55 guests of members, $75 ■ Metro Detroit ■ Grand Rapids ■ Kalamazoo ■ Grand Haven ■ Lansing nonmembers. Contact: (313) 963-8547; email: [email protected]; web- site: www.econclub.org. 20130225-NEWS--0011-NAT-CCI-CD_-- 2/22/2013 11:49 AM Page 1

February 25, 2013 CRAIN’S DETROIT BUSINESS Page 11

REPORTER’S NOTEBOOK

Chad Halcom covers litigation, higher education, defense and Oakland and Macomb counties. Call (313) 446-6796 or write chalcom @crain.com. law Chad Halcom Investor slices settlement pie One of the largest court judgments of Big cases of 2012 last year was the offspring of another standout court case from a past year — but eight women who were part of a $100 million settlement in 2009 are now expected to turn over much of Top verdicts and settlements, from price fixing to asset disputes their share to an investor. New York-based Money for Lawsuits V ach year, Crain’s Detroit Business supply chain price-fixing (see Page 1) LP, a company that invests in lawsuits combs its archives and talks to law to “cyber squatting” and medical mal- by buying a stake in plaintiffs’ E firms and other sources to compile practice. prospective winnings while the litigation is pending, obtained a a review of some of the biggest cases. Stories begin on this page and con- combined $4.2 million in judgments The cases range from automotive tinue through Page 15. by late last year against eight women who prevailed against the Michigan Department of Corrections and several administrators over assaults on and About the case The settlement calls for policyholders to get mistreatment of women prisoners. Homeowners insurance new payments, ranging from a 2.5 percent More than 500 women are sharing More than 10,000 insured residential prop- bump in the original claim payment for some, structured payments totaling $100 erty owners in 38 states could get a com- to as much as 20 percent of the differential be- million through October 2014 to settle RONALD CARTER, JOSE JIMENEZ ET AL V. ALLSTATE bined payout of at least $22.5 million by late tween that payment and the policy limit (or the class action lawsuit on behalf of spring after attorneys for Allstate Insurance the home replacement cost less depreciation) women who were victims of sexual INSURANCE CO., ALLSTATE INDEMNITY CO. Co. settled with a policyholder class repre- for others. assault, harassment or privacy rights sented by two Detroit landlords. The settlement also calls for a separate violations by prison staff between Ⅲ Venue: U.S. District Court, Detroit, Judge Ronald Carter of Detroit and Jose Jimenez payment of $5.5 million in attorney fees to March 1993 and July 2009. Most Stephen Murphy; Cook County Circuit Court, of Southfield owned homes in Detroit that Jason Thompson, shareholder at Southfield- were at the shuttered Robert Scott Chicago, Judge Kathleen Pantle were destroyed by fire in 2001 and 2006, re- based Sommers Schwartz PC, to distribute Correctional Facility in Plymouth or at spectively. Each had insurance that covered among three law firms that represented the Western Wayne Correctional Facility in Ⅲ Cases filed: Sept. 3, 2002, in Chicago; Oct. a replacement cost for the rental homes mi- plaintiff class. Plymouth Township. 22, 2007, in Detroit nus depreciation, but they allege Allstate of- Sommers Schwartz, in a statement late Money for Lawsuits, also known as Ⅲ Settlement: More than $25 million fered a payment based on “market value” — last year, said the settlement covers more MFL Casefunding, made combined than 13,000 Allstate policyholders who sus- (estimated, including attorney fees) or $35,000 and $48,000, respectively, where payments of about $865,000 to the tained covered losses, and it believes their Ⅲ Date: Sept. 13, 2012 each sought more than $100,000. women between February and June payout will exceed $22.5 million. Ⅲ Plaintiffs: Ronald Carter and Jose Jimenez, Carter sued in Cook County, Ill., where 2009, before the settlement that July. Lance Young, a partner at Sommers The company makes contingent Detroit property owners, for a class of holders Allstate is based, and Jimenez at U.S. Dis- Schwartz, said many of the smaller claims purchase agreements with plaintiffs of Allstate residential fire or landlord policies, trict Court in Detroit several years later. are paid and larger payments could be who need money in advance of who claimed a loss on homes in any of 38 Both cases were filed as potential class ac- distributed starting in March. anticipated winnings. states between tions, and the company reached an agree- — Chad Halcom David Plunkett, attorney for Money for CASE FILE September ment last summer that certified a class Lawsuits and partner at Birmingham- 1992 and May and settled both cases at once. Home Depot cards: Dispute based Williams, Williams Rattner & 2012. The property own- Plunkett PC, said the investor over sales taxes. Page 12 Kilpatrick contractor: Ⅲ Lead counsel: ers contended companies assume risk in making the Allstate engaged purchases. If the women did not win $4.5 million settles part of Jason water department suit. Page 12 in a practice for years of or their judgments didn’t survive Thompson, appeal, the investor gets no return. Adell trust: $3.25 million shareholder, substituting “actual settles pending suits, dissolves Sommers cash value” on some But prevail they did, and the lawsuit trust. Page 12 alleges all eight failed to inform the Schwartz PC, policies with market value Shareholder dispute: when paying claims. All- investor. Ralph Sirlin, an attorney for $13 million settles suit against Southfield; the women at Pleasant Ridge-based steel company execs. Michael Fabian, state, which admits no wrong- Reosti & Sirlin PC, said the women Page 13 founding doing in the settlement, had took payments of around $50,000 to Insurance benefits: State Farm shareholder, cited a “broad evidence slightly more than $100,000 each. sued over payments. Page 13 Fabian Sklar & rule” in court to con- But the agreements call for the Jailhouse birth: Suit says King PC, tend actual cash value company to be repaid from winnings pregnant inmate ignored. Farmington Hills can be calculated on when the case is over, with fees and Page 14 Ⅲ Co-counsel: various forms of evidence, in- interest of 4.25 percent compounded Car facts: Deal over Dodge cluding market value. per month or nearly 90 percent deliveries sours. Page 14 Lance Young, annualized, Sirlin said. Judge Mark Right of way: Bus crash brings shareholder, Goldsmith of U.S. District Court in lawsuit. Page 14 Sommers Detroit imposed individual judgments Way with words: Assistant Schwartz ranging from $284,145 to $812,572, attorney general liable for Ⅲ Defendants: defamation. Page 15 for a combined $4.23 million. Allstate Cyber squatting: Bad-faith use “We believe these purchases are Insurance Co., usury under Michigan law. But the of domain name. Page 15 Home strife: Mobile home Northbrook, Ill.; contracts contain a provision that Allstate requires them to be read and community co-owners battle. Indemnity Co., interpreted under New York law, which Page 15 doesn’t see them as usurious,” he South said. “When you get out of prison it Barrington, Ill. isn’t like you have a lot, and most of Ⅲ Lead counsel: Mark Hanover, partner, them were taking out living money.” Sonnenschein Nath & Rosenthal, Chicago Sirlin said the rate of return on MFL’s Ⅲ Co-counsel: Harold Pope III, shareholder, investment essentially consumes the Jaffe, Raitt, Heuer & Weiss PC, Southfield; women’s share of the settlement. The Anne Mitchell, partner, Rooney Rippie & case is now before the 6th U.S. Ratnaswamy, Chicago Circuit Court of Appeals in Cincinnati.

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Page 12 CRAIN’S DETROIT BUSINESS February 25, 2013 Focus: Law Home Depot sales tax Kilpatrick contractor HOME DEPOT USA INC. V. STATE OF MICHIGAN, DEPARTMENT OF TREASURY MACOMB INTERCEPTOR DRAIN DRAINAGE DISTRICT, CITY OF DETROIT AND DETROIT WATER AND SEWERAGE DEPARTMENT V. KWAME KILPATRICK, INLAND WATERS POLLUTION CONTROL INC. ET AL Ⅲ Venue: U.S. District Court, gan Supreme Court declined in Oc- Detroit, Judge Robert Cleland tober to hear an appeal by the Ⅲ : U.S. District Court, tractor DA” had “wanted to share Michigan Department of Treasury. Venue About the case Ⅲ Case filed: Oct. 17, 2007 Detroit, Judge Robert Cleland the work with Ferguson on a 50/50 The issue in the case was sales First named only as “Company Ⅲ Judgment: $7 million. Paid in Ⅲ Case filed: July 18, 2011 basis (and) Kilpatrick had to in- early 2013. tax paid on purchases from 1999 I” in a December 2010 federal in- Ⅲ Settlement:$4.5 million (between struct (then DWSD Director Victor) through early 2007 where holders dictment of former Detroit Mayor Ⅲ Date: May 24, 2012. Michigan Inland Waters and DWSD only) Mercado about the arrangement.” Supreme Court denied leave Oct. of the store-brand credit card lat- Kwame Kilpatrick and four co-de- Ⅲ Date: Dec. 7, 2012 Macomb in 2011 sued Inland Wa- 22. er defaulted on their payments. fendants, Detroit-based Inland Wa- Ⅲ : Macomb Interceptor ters, project subcontractor L. D’Agos- Ⅲ Plaintiff: Home Depot USA Inc. Home Depot had paid sales tax Plaintiffs ters Pollution Control Inc. soon came Drain Drainage District, a tini & Sons Inc. of Macomb Township on those purchases and later was under the spotlight for its role in Ⅲ Lead counsel: Christopher corporation of 11 Macomb County and several other subcontractors, reimbursed by its credit lenders, Nelson, shareholder, Butzel Long municipalities chaired by county the broadening public corruption Ferguson’s companies, Kilpatrick PC, Bloomfield Hills office General Electric Capital Corp. and Public Works Commissioner Anthony scandal. and others, seeking to recover $25.5 Ⅲ Co-counsel: Randy Mastro, CitiBank USA NA. The lenders then Marrocco. Intervening plaintiffs The company was briefly sus- million it alleges was added to the litigation practice group co-chair; charge fees to Home Depot based Detroit and Detroit Water and pended from contracting with the project cost. Jennifer Rearden, partner, Gibson on the bad debt. Sewerage joined in January 2012. Detroit Water Sewerage Department’s Detroit later joined Macomb in Dunn & Crutcher, New York City Home Depot sought to recoup Ⅲ Lead counsel: Jerome Watson, Board of Water Commissioners as the lawsuit, seeking damages on office the tax payments from the state, W. Mack Faison and Irene a non-responsible bidder and be- more than $20 million in profits on Ⅲ Defendants: Michigan but Treasury said that because it Hathaway, principals, Miller Canfield came a target of litigation by the three sewer projects. The settle- Department of Treasury had been reimbursed by its lenders Paddock and Stone PLC, Detroit, for department along with the Macomb ment resolves only Detroit’s Ⅲ Lead counsel: Scott Damich, at the time of purchase, it wasn’t el- the city and DWSD; Raechel Interceptor Drain Drainage District. Badalamenti, partner, Kirk Huth claims against the company; Ma- assistant attorney general igible. The company maintains In late November, Inland Waters Lange & Badalamenti PLC, Clinton comb’s legal claims against Inland that the lender fees mean Home De- along with Inland Management Inc. Township, for the drainage district are still pending. pot hasn’t been reimbursed and and Inland Pipe Rehabilitation LLC About the case Ⅲ Co-counsel: Robert Murkowski In September, Judge Robert Cle- that its contracts with its card agreed to pay $4.5 million to settle and Joseph Uhl, Miller Canfield, for land also dismissed most of the An appellate court ruling in lenders made them one unit for their portion of the department’s Detroit; Albert Addis, O’Reilly subcontractor companies on the May makes Michigan the first purposes of claiming tax benefits. Rancilio PC, Sterling Heights, for the lawsuit, and the water board re- Sterling Heights job, many of them state to side with The Home Depot The Court of Claims sided with district stored the company to responsible represented by Butzel Long PC in in a dispute over whether the Home Depot in 2009, as did the Ⅲ Defendants: Kwame Kilpatrick, bidder status. company owes sales tax on pur- Michigan Court of Appeals last Bobby Ferguson, Derrick Miller, The company was dismissed Detroit, from the Macomb dis- chases where customers defaulted May. With interest, the state had Inland Waters Pollution Control Inc., from Detroit’s portion of the law- trict’s case. on the store’s private-label credit to refund about $7 million. Detroit; L. D’Agostini & Sons Inc., suit in December, but the drainage Cleland essentially found that cards. Nelson said Home Depot has Macomb Township; Superior district portion of its case remains. when the drainage district ac- The U.S. subsidiary of the At- made the same challenge to sales Engineering Associates Inc., Inland Waters was primary con- quired the interceptor and other Southfield; Mersino Dewatering Inc., lanta-based home improvement taxes paid elsewhere. At least one tractor on a 2004-05 sinkhole repair assets from Detroit in 2010, that Davison; and 32 other individual retail giant, Home Depot USA Inc., state — Arizona — has sided did not mean it had also acquired and corporate defendants, most of project, and in 2010 the drainage received payment this year on a against the retailer, and cases in whom were later dismissed district acquired that interceptor Detroit’s rights to sue the subcon- judgment of more than $6.9 mil- other states are pending. tractors under state tort law for Ⅲ Lead counsel: Michael Jacobson, and assumed $54.5 million in debt lion with interest after the Michi- — Chad Halcom partner, Jaffe, Raitt, Heuer & Weiss from those repairs. any connection they had to alleged PC, Southfield, for Inland Waters The federal indictment claims overbilling. So the district has a Ⅲ Co-counsel: Kevin Hirsch, David contractor Bobby Ferguson of Fer- case only against Inland Waters Williams and David Poirier, Jaffe guson’s Enterprises Inc., Detroit, told for breach of contract. Kilpatrick in 2004 that a “Subcon- — Chad Halcom

