Business Digest


January 10, 2003

In The Region

Stern ad agency wins account for Hyatt in Cambridge

The Stern Agency announced this week that it has won the advertising account for Maryland's new 400-room Hyatt Regency Chesapeake Bay Resort on the Eastern Shore.

The Columbia agency will promote the resort, which opened in Cambridge in August, to both leisure travel and group audiences. Billings for the account are not being disclosed.

The advertising campaign is expected to kick off during the first quarter. Stern's current client roster includes: Atlantic Coast Airlines, Maryland Public Television, the University of Maryland and Goodwill Industries of Washington.

Hertsch named head of Morris & Ritchie

Morris & Ritchie Inc., the Abingdon engineering and architectural firm, has named Frank F. Hertsch as its president.

Hertsch replaces Robert F. Bradley, who is pursuing other career opportunities.

Hertsch formerly was a principal and an owner of MRA and its affiliate Geo-Technology Associates Inc.


CVS settles claims it failed to fully fill drug prescriptions

Drugstore chain CVS Corp. said yesterday that it has reached a settlement with several states over billing practices for so-called "partial-fill" prescriptions.

Under the settlement, CVS agreed to pay $1.1 million to be divided among 18 states, including Maryland, and the District of Columbia. Maryland's share of the settlement is $48,966, the state attorney general's office said.

A partial-fill prescription occurs when a pharmacy only partly fills a prescription because it doesn't have the full amount of medication. However, patients are sometimes billed for the entire amount.

Such billing is alleged to have taken place before 1998, when CVS instituted procedures to address the industrywide problem.

Rigases seek Pa. jury trial, but judge sets trial in N.Y.

Lawyers sought a home court advantage for the Rigas family yesterday, indicating they plan to ask for a Pennsylvania jury to decide if their clients carried out one of the largest corporate frauds in U.S. history at cable company Adelphia Communications Corp.

U.S. District Judge Leonard B. Sand did not react warmly to the suggestion as he set a trial date for Jan. 5, 2004, in New York. He said it seemed that the lawyers were trying to move the case to the "home base of Adelphia."

The defendants, all of whom have pleaded innocent, include John J. Rigas, the 78-year-old patriarch who founded Adelphia, his two sons and another former executive.

They are preparing for trial on charges they looted corporate accounts, built a golf course with company money and used corporate jets for personal reasons while burdening the company with huge debts and lying to investors.

Bankruptcy judge OKs auction of Conseco unit

A bankruptcy judge has approved plans for an auction to sell Conseco Inc.'s money-losing finance unit, a step that would help the insurance and finance company raise cash to pay creditors owed $6.5 billion.

The Feb. 28 auction of Conseco Finance Corp. of St. Paul, Minn., will come more than two months after its Indiana parent became the third-largest company to file for bankruptcy protection. Conseco expects to emerge from Chapter 11 by this spring.

The Chicago bankruptcy judge approved auction plans for Conseco Finance, the nation's largest mobile-home lender and a provider of other financial products.

Meanwhile, a group of creditors that failed to agree with Conseco on its reorganization plans have won formal representation in the Chapter 11 case.

Wachovia reported in talks to buy securities business

Wachovia Corp., the nation's fourth-largest bank, is in talks to buy Prudential Financial Inc.'s securities business, a purchase that would nearly double its brokerage business, people familiar with the negotiations told Bloomberg News.

Prudential is seeking to sell a business that has lost almost $300 million in the 21 months that ended Sept. 30 and is expected to report a loss of $28 million for 2002. Wachovia, which traditionally has sold home loans and mutual funds, wants to expand its brokerage network.

The transaction would create a securities firm controlled by Wachovia in which Prudential would retain a minority stake. Prudential would receive no cash in the transaction, the people said. Earlier talks between the companies on a joint venture broke down over the issue of which company would be in control.

Holders of Tyco debt to be paid in cash

Tyco International Ltd. will pay holders of convertible debt due in February 2021 in cash starting Tuesday until Feb. 12, when the holders are allowed to demand payment, as the conglomerate reduces its more than $11 billion in debt due this year.

Tyco, the biggest maker of undersea fiber-optic cable, valves and connectors, had already purchased part of $2.3 billion in outstanding convertibles beginning last year, leaving the $1.85 billion balance, a spokesman said. The company had the option to pay with shares or a combination of cash and stock but chose cash. The stock fell 71 percent last year.

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