In the Region Redmer recuses self from consideration of...

BUSINESS DIGEST

February 13, 2002

In the Region

Redmer recuses self from consideration of CareFirst proposal

Del. Alfred Redmer Jr., the House of Delegates' minority leader, said yesterday that he will not participate in consideration of any legislation dealing with the proposed conversion of CareFirst BlueCross BlueShield to a for-profit company owned by WellPoint Health Networks of California.

Redmer said he decided to recuse himself last week after the General Assembly's ethics committee raised questions about whether his employment by Dallas-based Benefitmall might pose a conflict of interest. The company does an estimated $300 million in business with CareFirst.

The Baltimore County Republican said his employer did not want to release proprietary information necessary to answer some of the committee's questions. WellPoint is offering $1.3 billion to buy CareFirst in a deal that has prompted many bills dealing with the transaction and the nonprofit's future.

FTC Consulting profit rises 78% in 4th quarter

FTI Consulting Inc. said yesterday that its fourth-quarter earnings grew to $4.8 million, thanks partly to increased revenue in its financial consulting division.

Earnings at the Annapolis provider of turnaround, bankruptcy and litigation-related consulting services rose nearly 78 percent from $2.7 million in the 2000 fourth quarter. The $2.7 million does not include an extraordinary item related to extinguishing debt.

After adjusting for a 3-for-2 stock split effective Jan. 2, fourth-quarter earnings per share were 23 cents on a fully diluted basis, compared with 17 cents in the 2000 fourth quarter before the extraordinary charge.

Elsewhere

Conseco to drop unit, leave 40,000 seeking new health coverage

Debt-burdened Conseco Inc. will eliminate its last major medical insurance unit, costing 445 employees their jobs and leaving 40,000 customers in 20 states looking for new coverage.

Applications for new coverage through Pioneer Life Insurance, Washington National Insurance and Conseco Medical Insurance will be denied beginning March 1. Customers will receive six months notice of their policies' termination. Most will be void by Sept. 15.

The financial services company had been looking for a buyer for Conseco Medical Insurance Co., but couldn't agree on a deal, said Brad Wolfram, the unit's senior vice president of operations.

Qualcomm re-elects director with Enron ties

Qualcomm Inc. shareholders re-elected director Frank Savage, rejecting labor and pension group opposition to his role as a director of Enron Corp., the energy trader that filed the largest bankruptcy in U.S. history.

The vote was announced yesterday at the annual shareholders' meeting in San Diego of the company that licenses patents for mobile phones. Savage and four other directors were re-elected to three-year terms with more than 95 percent of the vote, Chief Executive Officer Irwin Jacobs said.

The California Public Employment Retirement System, which owns 3.45 million Qualcomm shares, and the AFL-CIO labor federation were among groups opposing Savage's election, mainly because of his Enron duties.

Qwest to supply Morgan with voice, data services

Qwest Communications International Inc., the top phone company in 14 western U.S. states, agreed yesterday to provide voice and data services to J.P. Morgan Chase & Co., the second-biggest U.S. bank.

The multiyear, multimillion-dollar contract covers J.P. Morgan's offices in 50 countries, Qwest said in a statement. The Denver-based company didn't provide details.

SunTrust Banks to end 60-year tie with Andersen

SunTrust Banks Inc. said yesterday that its board of directors decided to dump Arthur Andersen LLC, which is under fire for its role in the Enron Corp. collapse, as its auditor after a 60-year relationship.

The Atlanta-based bank said PricewaterhouseCoopers will audit its results for 2002.

SunTrust began reviewing its auditing account in April, and the decision was not a direct result of Andersen's work for Enron, a spokesman said. Enron filed for bankruptcy protection Dec. 2 amid a tangle of questionable accounting practices.

Janus ended investments in Enron by close of '01

Janus Capital Corp., one of Enron Corp.'s biggest shareholders with a 5.6 percent stake before the energy trader's collapse, ended the investment by the end of last year, a regulatory filing said yesterday.

Denver-based Janus, the mutual fund manager owned by Stillwell Financial Inc., reported holding no Enron shares as of Dec. 31 in a filing with the Securities and Exchange Commission. The filing, a short-form Schedule 13G used by passive and institutional investors, didn't disclose transaction details.

Enron was one of the largest holdings at Janus, composing 1.5 percent to 2.4 percent of the fund group's stock holdings from mid-1999 through last June.

Krispy Kreme to change accounting method

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