Adell family trust IN THE MATTER OF FRANKLIN Z. ADELL TRUST ADELL BROADCASTING CORP. ET AL V. TRUSTEES FOR FRANKLIN Z. ADELL TRUST, LAURIE FISCHGRUND ET AL

Ⅲ Venue: Oakland County Probate About the case 2010 had violated his fiduciary du- Court, Judge Linda Hallmark; ties, and Probate Judge Linda Hall- Macomb County Circuit Court, Adell Broadcasting Corp. Presi- mark ordered him to reimburse $1.8 Judge Donald Miller. dent Kevin Adell became majority million he had obtained in pay from Ⅲ Cases filed: Sept. 19, 2008, in owner of the Clinton Township- two of his companies without the Oakland; May 4, 2010, in based media company after a $3.25 fiduciary’s consent in 2008 and 2009. Macomb million payment to his two sisters, But Adell then filed a lawsuit in Ⅲ Settlement: $3.25 million (to Julie Verona and Laurie Fis- Macomb County against his sis- defendants Laurie Fischgrund and chgrund, settled two pending law- ters and the trustees appointed by Julie Verona) suits and dissolved the trust of the court, alleging they were inter- Ⅲ Date: Feb. 22, 2012 their late father. fering with his contracts and busi- Ⅲ Plaintiffs: Adell Broadcasting Adell became trustee to his fa- ness relationships. Corp., Clinton Township; STN.com ther’s trust shortly after his death The Michigan Court of Appeals in Inc., Southfield in 2006. Its assets were estimated to early 2012 upheld a lower court Ⅲ Lead counsel: Thomas Van be worth about $24.6 million, and finding that Adell’s lawsuit was Dusen, member, Bodman PLC, his sisters were co-beneficiaries. frivolous and the Macomb court Detroit The trust was 80 percent owner did not have jurisdiction — but it Ⅲ Co-counsel: Michael Schwartz, of Adell Broadcasting, which oper- also found he should have due former general counsel, Adell ates WADL TV-38 in Clinton Town- process rights to appear and argue Broadcasting ship and The Word Network, the against a court order of sanctions. Ⅲ Defendants: Franklin Z. Adell Southfield-based religious pro- Instead, the Adell siblings Trust, Estate of Franklin Adell, gramming network of which Adell reached an agreement in February trustees David Gorcyca and Joseph is president and CEO. Ehrlich, Laurie Fischgrund and Julie to dissolve the trust, pay the sisters Originally, Adell paid $800,000 Verona a combined $3.25 million, dismiss annually to each sister from the both the Oakland and Macomb Ⅲ Lead counsel: Elizabeth trust, but he was suspended as Luckenbach, partner, Jaffe Raitt court cases and transfer all remain- Heuer & Weiss PC, Southfield, for trustee in 2008 after his sisters ing trust assets to Kevin Adell. Fischgrund and Verona brought a request in Oakland That gives him controlling in- Ⅲ Co-counsel: Jeffrey Heuer, County Probate Court for court su- terest in Adell Broadcasting and partner, Jaffe, for Fischgrund and pervision. full ownership of STN.com Inc., a Verona; E. Powell Miller and Jayson The sisters had expressed “con- satellite TV broadcasting busi- Blake, partners, The Miller Law cerns that Kevin Adell violated his ness, and Birmingham Properties, a Firm PC, Rochester, for the fiduciary duties,” mismanaged real estate company that owns the trustees funds and paid himself excessive WADL and Word Network compensation. A court-appointed office/studio properties. special fiduciary found Adell in — Chad Halcom 20130225-NEWS--0013-NAT-CCI-CD_-- 2/22/2013 11:15 AM Page 1

February 25, 2013 CRAIN’S DETROIT BUSINESS Page 13 Focus: Law Shareholder dispute BILLSTEIN ET AL V. GOODMAN ET AL

Venue: U.S. District Court, The steel Detroit, Judge Anna Diggs Taylor company and Case filed: Aug. 7, 2008 several trusts Settlement: $13 million (Crain’s that own the estimate) steel part ma- Date: Dec. 6, 2012 chiner were Plaintiffs: Robert Billstein Sr. and also involved Robert Billstein Jr., individually and in the suit. as trustees of various trusts of the The Bill- Hercules Drawn Steel Corp., Livonia steins alleged Lead counsel: Gerard Mantese, Mantese that the Good- partner, and Mark Rossman, mans, who owned 75 percent of partner, Mantese and Rossman PC, the shares in Hercules, violated Troy the Business Corporations Act by Co-counsel: Ian Williamson, entering unfavorable transactions partner, Mantese and Rossman with its parent Eaton Steel Bar Co., Defendants: Mark Goodman and improperly transferring profits to Gary Goodman, individually and as trustee of various trusts of the Goodmans’ assets and paying Hercules Drawn Steel Corp., themselves excessively high Livonia; Teri Lee Goodman, as salaries, etc. trustee of the Teri Lee Goodman The Billsteins also alleged that Revocable Trust; Enid Goodman, as the Goodmans misappropriated trustee of the Enid Goodman opportunities with the establish- Revocable Trust; and Hercules ment of Atlas Trucking Co. and the Drawn Steel Corp. construction of warehouses in the Lead counsel: David Gunsberg, name of Eaton. partner, Law Office of David B. The Billsteins and various Gunsberg PC, Birmingham; Norman Lippitt, partner, Lippitt O’Keefe trusts owned 5,992 shares of the to- PLLC, Birmingham tal 24,000 Hercules shares, accord- ing to the complaint. After years of motions and re- sponses, the case went to trial in About the case November 2012. Five days into tes- Robert Billstein Sr. and Robert timony, the defendants decided to Billstein Jr. filed a suit in August settle out of court. 2008 against Mark and Gary Gold- The $13 million settlement esti- man, executives at Livonia-based mate was calculated by Crain’s us- Hercules Drawn Steel Corp., over al- ing Michigan Lawyers Weekly in- legations of shareholder oppres- formation, cross-referenced with sion and breaches of fiduciary the case. duty. — Dustin Walsh

Reduced insurance benefits In this moment . . . PAMELA ARMISTED ET AL VS. STATE FARM MUTUAL AUTOMOBILE INSURANCE CO. Are you covered for life’s Venue: U.S. District Court, or conservators Detroit, Judge Arthur Tarnow. of the victims’ Case filed: Oct. 3, 2007 estates) are unexpected moments? Settlement: $3.7 million mostly, but not Date: Sept. 7, 2012 entirely, rela- tives of the vic- Plaintiffs: Five caregivers for six automobile accident victims tims. The plaintiffs, Umbrella policies are a vital tool providing you higher liability limits and Lead counsel: Nicholas Andrews, founder of Liss, Seder & Andrews with Pamela coverage for certain events, not protected by your home and auto policies. PC, Bloomfield Hills Armisted as the Defendant: State Farm Mutual Andrews plaintiff name Automobile Insurance Co., on the case, filed Bloomington, Ill. a joint suit in U.S. District Court in Adding an umbrella policy to your insurance portfolio also makes you Lead counsel: Michael Slater, Detroit, and were led by attorney eligible for valuable multi-policy discounts on your home and auto. executive partner in the Grand Nicholas Andrews of Liss, Seder & Rapids-based motor vehicle Andrews PC, Bloomfield Hills. litigation practice group of Troy- According to the complaint and based Secrest, Wardle, Lynch, Call us today to learn more. Andrews, a State Farm adjuster Hampton, Truex and Morley PC reduced each of the parties’ bene- fits about 50 percent at the same About the case time. On May 7, 2008, U.S. District Five plaintiff care providers for Court ordered State Farm to pay six Michigan automobile accident the full attendant care benefits to victims, each of whom suffered Personal & Commercial Insurance the plaintiffs. However, questions catastrophic traumatic brain in- subsequently arose over payments juries in motor vehicle accidents Contract: [email protected] between 1993 and 2002, sued to one of the care providers and Bloomington, Ill.-based State Farm the case underwent several more 734-525-2432 for coverage analysis Mutual Automobile Insurance Co. af- actions before the parties ultimate- ter alleging the company had re- ly came to a settlement and the duced benefit payments for care by case was dismissed on Sept. 7, 2012. about half. The combined settlement has All of the victims are mentally State Farm paying $3.7 million, impaired to varying degrees and re- including attorney fees, to the quire 24-hour care. The care plaintiffs. providers (who were also guardians — Carl Bookstein 20130225-NEWS--0014-NAT-CCI-CD_-- 2/22/2013 11:16 AM Page 1

Page 14 CRAIN’S DETROIT BUSINESS February 25, 2013 Focus: Law Birth at county jail HOWARD LINDEN, CONSERVATOR FOR MINOR CHILD C.B. V. WAYNE COUNTY, WAYNE COUNTY JAIL, DEPUTIES DIANE CHRISTENSEN AND JOHN PRIMEAU ET AL

Venue: U.S. District Court, partner, and Paul Manion, still a fetus, and therefore not pro- Detroit, Judge Stephen Murphy president, Rutledge, Manion, tected by the Constitution and civ- Rabaut, Terry & Thomas PC, Detroit. Cases filed: Jan. 31, 2006 il rights law — an argument later Originally Karie Boylan, a former rejected by the 6th U.S. Circuit Settlement: $8 million assistant corporation counsel for Court of Appeals. Date: Nov. 9, 2012. Dismissal Wayne County. The county reached a settlement Dec. 18. Co-counsel: Amy Schlotterer and Plaintiff: Howard Linden, Matthew Thomas, attorneys, in September and had the federal conservator for the estate of C.B., a Rutledge Manion. lawsuit dismissed in December. female child born Various corrections officers and to Chantrienes nurses were dismissed as individ- Barker at the About the case ual defendants in the case, and the Wayne County county agreed to three structured In December 1998, Chantrienes Jail in 1998. payments totaling $8 million be- Original Barker gave birth at the Wayne tween December 2012 and October complaint filed by County Jail, while she was an in- 2014. Lorranie Havard, mate awaiting trial, to a daughter The agreement states that the a relative of who initially had no heart rate or Barker. payments are “consideration for respiration and who ultimately Lead counsel: an alleged Monell violation” to the was found to have severe mental Geoffrey Fieger, Fieger child — a reference to a 1978 U.S. president, Fieger impairment and cerebral palsy. Supreme Court ruling that states Fieger Kinney Giroux & Danzig PC, Barker is now serving a life sen- local governments are liable if Southfield; Lisa Weinstein, tence after a 1999 conviction for their employees violate someone’s associate, Beam & Raymond, felony murder, kidnapping and constitutional rights only when Chicago conspiracy charges, but the law- there is a written policy in place or Co-counsel: Jack Beam, partner, suit filed on her daughter’s behalf Beam & Raymond a widespread practice that has be- in 2006 alleges the child’s impair- come the government’s custom. Defendants: Wayne County, Wayne ments stem from Barker being ig- County Jail, Deputies Diane About $3.1 million is deducted Christensen and John Primeau, six nored for more than two hours as from the payment to cover attor- other deputies and five nurses. Five she neared delivery. ney costs and fees, and about individual defendants were dismissed The county claimed qualified $10,000 in conservator fees for on September 2012, the others later immunity as a government entity plaintiff Howard Linden, conser- dismissed per settlement. and contended in part that at the vator for the child’s estate. Lead counsel: David Brauer, time of the child’s injuries she was — Chad Halcom

Deal on Dodges Bus crash TWS WORLDWIDE SA DE CV V. CHRYSLER GROUP JOYCE SIMMONS V. FLOYD PITTS, INTERNATIONAL LLC SAFEWAY TRANSPORTATION INC.

Venue: U.S. District Court, Detroit, Judge Avern Cohn Venue: Wayne County Circuit Court, Detroit, Judge Case filed: Jan. 27, 2012 Daniel Ryan Judgment: The American Arbitration Association Case filed: Aug. 18, 2010 awarded TWS $3.13 million Judgment: $4.34 million Date: Award confirmed in district court March 23, Date: July 24, 2012 2012 Plaintiff: Joyce Simmons Plaintiffs: TWS Worldwide SA de CV, Mexico City Lead counsel: Michael Morse, partner; Christopher Lead counsel: James DeLine, partner, Kerr, Russell Filiatraut, partner; and Jacob Yeats, associate, Law and Weber PLC, Detroit Offices of Michael J. Morse PC, Southfield Defendants: Chrysler Group International LLC, Auburn Defendants: Floyd Pitts and Safeway Transportation ENJOY THE GAME. Hills Inc., Detroit Lead counsel: James Feeney, partner, Dykema Lead counsel: Michael Hutchinson, partner, and Tara THEN ENJOY THE GAMES. Gossett PLLC, Bloomfield Hills Cannatella, partner, Hutchinson & Associates PC, Detroit. About the case On Sept. 11, 2009, TWS Worldwide and Chrysler Group About the case International entered into a sales agreement under On Oct. 21, 2009, Joyce Simmons was a passenger in which TWS became the exclusive distributor of Dodge a 2002 Chrysler driven by her sister Charlene Sim- Ram, Challenger and Charger models to Chrysler dealers in Europe and Russia. mons. As part of the agreement, TWS distributed $3 million The two were driving down East Jefferson Avenue in funds at DZ Bank in Germany as a letter of credit. in Detroit and were struck by a bus turning left from However, things went sour between the two parties East Jefferson onto Dickerson Street. when Chrysler filed an arbitration proceeding on Feb. Defendant Floyd Pitts drove the Thomas Built Bus 2, 2010, against TWS for failure to pay on car orders. operated by Detroit-based Safeway Transportation Inc., On June 15, 2010, TWS filed a counterclaim alleging which was operating under a contract to provide pub- Chrysler breached the sales agreement by selling lic busing for the city of Detroit. Dodge models to TWS’ competition in Europe and Joyce Simmons suffered injuries in the crash, in- Russia, voiding its exclusive deal. cluding a broken wrist, disc protrusion in her back, a Chrysler amended its claim in April 2011, asserting muscle tear in her right shoulder and injury to a ten- that TWS failed to pay for $3 million in vehicles deliv- don in her left knee. APRIL SUITE SWEET DEAL ered to the distributor. It sought more than $6 million Joyce Simmons sued the defendants for negligence. in damages. During the case, both parties argued over the color Receive a voucher for a free hotel stay* at MotorCity Casino Hotel TWS lawyer James DeLine, partner at Kerr, Russell of the traffic light on East Jefferson. Both believed with every party suite purchased in the month of April.** and Weber PLC, contended in arbitration that Chrysler they had the right of way. was drawing from the $3 million letter of credit dur- A jury ruled that Pitts was 90 percent negligent in ing arbitration and received an injunction against the driving the bus and Charlene Simmons 10 percent automaker. Meanwhile, TWS’ European operations in negligent. Hamburg, Germany, closed in 2011. As a result, the jury awarded Joyce Simmons $1.5 Arbitrators heard testimony in November 2011 and million for past and present damages, $2.34 million *RESTRICTIONS APPLY. APPROXIMATE VALUE $179. **DOES NOT INCLUDE OPENING DAY, 4/26, 4/27 OR 4/28. awarded TWS $3.13 million — $3 million stemming for future pain and suffering and $500,000 for excess from the letter of credit and $130,000 in damages. wage loss, totaling $4.34 million. — Dustin Walsh — Dustin Walsh 20130225-NEWS--0015-NAT-CCI-CD_-- 2/22/2013 11:17 AM Page 1

February 25, 2013 CRAIN’S DETROIT BUSINESS Page 15 Focus: Law Defamation Domain name dispute Mobile home park assets via blog WEATHER UNDERGROUND INC. V. NAVIGATION CATALYST SYSTEMS INC. ET AL NORTHVILLE CROSSING VENTURE LLC AND SALEM LAND Ⅲ Venue: U.S. District Court, Detroit, ground filed a complaint against El Se- ASSOCIATES LP VS. KM EIGHT MILE GROUP INC. Judge Marianne Battani gundo, Calif.-based Navigation Catalyst CHRIS ARMSTRONG V. ANDREW SHIRVELL Ⅲ Case filed: Feb. 27, 2012 Systems Inc. and the other defendants Ⅲ Venue: Oakland County Circuit Court, Judge Martha Anderson Ⅲ Judgment: $3.5 million with the National Arbitration Forum regard- Ⅲ Case filed: April 18, 2011 Ⅲ Venue: U.S. District Court, Ⅲ Date: Sept. 15, ing the company’s use of 41 misspelled Detroit, Judge Arthur Tarnow 2012 Weather Underground domain names. Ⅲ Settlement: $4.97 million Ⅲ Case filed: April 1, 2011, Ⅲ Plaintiff: Weather An arbitrator ordered the company Ⅲ Date: July 12, 2012 Washtenaw County Circuit Court. Underground Inc., Ann to transfer the domains to the Weather Ⅲ Plaintiffs: Northville Crossing Venture Removed to U.S. District Court on Arbor Underground. However, in due dili- LLC, Northville; Salem Land Associates May 31, 2011. Ⅲ Lead counsel: gence, many more infringements were LP, Bloomfield Hills Ⅲ Verdict: $4.5 million Enrico Schaefer, discovered and Weather Under- Ⅲ Lead counsel: Richard Rassel, partner, Ⅲ Date: Aug. 16, 2012 partner, Traverse Legal ground’s attorneys filed suit in 2012. Williams, Williams, Rattner & Plunkett PC, Ⅲ Plaintiffs: PC, Traverse City In all, Navigation Catalyst registered Birmingham Chris Armstrong, Ⅲ and used 264 domain names such as Ⅲ Defendants: KM Eight Mile Group, Co-counsel: Brian Rassel former president, Hall, partner, Traverse qwunderground.com, uder- Farmington Hills Michigan Student Legal PC; Anthony Schaefer groundweather.com and winder- Ⅲ Lead counsel: David Mendelson of David Mendelson PC, Assembly at the Patti, partner, Hooper Hathaway PC, Ann ground.com. Weather Underground’s Birmingham University of Arbor actual trademarked sites include wun- Michigan. Ⅲ Defendants: Navigation Catalyst derground.com, weatherunder- Graduated in Systems Inc., El Segundo, Calif.; Basic ground.com and wund.com. About the case 2011. Fusion Inc., El Segundo (dismissed Nov. Ⅲ Lead counsel: 13, 2009); First Look Inc., El Segundo Navigation Catalyst and its co-defen- Bloomfield Hills-based Salem Land Associates LP, one of Deborah Gordon, (dismissed Nov. 13, 2009); and dants denied the charges on the grounds two co-owners of a mobile home community in Washtenaw that automated software had registered managing Gordon Connexus Corp., El Segundo (dismissed County’s Salem Township, filed suit in 2011 against the oth- member, Law Nov. 13, 2009); Epic Media Group Inc., the domain names and therefore had no er owner, Farmington Hills-based KM Eight Mile Group, claim- Los Angeles intent, its lawyers argued in court. Offices of Deborah L. Gordon PLC, ing it had improperly diverted the community’s assets. Bloomfield Hills Ⅲ Lead counsel: William Delgado, Navigation Catalyst, a shell compa- Salem and KM each owned 50 percent of the Northville Ⅲ Defendants: Andrew Shirvell, partner, Willenken Wilson Loh & ny created by Connexus Corp., has a his- Crossing mobile home development. Salem contributed the former assistant attorney general Delgado, Los Angeles tory of cyber squatting accusations. under Michael Cox, who fired him in Ⅲ Co-counsel: Nicholas Stasevich, Verizon Wireless settled a similar suit land, valued at $4 million, and KM provided $2 million in November 2010. Now living on Long partner, Butzel Long PC, Detroit against Navigation Catalyst in 2008. capital to launch the community. Island, N.Y. WU was founded in 1995 by Jeff Mas- Salem, through Northville Crossing, filed suit in Oak- Ⅲ Lead counsel: Represented self at ters while working on his doctorate at land County Circuit Court alleging that KM engaged in trial. About the case University of Michigan. It achieved al- unauthorized transactions that improperly diverted Ⅲ Co-counsel: Robert Fleming, Ann Arbor-based Weather Under- most cult-like status among weather Northville Crossing’s assets. Robert G. Fleming Attorney At Law, ground Inc.’s $3.5 million jury award purists for its data-based approach and The case ultimately went into mediation and facilitation. Williamston stems from “cyber squatting” — the now averages about 10 million unique The facilitator agreed to by the court was John Schaefer. bad-faith use of a domain name with visitors per month. It was bought by Salem agreed to sell its half of Northville Crossing for About the case the intent to profit. The Weather Channel in July. $4.97 million to KM, and the case was dismissed July 12. On Aug. 18, 2008, Weather Under- — Dustin Walsh — Carl Bookstein Jurors took about one full day in August to find Andrew Shirvell, formerly an assistant state attor- ney general who had launched the anonymous “Chris Armstrong Watch” blog beginning in April 2010, liable for defamation, stalk- ing and intentional infliction of emotional distress. Christopher Armstrong, a gay University of Michigan student and president of the Michigan Student Assembly in 2010-11, drew atten- tion from Shirvell, a UM alumnus who went on to graduate from the Ave Maria School of Law. Shirvell first formed a Facebook page about Armstrong that was lat- PROUD TO BE IN er deactivated, and then launched a blog accusing Armstrong among other things of being a “viciously militant homosexual activist,” host- ing an orgy in his dorm room in 2009, hosting a “gay rush party” at his home in 2010 to “liquor up un- derage freshmen and promote ho- mosexual activity,” and of “openly mocking Christians” at UM. Then-Attorney General Mike Cox fired Shirvell in November 2010 after the blog gathered wide- DETROITWhen you’re serious about intellectual property law … spread media attention. Shirvell has said he viewed his blog as a Use Brinks, now in Detroit. Brinks is a recognized national leader in movement to get Armstrong to re- sign as student body president, intellectual property law. With its new Detroit Office located in the same and that he was acting within his building as a U.S. Patent and Trademark Office, domestic First Amendment rights. He also countersued Armstrong and international clients can participate in on-site patent in January 2012, claiming Arm- examination and administrative trial proceedings. strong’s actions caused him to lose his job. Shirvell, in an email, said he Serving innovators in Michigan and beyond: plans to appeal the “absurd” $4.5 million judgment, but cannot file a Detroit Offi ce Ann Arbor Offi ce U.S. Patent Suite 1775 Suite 200 notice of appeal until Tarnow No. 129,843 makes a ruling on some motions he Steam engine 300 River Place Drive 524 South Main Street has filed. He has also brought a civ- lubricator by Detroit, MI 48207 Ann Arbor, MI 48104 il lawsuit for defamation and false Detroit inventor 313.393.5400 734.302.6000 light against Gordon, which awaits Elijah J. McCoy, a pretrial hearing this week. granted in 1872. Chicago | Ann Arbor | Detroit | Indianapolis | Research Triangle Park Area | Salt Lake City | Washington, DC | www.usebrinks.com — Chad Halcom 20130225-NEWS--0016-NAT-CCI-CD_-- 2/22/2013 11:39 AM Page 1

Page 16 CRAIN’S DETROIT BUSINESS February 25, 2013 The firm worth listening to is the firm that Job Front

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 via an elevated moving walkway. Tele- Drive, Dearborn, (313) 768-5766. and branch man- ager, Flagstar Bank, Troy, from vice president and general man- ager, Huntington Bank, Shelby Township. MARKETING Steffens Betsy Lazar to ex- ecutive vice president, chief media of- ficer, WPP Group’s Team Detroit, from vice president, global media, Kellogg Co., Kalamazoo.

Andrew Purkiss SERVICES Rick Andrew to di- rector, global business develop- ment – water sys- tems, NSF Interna- tional, Ann Arbor, from gen- eral manager, drinking water Stark treatment sys- tems certification. Also, Dave Purkiss to general manager, drinking water treatment and distribution systems programs, from general manager of water distribution systems; Jennifer Sharp and Kelli Fleischmann to opera- tions managers of the drinking water treatment systems certification pro- gram, from senior certification pro- ject manager and group leader, re- spectively; and Blake Stark to business unit manager, drinking wa- ter treatment chemicals and recre- ational water programs, from busi- ness unit manager, drinking water treatment chemicals program. 20130225-NEWS--0017-NAT-CCI-CD_-- 2/22/2013 5:37 PM Page 1

February 25, 2013 CRAIN’S DETROIT BUSINESS Page 17 Lottery: State looks to online option REAL ESTATE ■ From Page 3 WATERFRONT PROPERTY APARTMENT BUILDINGS tomer counts,” Arabo said. 10,000 iLottery sales transactions He said attracting players back to Move your Business Hazel Park-57 Units He said if retailers lose players, per minute initially and expand up online games posed a marketing "Like New" $1.4m in that means not just a loss of com- to 50,000 concurrent players should challenge and the state has a new NORTH! Renovations. Asking missions from tickets, but more the lottery desire. campaign it will launch the next $1.99m. Call Greg importantly, foot traffic and sales Players could register online and time a prize is large enough. Part of Coulter at IPO 248-932-0300 of additional items. set up “virtual wagering accounts” the message “will be that you can “It’s not just the 6 percent com- into which they could transfer play either with regular retailers or mission when they sell lottery, it’s funds that would be used to make over the Internet,” Jones said. that customer who might come in bets and play games. Winnings The Illinois Retail Merchants Asso- and buy a bottle of could also be de- ciation has commissioned an eco- ˜Beautiful Petoskey-Harbor pop, snack, what- posited into the nomic impact study to determine, Springs ever that might accounts, accord- It’s not just the 6 among other things, how Illinois’ ˜4,400 SQ FT. Building be,” Arabo said. ing to the RFP. brick-and-mortar lottery retailers “ ˜ Office, Manufacturing, Retail Bowen declined percent commission The system have been affected by online sales. to be interviewed would need to be As in Michigan, the loss of walk- ˜Buy, Lease, Option-to-buy for this story, but able to verify a when they sell in traffic has been a concern. J a state request for player’s age, iden- “Of course, you want to sell lot- oe Blachy proposals to devel- lottery, it’s that tity and physical tery tickets if you’re a lottery deal- (231) 409-9119 op, implement, location, with the er, but it’s the auxiliary sales that provide opera- Call anytime between 7am & 10pm 7 days a week!" customer who might goal of only allow- are made that help pay the bills, tional support and 420 Howard St., Petoskey, MI 49770 JOB ing eligible help pay the salaries, help pay the maintain a Michi- come in and buy a Michigan players property taxes,” said association COMMERCIAL PROPERTIES gan iLottery sys- who are physical- President and CEO David Vite. FRONT tem lists an objec- bottle of pop, snack, ly located in the He said the study should be com- tive of “enhancing state to play. The "CTPMVUF
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Page 18 CRAIN’S DETROIT BUSINESS February 25, 2013 Price fixing: Suppliers feeling uneasy ■ From Page 1

future; it is difficult to provide a reasonable estimate on the “ WANT TO LIGHTEN amount of such losses at this time,” it said. Case file YOUR ENERGY BILL?” In 2012, eight companies and more than a dozen individual exec- U.S. V. YAZAKI CORP., NIPPON SEIKI CO. LTD., DTE ENERGY WILL SHOW YOU HOW. utives entered guilty pleas and agreed to a collective $609 million DENSO CORP., AUTOLIV INC. ET AL in fines with Justice, making the Ⅲ Venue: U.S. District Court, Detroit, Judge George Steeh If you want to lower your energy costs, get more total in judgments before U.S. Dis- Ⅲ Cases filed: Sept. 3, 2002, in Chicago; Oct. 22, 2007, in Detroit efficient. Like saving up to 90% on lighting costs trict Judge George Steeh the Ⅲ largest amount in Crain’s report Settlement: $609 million by replacing traditional lighting with energy on large verdicts and settlements Ⅲ Dates: Jan. 30 through Nov. 16, 2012 efficient LEDs or CFLs. last year. (See Page 11.) Ⅲ Plaintiff: U.S. Department of Justice, antitrust division That’s a huge increase from the Ⅲ Lead counsel: Assistant Attorney General William Baer; former acting FOR ENERGY SAVING TIPS, single $200 million judgment Assistant Attorney General Joseph Wayland; Marvin Price, director of against Furukawa Electric Co. Ltd. in criminal enforcement. VISIT: dteenergy.com/savenow September 2011 that launched the Ⅲ Co-counsel: Scott Hammond, deputy assistant director for criminal U.S. prosecution phase of the glob- enforcement; Kathryn Hellings, national crime enforcement section. al investigation. Ⅲ Defendants: Yazaki Corp., Tokyo, (U.S. subsidiary in Canton Township); But more than 20 public compa- Nippon Seiki Co. Ltd., Nagaoka, Japan (U.S. subsidiary in Troy); Denso nies have made public disclosures Corp., Kariya, Japan (U.S. subsidiary in Southfield); Autoliv Inc., Stockholm (U.S. subsidiary in Auburn Hills); Tokai Rika Co. Ltd., Oguchi, Japan (U.S. that they cooperated with search- subsidiary in Plymouth); TRW Deutschland Holding GmbH, a German unit of es, subpoenas or raids on four con- TRW Automotive Holdings Corp., Livonia; Fujikura Ltd., Tokyo (U.S. tinents as part of the global inves- operations in Novi and Santa Clara, Calif.); G.S. Electech Inc., Toyota City, tigation since early 2010, and more Japan; Hiroshi Yoshida, Toshio Sudo, Makoto Hattori and 10 other supplier than 30 are defendants in a related company executives sentenced to a combined 15.7 years in prison. multidistrict civil case that com- Ⅲ Lead counsel: John Majoras, partner, Jones Day, for Yazaki; Steven bines more than 70 lawsuits Cherry, partner, WilmerHale LLP, for Denso; David DuMouchel and George brought nationwide by purchaser Donnini, shareholders, Butzel Long PC, for Tokai Rika and subsidiary TRAM supplier companies, auto dealer- Inc.; Peter Kontio, partner, Alston & Bird, for Autoliv; A. Paul Victor, partner, ships and individual car buyers. Winston & Strawn LLP, for Nippon Seiki. Also getting U.S. attention is Behr America Inc., the Troy-based why in recent months it has ap- vestigation begins it is usually a subsidiary of Behr GmbH & Co. KG, peared to grow slower. multiyear process (to complete),” which announced in 2012 that Jus- Nearly all the sizable criminal Janis said. tice was investigating its U.S. op- judgments came in the first half of “Interest in the automotive erations, although it, like NSK, the year, and no new agreements price-fixing antitrust arena in this has not been charged here. in Detroit have come since Tokai state just keeps growing. And just Stuttgart, Germany-based Mahle Rika Co. Ltd. agreed to a $17.7 mil- going by Mr. Hammond’s com- Group GmbH, which first acquired a lion fine Oct. 30 (Hiroshi Yoshida ments, we don’t expect this growth stake in Behr in 2010 and now pleaded guilty in Toledo to violat- of court cases in Detroit to go away owns 36.8 percent of it, has said it ing the federal Sherman Act on any time soon.” Industry segments known to be would hold off on a past plan to Nov. 16, for conspiring to rig bids affected so far include makers of grow to majority shareholder of on anti-vibration rubber parts go- wire harnesses, instrument panel Behr this year in light of the price- ing back to 2005). fixing investigation. clusters, heater control systems, Analysts have told Crain’s in re- occupant safety systems, anti-vi- cent months that the price-fixing bration systems — and more re- Suppliers reignite reviews prosecution has become a known cently, ball bearings. commodity and investor fears in Bids usually came in for U.S. Local attorneys said last week the early days of the have largely manufacturers three years before that their supplier clients are subsided by now. the first model year of a proposed reigniting internal reviews after Local attorneys have said the part’s typical four- to six-year pro- Deputy Assistant Attorney Gener- quiet is probably just a lull be- duction life. The bidding company al Scott Hammond of the Antitrust tween an initial round of compa- executives allegedly aligned prices Division earlier this month nies the government was comfort- on a model-by-model basis, and seemed to be saying in a Detroit able reaching deals with in early sometimes resorted to code words, appearance that the government is 2012 and a second set of prosecu- meetings at home or remote loca- taking a broader industry view. tions or plea deals that will likely tions to help keep the conspiracy Hammond said during an event ramp up by late this year as it secret, according to court records. hosted by the State Bar of Michigan nears the conclusion of its case. “This is going to spread out. Antitrust, Franchising and Trade The guilty pleas thus far relate to a Regulation Section that the price- consistent pattern of cooperation fixing investigation “has grown Case may be largest between the defendants and vari- over time and is broader than ous competitors,” said Steven Kan- Hammond while in Detroit also what we’ve announced so far.” ner, founding partner of Freed Kan- reiterated a past projection by Jus- “When the DOJ says ‘We have ner London & Millen LLC in Illinois tice that the auto supplier case will increased our scope,’ it makes for and co-lead counsel for a proposed be its largest ever when completed. a lot of uneasy suppliers because class of supplier purchasers in the If so, the industry can expect they don’t know what that entails civil lawsuit against the suspected nearly $1 billion more in fines in or who will be colluder companies. under investiga- order to overtake the combined “To think for a minute they tion. Ham- judgments Justice obtained from would rig bids to only a few Asian mond’s com- more than 20 companies in the air manufacturers we know about, ments were cargo and transportation industry and not to smaller purchasers that quite a wakeup between 2007 and 2010. haven’t been addressed yet, is con- call,” said Mark Brian Janis, chairman of the an- trary to rational thought.” Aiello, partner titrust and trade regulation sec- The price-fixing scandal origi- at Foley & Lard- tion of the State Bar and an associ- nated when FBI, European Commis- ner LP in Detroit ate general counsel at Flagstar sion and Japanese trade agents and co-chair of Bancorp Inc., said the supplier raided several suppliers in 2010. In Aiello its automotive price-fixing probe has already the U.S., FBI agents raided Yazaki practice. broadened so much that most state North America’s offices in Canton “They want everyone to think antitrust attorneys who are in pri- Township, Denso’s Southfield of- that everyone is under review, be- vate practice either have played a fice and Tokai Rika Group North cause they are pushing for self- role in the case or work at law America in Plymouth Township. reporting (by companies) and if firms with a connection. Chad Halcom: (313) 446-6796, everyone is a target, there’s more “There’s a familiar pattern in [email protected]. Twitter: incentive to do so.” most cases where information ob- @chadhalcom. If the government crackdown is tained in one investigation leads to Dustin Walsh contributed to this getting larger, that may explain many other new ones. Once an in- report. 20130225-NEWS--0019-NAT-CCI-CD_-- 2/22/2013 7:53 PM Page 1

February 25, 2013 CRAIN’S DETROIT BUSINESS Page 19 Snyder: Gov. mulls emergency manager picks; Detroit prepares ■ From Page 1

sources,” Bing said in a statement. in a voter referendum in Novem- appointed, the pay and benefits of ties, including water and sewage grounds, as well as subsequent art Snyder said an emergency man- ber, leaving in its place its predeces- all elected officials are automati- and transportation services. purchases and donations. ager needs to be good at relation- sor, PA 72 of 1990, which is the law cally suspended, Bernstein said, al- Asset sales must also be ap- A 2004 city report pegged the val- ship-building, have significant fi- emergency managers operate un- though the emergency manager proved under the same terms and ue of the collection at that time at nancial expertise and act der now. can restore them in full or in part. restrictions as collective bargain- over $1 billion. decisively. But in the lame-duck legislative ing unit changes. The DIA collection has been re- Short-list candidates “have ex- session last year, Michigan law- What about labor contracts? ferred to as being part of a “public pertise in restructuring and trou- makers approved PA 436 of 2012, After meeting with appropriate How long would an EM be in place? trust,” but the DIA would not com- bled situations in some fashion. … which goes into effect March 28 bargaining representatives, an EM Bernstein expects a turnaround ment on whether there is legal We need a real decision-maker. and is the law a Detroit emergency is allowed to reject, modify or ter- process under an emergency fi- trust ownership of its art or any This can’t be someone who is inde- manager would work under. minate one or more terms of an ex- nancial manager to take a mini- other matter related to a possible cisive or be in the ‘long-study’ isting collective bargaining agree- mum of 18-24 months. sale. mode,” Snyder said. Does the city have the option to re- ment so long as it is “reasonable City council has the right to vote “Our lawyers have advised us Patrick O’Keefe, founder and ject an appointment? and necessary to deal with a broad, to dismiss an emergency financial not to comment, and nor will CEO of Bloomfield Hills-based O’- If Snyder opts to hire an emer- generalized economic problem” manager after 18 months with a they,” Pam Marcil, the DIA’s direc- Keefe and Associates, said the city gency manager, the city would and is “directly related to and de- two-thirds vote. If the mayor ap- tor of public relations, said. needs to determine whether its $1 have 10 days to appeal the deci- signed to address the financial proves, the city would have the Even if an emergency manager billion in revenues is enough to sion. If he chooses not to appoint emergency for the benefit of the right to negotiate a consent agree- could legally sell the DIA’s collec- provide core services to approxi- an emergency manager, he could public as a whole.” ment with the state treasurer with- tion, there’s a question of whether mately 700,000 residents. instead opt to extend, amend or en- The plan also has to be tempo- in 10 days if it hasn’t previously it would be a good idea, Citizens Re- If the answer is no, the city ter into a new consent agreement. rary and not target specific classes breached a consent agreement. search Council President Jeffrey needs to generate enough revenue of employees. If that agreement isn’t reached, Guilfoyle said. to do so, O’Keefe said. What power does an emergency Exempt from EM control are the city proceeds to a “neutral eval- “If you are looking at any kind There are problems on both the manager have? benefit payments related to the uation process” to resolve the con- of asset sale, that is very much expense and revenue side of city fi- The primary one is to develop a death of a police officer or fire- flict.City council can ask for an EM one-time money. You can’t solve nances, agreed Sandy Pierce, budget and deficit elimination plan fighter in the line of duty. to be removed before 18 months is your ongoing issues with one-time chairwoman and CEO of FirstMerit that returns the city to financial sta- Proposed collective bargaining up, but both the mayor and the gov- asset sales,” he said. Michigan and also chairwoman of bility. changes need to be submitted to ernor would have to approve. DIA director Graham Beal has the Detroit Financial Advisory The EM has a number of means city council, which will then have said any such sale would cause ir- Board. “It is very difficult when toward that end, including selling 10 days to approve or reject the What about the DIA’s art collec- reparable harm to the museum’s those two things are working assets, consolidating or eliminating changes. If it doesn’t act, the action tion? reputation and standing in the in- against you.” city departments, establishing new ternational art community. will be considered approved. It presumably could be sold or But Pierce said she is encouraged staffing levels, collectively bargain- leased, but clarity on this topic has And other museum supporters If rejected, council within seven by some progress, such as recent ef- ing with unions, ordering a millage been hard to find. have speculated that a sale of the days must submit a proposal to the forts to collect back taxes from indi- election, and recommending to the When the city transferred opera- museum’s collection could mean Local Emergency Financial Assis- viduals and businesses that have governor and state treasurer that tion of the Detroit Institute of Arts in the loss of future donations from owed and never paid for years. And the government enter Chapter 9 tance Loan Board that would 1998 to the nonprofit authority that disenfranchised donors and could the city is being more aggressive on bankruptcy. achieve substantially the same re- currently runs it, the city of De- spur donor lawsuits. current tax collection. “They assume control over all fi- sult. The board has 30 days to re- troit retained ownership of the col- Reporter Sherri Welch helped re- So what happens next? Here are nancial matters, with or without view before picking one of the pro- lection, the building and the port this story. the answers to some of the most the assistance of the local govern- posals. common questions about how a ment,” said Douglas Bernstein, a government run by an emergency partner at Plunkett Cooney PC in How would asset sales work? manager would work. Bloomfield Hills. “The local gov- The EM has the authority to What law authorizes an EM? ernment is supposed to cooperate, conduct asset sales under some re- There have been three laws that but it really will be up to the emer- strictions. provide for an emergency manag- gency financial manager as to how Both PA 436 and the Detroit city er with varying degrees of power. much.” charter require a public vote be- Public Act 4 of 2011 was repealed Once an emergency manager is fore disposing of city-owned utili- Belle Tire: Spreading more tread ■ From Page 3 The company’s current revenue is more than $300 families, students and others. million, Barnes said. A coffee bar with a mosaic-tiled backsplash and Besides replacement tires, Belle Tire provides oil free coffee. changes, windshield repair and mechanical repairs of Upscale restrooms. suspensions, brakes, shocks and struts. Other tire retailers and automotive service Belle Tire is pursuing the expansion and renova- providers carry similar brands and pricing, so it be- tion plan on the heels of soft market conditions in re- comes the customer service and waiting time that’s cent years. the differentiator for a retailer like Belle Tire, said The milder-than-usual winters last year and this Ken Nisch, chairman of the Southfield-based retail year have prompted more customers to put off replac- consulting firm JGA Inc., which worked on the design ing tires, Barnes said. Although this winter has been of the waiting and showroom areas. cold, any time significant snow has fallen, it has melt- The new, modern design is meant to provide better ed within a couple of days, he said. customer service while instilling confidence in con- According to the Rubber Manufacturers Association, sumers, he said. the U.S. tire replacement market fell 2.5 percent in “You want people to feel this isn’t your neighbor- 2012 to 234 million units. The association forecasts hood grease monkey garage; these are technicians do- that it will increase this year by about 1.3 percent. ing this job,” Nisch said. Belle Tire launched renovations of the customer Scottsdale, Ariz.-based Discount Tire/America’s Tire, waiting areas and showrooms at about six stores last founded in Ann Arbor in 1960, declined to share spe- spring. It plans to update 10-12 this year and to com- cific information about its revenue or market expan- plete renovations of all stores in Michigan and four sion. But the company “is committed to Michigan, Toledo stores within the few years, Barnes said. and the state remains part of the company’s overall The new design features an open floor plan, taking nationwide growth plan,” said Joseph Valdez, an ac- down the walls between customer waiting areas and the showrooms and counters in the customer service count supervisor at the Lavidge Co. in Phoenix, speak- area in favor of “sales pods” to give customers — par- ing on the retailer’s behalf. ticularly women — more individualized, one-on-one According to Tire Business, Discount Tire operated attention with sales personnel. 850 stores in 26 states at the end of last year and re- Also included in the new design: ported 2011 sales of $3.71 billion. A business bar and free Wi-Fi for customers. Discount Tire is currently enhancing its store fea- Floor-to-ceiling racks of chrome tires that sepa- tures and design in Michigan and other markets, rate the waiting and customer service areas and serve Valdez said, incorporating modern, customer-friend- as the “jewelry” for the space. ly showrooms that also incorporate sales pods. Three seating configurations and flat-screen tele- Sherri Welch: (313) 446-1694, [email protected]. visions to provide spaces for working professionals, Twitter: @sherriwelch 20130225-NEWS--0020-NAT-CCI-CD_-- 2/22/2013 5:39 PM Page 1

Page 20 CRAIN’S DETROIT BUSINESS February 25, 2013 Art Van: Eye on Chicago Lear just one case of activist investors, ■ From Page 3 ing Samsung and other brands in washers, dryers, refrigerators and Art Van goes to Florida company execs sparring over direction stoves, Yost said. The total investment so far in the to find luxury-brand boss nate preferred stock ahead of its leases, build-out costs and inventory BY DUSTIN WALSH Marcato and Oskie said new CRAIN’S DETROIT BUSINESS upcoming shareholders meeting. board members would be tasked for the Chicago stores is north of $40 Overseeing the strategy for Art million, Yost said, not including ad- with raising the share repur- Van Furniture Inc.’s Scott Shuptrine Materializing from the recent chase program to $2 billion and vertising and employee hires that are Interiors business as its new direc- downturn, which vaporized many Asking for answers expected to be in the hundreds. “Over reviewing the company’s capital tor is Nancy Jones, who moved to shareholder returns, is a new era David Sowerby, a portfolio the next five years when we’re fully expenditures and its acquisition Michigan from Florida about a of short-term capitalism. Today’s manager in the Bloomfield Hills built out, we want to get 10 percent and divestiture strategy. month ago. investors are more aggressive office of Loomis Sayles & Co. LP, market share or greater in Chicago,” Of the 135 activist campaigns She replaced Aleta Knudholt, and thirsty for returns — often said corporations are sitting on he said. in the Activist Insight report, 16 who is now manager of the Scott pitting management strategy record amounts of cash and are That would be $220 million of the sought for a new or accelerated Shuptrine showroom in Grand against investor demands, ana- reluctant to break open the piggy $2.2 billion market for furniture and repurchase program. Rapids. lysts say. bank in an un- mattresses in the greater Chicago Lear Corp. is the most recent Jones joins Art Van with two certain econ- area, Yost said, citing the trade publi- target of investors locally, with decades of experience in the luxury omic climate. Room for more? cation Furniture Today. Marcato Capital Management LLC furniture brand But the move Ryan Brinkman, an automo- Art Van ranked No. 43 on Crain’s and Oskie Capital Management LLC industry, most has triggered tive equity analyst for J.P. Mor- Private 200 list for 2012, with 2011 seeking seats on the Southfield- recently serving activism a- gan Chase & Co., said investors in revenue of $470 million, up from $430 based supplier’s board of direc- as Florida dis- mong inves- million the year before. tors at its annual stockholders the auto supply base are seeing trict manager for tors who want Art Van’s move into Chicago is meeting in April. historically low debt-to-EBITDA Furniture Brands answers, and timed right, given the availability of Activist shareholders are a (earnings before interest, taxes, International. She action, on the high-quality space at favorable lease trend among public companies in depreciation and amortization) oversaw opera- funds. rates and high demand, said Mary the post-recession U.S. in a recov- Sowerby in the sector, leading many to tions for seven “Whether Frye, president of the Home Furnish- ering economy with brighter take action. Thomasville Furni- it’s the auto companies or Apple ings Independents Association in Dallas. business prospects, according to a Investors want Lear to in- ture Industries and or any other corporation, every- Even though well-established com- Jones January report from the global crease shareholder value and two Drexel Her- one is sitting on a lot of cash. And panies like Walter E. Smithe and Ashley activist watchdog firm Activist In- take advantage of the historical- itage Furniture stores in the state. Be- when the shareholders are ac- Furniture Industries Inc. operate in sight. ly low interest rates for capital fore that, she was a store manager tivist or not, they all want to Chicago, “for a well-run operation like According to its report, 58 of expenditures or other opera- and lead design consultant with know what they are going to do Art Van, I believe there’s room in the 135 activist campaigns tracked in tions, he said. Thomasville. with the cash,” Sowerby said. market,” Frye said. 2012 sought board seats. Of those Lear currently has $1.1 billion — Sherri Welch “The macro backdrop is more of a “Chicago is an area they’ll be able seeking board seats, 45 or about in EBITDA with debt totaling tailwind to the greater interest of to build a following in because they 80 percent were successful. $626 million for a debt-to-EBITDA investors, leading to heightened are doing the right things (with) tion that would truly represent the Van Buren Township-based ratio of 0.6X. The industry aver- activity.” knowledgeable, well-trained person- brand in a significant way,” he said. Visteon Corp. narrowly avoided a age is at 1.6X — much lower than Marcato and Oskie, represent- nel, prepared to take care of cus- The higher household income of proxy fight in 2011 when its board prior to the industry collapse in ing 5.6 percent of Lear’s shares tomers.” residents along Woodward and the agreed to allow Cayman Islands- 2009, he said. Birmingham corridor represent a based activist investor Alden Glob- outstanding, think that Lear is “The U.S. auto parts sector is strong customer profile for Scott al Capital to place two members on undervalued and that manage- fairly ‘overcapacitized’ relative Branching out Shuptrine, Yost said. the board — adding a seat and as- ment isn’t using its $1.4 billion of to history,” Brinkman said. suming the one vacated by cash effectively. “There is definitely the capacity Art Van’s move into the Chicago Art Van plans to open three more William Redmond Jr., who Lear responded by announcing to do more, and the shareholders area will precede its first store open- store-in-store showrooms for the stepped down over the matter. an accelerated buyback program have been very public about ings in Ohio. brand at its Art Van stores in Novi, The battle eventually led to and raised its quarterly dividend this, really prompting Lear to The company is set to open four Shelby Township and Ann Arbor be- the resignation of CEO Don Steb- to 17 cents a share from 14 cents. act more aggressively.” Pure Sleep mattress stores in Toledo tween this fall and next spring, for an bins in August of last year and Lear also said it would buy $600 For instance, if Lear did follow between this fall and next spring and investment of about $1 million each, the sales of Visteon’s climate million of its own shares this investor demands and upped the in September will open its first furni- Yost said. They join store-in-store control business to its South Ko- year as part of its $1 billion share repurchase program to $2 billion ture store in Ohio: a 90,000-square- showrooms at Art Van stores in War- rean joint venture Halla Climate repurchase program. from $1 billion, Lear’s debt-to- foot showroom in the Toledo suburb ren, Grand Rapids and Petoskey. Control Corp. But that wasn’t enough for the EBITDA margin would hit the of Springfield Township. The goal is to grow Shuptrine to $20 Of the activist activity tracked two investors, which on Feb. 12 sector average of 1.6X, Brinkman The stores will create an estimated million in annual revenue from its in the Activist Insight report, 23 sent a letter to the Lear board said. 115 jobs, Art Van said. current $3 million within 36 months, of the 135 campaigns sought to criticizing its actions. Richard Hilgert, an automotive Even as it expands into other Yost said. remove the executive, and 26 “Specifically, we believe the securities analyst for Chicago- states, Art Van is growing in its pushed for the sale or breakup of company’s current undervalua- based Morningstar Inc., said in- home state. High on high-end a company. tion reflects investors’ distaste vestors are practicing short-term It has signed agreements for three The New York City hedge fund The high-end furniture market lo- for the company’s practice of capitalism, conflicting with man- new franchises, in Gaylord, Sault Elliott Management Corp., a Com- cally has more opportunity for ex- stockpiling an increasing net agement’s long-term goals of suc- Ste. Marie and Marquette, after open- puware Corp. investor, continues pansion after closures over the past cash balance, along with con- cess. ing its first franchised locations in its hunt to take over the Detroit- several years of well-known local cern that the company may be “There will be another down- mid-January in Alpena and Mt. based company. brands including Schwark Furniture willing to make costly acquisi- turn at some point in the future Pleasant. The hedge fund, which owns 8 and Classic Interiors in Livonia and lo- tions or invest in other low-re- and companies need to have their And it looks to increase market share percent of Compuware stock, has cal store closures by companies in- turn projects at a time when the balance sheets prepared,” Hilgert in the luxury furniture segment. Art said publicly that the software cluding La-Z-Boy Inc. and Thomasville, repurchase of Lear’s underval- said. “It’s smart for all of these Van is nearing completion of a $3 mil- maker is mismanaged and offered said Tom Lias, president of Farming- ued stock would be far more ac- companies to be holding on to lion flagship showroom for Scott Shup- a $2.4 billion buyout offer. That of- ton Hills-based Gorman’s Furniture Inc. cretive to the long-term equity cash at this point because we trine on Woodward Avenue in Royal fer was rejected Jan. 24 by the Gorman’s has seen 12 percent rev- value of the company,” Marcato don’t know what’s going to hap- Oak, set to open March 7. Compuware board. enue increases in each of the past and Oskie said in the letter. pen with government, taxes and The existing Scott Shuptrine show- Since then, company has en- three years, he said. It launched a new “It is our contention that the spending; uncertainty isn’t over.” rooms within Art Van stores are about tered into a nondisclosure agree- affordable-yet-stylish furniture line, ment with Elliott allowing the company’s recent announce- Jerry Davis, a professor of 5,000 square feet each, with 26 room Intro, during that time. But the com- ment — to accelerate the pace of management at the University of settings, Yost said. hedge fund to examine nonpublic pany has also benefited from market documents. Reuters reported last its existing stock repurchase Michigan Stephen M. Ross School At 12,300 square feet, the Wood- share gains in luxury furniture. week that Compuware was in program and raise its dividend of Business, said the realities of ward showroom will give the busi- The company operates five stores talks with New York City-based — is insufficient. Simply put, we activism represent a darker real- ness space to show 60 luxury-brand in Southfield, Troy, Novi, Shelby Blackstone Group LP and Fort view Lear as dramatically over- ity where public companies dis- room settings. Township and Grand Rapids. Worth, Texas-based TPG Capital LP capitalized.” appear. Art Van bought Scott Shuptrine in “I’m very appreciative of the pow- about competing bids. Mel Stephens, senior vice presi- “Public corporations are 1987, 60 years after the high-end furni- er of Art Van marketing, but we have Activist investors are even tar- dent of communications, facilities doomed in the U.S. if this contin- ture company was formed. It closed been practicing the art of interior de- geting America’s second-largest and investor relations for Lear, ues,” Davis said. “If 5 percent (of the brand’s stores in 2002 as part of a sign and better-quality furniture for company, Apple Inc. said the company considers the ownership) is enough to get your plan to concentrate on its main brand. 73 years, with no interruptions,” Lias New York hedge fund Green- input from all of its shareholders, way, this may suggest a larger Scott Shuptrine features higher- said. light Capital Inc. sued Apple this but also defended management’s trend that public markets are quality, more-expensive furniture “I guess time is going to tell month in U.S. District Court in approach. unattractive, especially if man- and consultation with designers as whether or not their (Scott Shup- New York in an attempt to force “The company has a balanced agement can’t pursue the strate- part of the buying process. When Art trine) format is going to resonate Apple to return a chunk of its strategy to create value,” he gies they want without divisive Van brought the brand back in 2010, with customers.” $137 billion in cash to sharehold- said. “That involves investing in action.” it planned to open a flagship show- Sherri Welch: (313) 446-1694, ers. our business, maintaining a Dustin Walsh: (313) 446-6042, room, Yost said. [email protected]. Twitter: @sherri- Greenlight is attempting to strong balance sheet and return- [email protected]. Twitter: “We have been waiting for a loca- welch block Apple’s proposal to elimi- ing cash to shareholders.” @dustinpwalsh 20130225-NEWS--0021-NAT-CCI-CD_-- 2/22/2013 5:39 PM Page 1

February 25, 2013 CRAIN’S DETROIT BUSINESS Page 21 Compuware: Board’s IT IQ called into question www.crainsdetroit.com EDITOR-IN-CHIEF Keith E. Crain ■ From Page 1 GROUP PUBLISHER Mary Kramer, (313) 446-0399 or [email protected] Cohn said the Compuware based BMC Software. It eventually ASSOCIATE PUBLISHER Marla Wise, (313) 446- 6032 or [email protected] board contrasts sharply with the settled for two spots. COMPARING THE BOARDS EXECUTIVE EDITOR Cindy Goodaker, (313) 446- makeup of other publicly traded IT In 2011, after a proxy fight with 0460 or [email protected] companies whose board members Boston-based Iron Mountain, an Here are comparisons between No. of independent members MANAGING EDITOR Jennette Smith, (313) 446- Compuware’s board of directors with extensive technology 1622 or [email protected] often have either professional IT information management compa- MANAGER, DIGITAL CONTENT STRATEGY Nancy and those of some other publicly background: 10 Hanus, (313) 446-1621 or [email protected] backgrounds or represent venture ny, Elliott ended up with a spot on traded information technology Annual independent member DEPUTY MANAGING EDITOR Daniel Duggan, (313) capital companies or private equi- the board of directors and got the 446-0414 or [email protected] companies, based on their most compensation: $75,000, plus ty companies that consider it their company to replace its CEO, Bob SENIOR EDITOR Bob Allen, (313) 446-0344 or recent proxy statements: $2,000 per meeting, $15,000 to [email protected] mission to provide a strong, inde- Brennan. Compuware Corp. (Nasdaq: CPWR) $30,000 for on committee WEST MICHIGAN EDITOR Matt Gryczan, (616) 916- pendent voice (See box, Page 21). In 2009, after a takeover bid, El- 8158 or [email protected] Board size: 11 participation, $187,500 in stock SENIOR EDITOR Gary Piatek, (313) 446-0357 or Ten of Compuware’s 11 mem- liott got two seats on the board of [email protected] Average age: 65 awards, with total compensation bers have strong ties to Detroit. Dublin, Calif.-based Epicor Software ranging from $282,500 to SENIOR DESIGNER Jeff Johnston, (313) 446-1608 Independent members: 8 or [email protected] The exception is William Grabe, Corp. $335,500. DATA EDITOR Brianna Reilly, (313) 446-0418, managing director of General At- “I’m not surprised at all with No. of independent members [email protected] with extensive technology WEB PRODUCER Norman Witte III, (313) 446- lantic LLC, a private equity firm in this takeover bid by Elliott. The 6059, [email protected] background: 2 Informatica Corp. (Nasdaq: INFA) Greenwich, Conn. Compuware board is an ideal can- EDITORIAL SUPPORT (313) 446-0419; YahNica Board size: 9 Crawford, (313) 446-0329 Three of the didate for what not to do with your Annual independent member compensation: $52,500 cash Average age: 61 NEWSROOM (313) 446-0329, FAX (313) 446- board’s 11 mem- 1687 TIP LINE (313) 446-6766 board,” said Sudip Datta, interim grants, $7,500 to $30,000 for Independent members: 8 bers work for chairman and a professor in the REPORTERS serving on or chairing committees, No. of independent directors with Compuware: department of finance at the Wayne Jay Greene, senior reporter: Covers health care, $140,000 in restricted stock, with extensive technology background: 7 insurance, energy utilities and the environment. CEO Bob Paul, State University School of Business (313) 446-0325 or [email protected] total compensation ranging from Annual independent member Chairman and Administration. $198,488 to $230,238. Chad Halcom: Covers litigation, higher education, compensation: $50,000 in cash, non-automotive manufacturing, defense co-founder Peter “There are several things that $5,000 to $20,000 for committee contracting and Oakland and Macomb counties. Karmanos Jr. stand out for me,” Datta said. (313) 446-6796 or [email protected] Autodesk Inc. (Nasdaq: ADSK) participation, 15,000 shares in Tom Henderson: Covers banking, finance, and W. James “One, it’s an inside board. It’s too Board size: 9 stock options, 5,000 shares of technology and biotechnology. (313) 446-0337 or Prowse, CFO of parochial. It’s too Detroit-centric. restricted stock, with total [email protected] Average age: 58 Kirk Pinho: Covers real estate and the city of Covisint LLC, a These board members play in the compensation ranging from Detroit. (313) 446-0412 or [email protected] Paul Independent members: 8 Compuware same sandbox with the same social $388,520 to $433,520. Bill Shea, enterprise editor: Covers media, No. of independent members advertising and marketing, the business of sports, subsidiary. connections. You have to be wor- and transportation. (313) 446-1626 or with extensive technology Of the eight ried that there are social connec- Iron Mountain Inc. (NYSE: IRM) [email protected] background: 7 Nathan Skid, multimedia editor. Also covers the independent tions that make true independence food industry and entertainment. (313) 446-1654, Annual independent member Board size: 13 board members, impossible. [email protected] compensation: various Average age: 61 Dustin Walsh: Covers the business of law, auto only two — “Two, you definitely need more combinations of cash, stock and Independent members: 11 suppliers and steel. (313) 446-6042 or Grabe, a former board members with a background [email protected] stock options, with total No. of independent directors Sherri Welch: Covers nonprofits, services, retail marketing man- in IT or finance. And it’s too big. It compensation ranging from with extensive tech background: 6 and hospitality. (313) 446-1694 or ager at IBM has 11 members. It’d be better off $313,270 to $763,437. [email protected] Annual independent member LANSING BUREAU Corp., and Ralph with eight or nine. There’s acade- compensation: $99,970 in stock Chris Gautz: Covers business issues at the Capitol Szygenda, for- mic literature on board size and ef- and utilities. (517) 403-4403 or [email protected]. Karmanos BMC Software Inc. (Nasdaq: BMC) awards plus varying cash grants, mer chief infor- fectiveness, and the larger board Board size: 13 with total compensation ranging ADVERTISING mation officer at you have, the harder it is to be Average age: 59 from $131,080 to $200,470. SALES INQUIRIES: (313) 446-6052; FAX (313) General Motors nimble and make quick, hard deci- 393-0997 Independent members: 12 Corp. — have ex- sions. SALES MANAGER: Tammy Rokowski Riverbed Technology Inc. (Nasdaq: SENIOR ACCOUNT EXECUTIVE: Matthew J. tensive back- “The last thing that jumped out No. of independent members with extensive technology RVBD) Langan grounds in tech- at me is the ages of these directors. ADVERTISING SALES Christine Galasso, Dale background: 10 Board size: 8 nology. With an IT company especially, Smolinski, Sarah Stachowicz Annual independent member Average age: 53 CLASSIFIED SALES (313)-446-0351 Proxy state- you’d want a younger board.” compensation: $50,000 cash, plus No. of independent members: 6 EVENTS DIRECTOR Nicole LaPointe ments from six As of last July, when Com- $7,000 to $45,000 for committee No. of independent directors DIRECTOR, INTEGRATED MARKETING Eric Cedo other publicly puware issued its most recent participation, $288,000 in with an extensive technology SALES PROMOTION MANAGER Karin Pitrone traded IT com- proxy statement, the board had an restricted stock options, with total background: 6 ASSISTANT EVENTS MANAGER Kacey Anderson Prowse SENIOR PRODUCER FOR DIGITAL/ONLINE panies — Au- average age of 65. Grabe was the compensation ranging from Annual independent member todesk Inc., BMC Software Inc., Cisco oldest board member at 74; Paul $368,899 to $403,899. PRODUCTS Pierrette Dagg compensation: $30,000 cash, MARKETING ARTIST Sylvia Kolaski Systems Inc., Informatica Corp., Iron the youngest, was 50. Price was 72; $5,000 to $20,000 for committee SALES SUPPORT Suzanne Janik, YahNica Crawford Mountain Inc. and Riverbed Technolo- Romney, 71; Archer, 70; Prowse Cisco Systems Inc. (Nasdaq: CSCO) participation, 6,000 shares of PRODUCTION MANAGER Wendy Kobylarz gy Inc. — show a sharp contrast. Of and Karmanos, each 69; Bedi, 64; Board size: 13 restricted stock, with total PRODUCTION SUPERVISOR Larry Williams their total of 57 independent board Szygenda, 63; Nelson, 59; and Hen- Average age: 60 compensation ranging from CUSTOMER SERVICE members, 46 have extensive IT or derson, 53. $266,000 to $282,099. MAIN NUMBER: Call (877) 824-9374 or write Independent members: 12 — Tom Henderson [email protected] technology backgrounds. The average age at the six public SUBSCRIPTIONS $59 one year, $98 two years. The other independent Com- IT companies Crain’s looked at Out of state, $79 one year, $138 for two years. Outside U.S.A., add $48 per year to out-of-state puware board members are former was just shy of 59. more valuable strategic contribu- Elliott, pending the signing of a rate for surface mail. Call (313) 446-0450 or Detroit Mayor Dennis Archer; The board’s age could play into tions if its independent members nondisclosure agreement, Cohn, (877) 824-9374. Faye Alexander Nelson, president the argument made by Joe Nathan, SINGLE COPIES: (877) 824-9374 have industry expertise. This the Elliott portfolio manager, told REPRINTS: (800) 290-5460, ext. 125; and CEO of the Detroit Riverfront a former Compuware president board needs more relevant strate- Crain’s that he was pleased with (717) 505-9701, ext. 125; or lindsay.wilson Conservancy; Glenda Price, retired and COO who is now managing @theygsgroup.com gic experience and more geograph- Paul’s response and the response TO FIND A DATE A STORY WAS PUBLISHED: president of Marygrove College and partner of a Troy-based invest- (313) 446-0406 or e-mail [email protected] ic diversity.” of the Compuware board. He de- current president of the Detroit ment firm, Insight Technology Capi- Said Cindy Schipani, a professor clined to elaborate on previous CRAIN’S DETROIT BUSINESS IS PUBLISHED BY Public Schools Foundation; Fritz tal Partners LP. At the time of El- of business law at the Ross school CRAIN COMMUNICATIONS INC. Henderson, former GM president liott’s offer, Nathan told Crain’s criticisms. CHAIRMAN Keith E. Crain whose primary area of research is Last Tuesday, Elliott filed a re- PRESIDENT Rance Crain and COO; Gurminder Bedi, a for- that a major reason for Com- corporate governance and the rela- TREASURER Mary Kay Crain mer vice president of Ford Motor puware’s recent underperfor- port with the U.S. Securities and Ex- Executive Vice President/Operations tionship among board members, William A. Morrow Co.; and G. Scott Romney, Mitt mance was its slowness to capital- change Commission that it had company officers and sharehold- Vice President/Production & Manufacturing Romney’s brother and a partner in ize on social media and mobile signed the nondisclosure agree- Dave Kamis ers: “When you look at the makeup Chief Information Officer the Detroit law firm Honigman technology. ment. of the board, you worry if it’s not Paul Dalpiaz Miller Schwartz and Cohn LLP. James Westphal, a professor at Elliot Sloane, a public relations Chief Human Resources Officer too cozy with management to ask Lisa Elkin, a senior vice presi- the Stephen M. Ross School of Busi- expert in New York that Elliott Margee Kaczmarek the hard questions. Will they call G.D. Crain Jr. Founder (1885-1973) dent for marketing and communi- ness at the University of Michigan, Management hired to manage Mrs. G.D. Crain Jr. Chairman (1911-1996) executives out when they need to cations at Compuware, declined to said the Compuware board “looks communications about the Com- EDITORIAL & BUSINESS OFFICES: be called out? 1155 Gratiot Ave., Detroit MI 48207-2732; comment Friday but had defended like an old-fashioned board in its puware takeover bid, said the (313) 446-6000 the board in December, saying it composition. The members are “This board is particularly ho- hedge fund would study the finan- Cable address: TWX 248-221-5122 AUTNEW DET mogenous. It’s not geographically CRAIN’S DETROIT BUSINESS ISSN # 0882-1992 was “a highly qualified and inde- older, and they seemed to be more cial information it gets before de- is published weekly, except for a special issue the pendent board that takes its fidu- based on social and civic ties than diverse. It’s mostly local folks. ciding whether to make an offer third week of August, and no issue the third week of December by Crain Communications Inc. at ciary duty very seriously.” on strategic experience. Community-minded members are that tops its original $11 a share. 1155 Gratiot Ave., Detroit MI 48207-2732. great, but a public company is Periodicals postage paid at Detroit, MI and But local experts on public com- “It’s the kind of board you saw When asked whether Elliott had additional mailing offices. POSTMASTER: Send panies and their management are in the 1980s or 1990s, but it’s gotten broader than a single community. talked with Compuware about get- address changes to CRAIN’S DETROIT BUSINESS, You need more members who are Circulation Department, P.O. Box 07925, Detroit, also critical of the makeup of Com- to be passé. You’re looking for ting a spot or spots on the board or MI 48207-9732. GST # 136760444. Printed in puware’s board and say they ex- more independent boards now,” versed in high-tech for companies whether Elliott would launch a U.S.A. Entire contents copyright 2013 by Crain pect Elliott to demand changes. said Westphal, who teaches gradu- like this. … It doesn’t look like the proxy fight to get board represen- Communications Inc. All rights reserved. ate-level courses on strategic man- Compuware board has the techni- Reproduction or use of editorial content in any Demanding changes would fit tation, Sloan said, “We are not go- manner without permission is strictly prohibited. Elliott’s track record. agement and organizational be- cal expertise you’d want.” ing to comment.” Last year, the hedge fund havior. After CEO Paul said in January Tom Henderson: (313) 446-0337, launched a proxy fight seeking “There’s been a number of stud- that he would provide nonpublic [email protected]. Twitter: five spots on the board of Houston- ies that show that a board makes materials and financial figures to @tomhenderson2 20130225-NEWS--0022-NAT-CCI-CD_-- 2/22/2013 6:09 PM Page 1

Page 22 CRAIN’S DETROIT BUSINESS February 25, 2013 RUMBLINGS WEEK ON THE WEB FROM WWW.CRAINSDETROIT.COM, WEEK OF FEB. 16-22

tracting young talent to live Manges was the Lions’ as- tion, housing, business and and work in the city, has Ownership deal sistant director of media re- employment. The report, also put out a call for its sec- lations. 7.2 SQ MI, is at www. Sign a shirt, ond cohort of fellows. It’s detroitsevenpointtwo.com. taking applications until could imperil Records show 47 per- March 3 at www.challenge COMPANY NEWS cent of the owners of De- detroit.org/application.php. The Calabasas Hills, troit’s 305,000 properties newspaper jobs Calif.-based The Cheesecake failed to pay their tax bills show Detroit Feet in Ford’s door Factory Inc. chain is coming last year, The Detroit News he Journal Register to Twelve Oaks Mall in Novi. reported. The News also said The Michigan Economic De- Co. submitted to the No opening date has been an audit found the city’s velopment Corp. is looking to T Michigan Workforce specified. property tax system riddled school pride play matchmaker between Development Agency a notice Detroit-based Lakeshore with errors and waste. Michigan-based companies under the federal Worker TolTest Corp. agreed to a A Comerica Bank report traveling exhibit Compuware Building and the and Ford Motor Co. in an in- Adjustment and Retraining $5 million settlement with predicts modest economic that features more Detroit Historical Museum. vite-only event next month. Notification Act that its 844 the Detroit Water and Sewer- growth for the metro Detroit A than 40 T-shirts with The first tour runs April The MEDC’s Pure Michi- employees in the state could age Department to avoid civ- statistical area, projecting photographs of Detroit Public 29 through May 28 at the De- gan Business Connect pro- be laid off because of an il liability as a city contrac- employment increases in Schools and signatures of troit Public Library main gram will host a Ford pro- ownership change for the tor connected to the public each 2013 quarter. prominent former students branch. Williams said a sev- curement summit March 21 news media company. corruption trial of former Detroit was among 35 is set to kick off in April. en-day showing at the Com- at the Ford Conference and A U.S. Bankruptcy Court Mayor Kwame Kilpatrick. cities to receive a letter from “Signatures: a Collection puware Building atrium is Event Center in Dearborn. in New York is to decide on Also, the DWSD Board of Wa- the U.S. Olympic Committee of Autographs from Proud in the works for this sum- Ford and 30 automotive a reported $120 million deal ter Commissioners and Wal- gauging interest in hosting DPS Alumni” features im- mer. and non-automotive suppli- for Yardley, Pa.-based Jour- bridge Aldinger Co. agreed the 2024 Summer Games and ages of schools currently More info can be found at ers, among them Robert nal Register to be sold to not to sue each other, after a Paralympic Games. operating, closed or ones www.schoolshirtshop.com. Bosch LLC, Delphi Automotive 21st CMH Acquisition Co., contentious city review of SkySpecs LLC, a team that have been razed. plc, Team Detroit and Lear managed by JRC’s owner, contractors connected to of graduate students from Before the traveling ex- Encore for fellows program Corp., are seeking meetings New York City-based inter- the Kilpatrick case. the University of Michigan, hibit begins, alumni from with vendors with a variety national hedge fund Alden The new owner of the won a $50,000 prize for every DPS high school of The Detroit Revitalization of specialties. Global Capital LLC. JRC Livonia-based Awrey Bak- work on unmanned aerial any graduating class are Fellows Program is recruit- Trevor Pawl, Pure Michi- owns the Oakland Press in eries chain said it will try to vehicle technology. welcome to sign their name ing employers and fellows gan Business Connect di- Pontiac, the Macomb Daily rehire many of its 150 laid- Detroit-Windsor Tunnel on their school’s shirt at nu- for its second cohort, which rector, said a team of pur- in Mt. Clemens, The Daily off employees, The Detroit staff will stop selling to- merous signing events. begins its work in August. chasers from Ford and the Tribune in Royal Oak, the News reported. The compa- kens Thursday, but those Michael Williams of School The program, adminis- suppliers will choose com- Heritage Newspapers down- ny will become Minnie Marie still with tokens can re- Shirt Shop, a website that tered by Wayne State Universi- panies for one-on-one inter- river and other newspapers Bakeries but preserve the deem them through Dec. 31. sells posters, T-shirts and ty with additional funding views. in Michigan. Awrey brand. In an open letter on the various memorabilia of the from several foundations, is “I look at it like a job in- Colliers International Inc. county website, Oakland schools, is behind the exhib- working to build the capaci- terview process. You apply, ON THE MOVE is moving five brokers into County Executive L. Brooks it. ty of organizations focused get the call and a first inter- a new 1,500-square-foot of- Patterson said recent state- He said more than 5,000 on real estate, finance, land view,” he said. “All we are Detroit fice in downtown Detroit at ments by Gov. Rick Snyder signatures from DPS alum- use and community, eco- doing is setting up the first Deputy the Madison Office Building and state Insurance Com- ni have been collected, dat- nomic and workforce devel- interview, getting compa- Mayor Kirk at 1900 St. Antoine St. missioner Kevin Clinton in fa- ing back as far as the Red- opment. nies in the door.” Lewis re- Champion Steel Inc. vor of changing Michigan’s ford High School class of 1937. Fellows are placed in two- More than 500 companies signed. moved 16 employees from a no-fault auto insurance sys- The event is open to any year positions that can en- have already applied to at- Lewis, 52, 17,000-square-foot building tem are “inflammatory and graduate, but some notable hance Detroit, are assigned tend the event — which is had been in Fraser to a 36,000-square- lack factual evidence.” Detroiters signed their a mentor and a professional expected to feature a pre- deputy foot space in Troy. After 68 years as a dry names on their respective coach, take three study sentation in the morning mayor since The Michigan Office of city, Oak Park is consider- school’s shirt, as well. trips around the country followed by the one-on-one March 2012. Lewis Financial and Insurance Reg- ing letting restaurants sell Among them: attorney Sam and meet monthly to learn meetings in the afternoon. Eric Larson, founder, ulation said the AMEZ United beer and wine. Its City Bernstein, Mumford; Motown more about leadership and To apply, go to president and CEO of Credit Union in Detroit was Council will revisit the is- singer and city council efforts to revitalize the city. puremichiganb2b.com. Bloomfield Hills-based Lar- shut down. sue March 4, AP reported. member Martha Reeves, Employers receive a son Realty Group, was Detroit’s DTE Energy Co. Former Wayne County Northeastern; Kwame and stipend to help defray the ITS IECES named co-managing part- moved to fifth in 2012, from technology manager Zayd Bernard Kilpatrick, Cass Tech cost of a fellow’s salary. B & P ner for Bedrock Real Estate 13th in 2011, among Midwest Allebban was convicted of and Northern; and longtime Last year, 29 fellows were Donald Trump will be the Services LLC, the real estate “large segment” electric obstructing justice in U.S. schools administrator John accepted into the program. keynote speaker for the arm of Rock Ventures LLC. utilities in a J.D. Power and District Court, AP reported. Telford, Denby. WSU is accepting applica- Oakland County Lincoln Steve Berlage was Associates business cus- A report from the After the signing events, tions until March 6 for fel- Day Dinner May 21 at the named president and COO tomer satisfaction study. Michigan Economic Center each shirt will be enclosed lows and employers at Suburban Collection Show- of Detroit-based Sachse Con- A state House commit- said the public supports in acrylic boxes and then wayne.edu/detroitfellows. place in Novi. Tickets are struction. Todd Sachse, the tee approved bills to over- raising taxes on business- travel to area museums, Challenge Detroit, a na- $75 each and $650 for a table previous president, will re- haul Blue Cross Blue Shield es, and the wealthy, to pay shopping malls and office tional initiative working to of 10. For details, visit main CEO and owner. of Michigan, leaving out for basic state government complexes, including the revitalize the city by at- www.oaklandgop.net. Berlage, 53, was vice presi- anti-abortion provisions functions and investments dent and general manager of that torpedoed an earlier ef- in education, transporta- the Michigan and Toronto fort to change the status of tion and other key areas. offices of New York City- the state’s largest insurer, Four unions represent- based Turner Construction Co. AP reported. ing state employees are Detroit-based American Maryland-based de- asking the Michigan Court of Axle & Manufacturing Hold- fense contractor Lockheed Appeals to declare that the ings Inc. hired Terry Woy- Martin Corp. could pay $19.5 new right-to-work law, BEST FROM THE BLOGS chowski, a retired General which takes effect March million to a class of in- READ THESE POSTS AND MORE AT WWW.CRAINSDETROIT.COM/BLOGS Motors Co. executive who is vestors led by the City of 27, won’t affect them, the president of the Engineering Pontiac General Employees Lansing State Journal and 4 more years for Snyder? More stores going wireless Society of Detroit, to lead its Retirement System under a MLive.com reported. engineering activities. proposed settlement to a Michigan film produc- Gov. Rick Snyder Several retailers The Detroit Lions hired lawsuit alleging the compa- ers and some lawmakers has“ not made his with“ stores in Michigan Jennifer Cadicamo as vice ny knowingly overstated said they will lobby to main- intentions known are moving away from president of marketing and its outlook for investors. tain the state’s $50 million whether he will run for a traditional cash partnership activation, film credits cap, which second term. But his registers to mobile or Wade Martin as vice presi- could be cut 50 percent un- chief of staff, Dennis wireless point-of-sale dent of corporate partner- OTHER NEWS der Gov. Rick Snyder’s bud- Muchmore, certainly systems that enable ships, and Ben Manges as get proposal, AP reported. hinted at such. customers to use Downtown Detroit is at director of corporate com- cellphones or tablets to nearly 80 percent commer- Gov. Rick Snyder said he ” pay for purchases. munications. Cadicamo cial occupancy, said a re- might choose a Michigan had been a senior director port by the Hudson-Webber Supreme Court justice in the Capitol Correpondent Chris Gautz’s blog on Lansing Reporter Sherri Welch’s “What’s in Store” blog about” at Detroit-based ePrize Inc., Foundation that takes a next month, AP reported. subjects can be found at retail is found at www.crainsdetroit.com/retailblog Martin worked for the data-driven dive into the The vacancy was left by Di- www.crainsdetroit.com/gautz Cincinnati Bengals, and downtown area in popula- ane Hathaway’s resignation. DBpageAD_DBpageAD.qxd 1/29/2013 12:58 PM Page 1

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