Business Digest

BUSINESS DIGEST

February 15, 2005

In the Region

Rosemore is adding $45 million to Crown pension plan

Rosemore Inc., the family-owned Baltimore holding company whose Crown Central Petroleum Corp. subsidiary is selling its assets, has agreed to strengthen the oil refiner's pension plan, according to the Pension Benefit Guaranty Corp.

As a result of an agreement between Rosemore, Crown and the federal pension insurer, the oil refiner will contribute $45 million more to the pension plan by the end of 2005 than required by the law. The agreement provides additional protection for about 3,000 Crown workers and retirees in the plan, according to the government agency that guarantees pension benefits earned by 44 million workers and retirees.

The Crown Central Petroleum Retirement Plan has $128 million to cover benefit liabilities of $241 million. Crown started selling assets in 2003, including service stations and storage terminals. Last month, it sold a refinery in Pasadena, Texas. It has a smaller refinery for sale in Tyler, Texas.

Former BACVA official to head convention sales

The Baltimore Area Convention and Visitors Association said yesterday that it has hired Ronnie L. Burt of Starwood Hotels and Resorts as vice president of convention sales and services, a critical position in the association's efforts to boost business at the Baltimore Convention Center and city hotels.

The senior management job, last held by Dan Lincoln, has been vacant since October 2003. The association had been unable to find a replacement through a national search firm. Leslie R. Doggett, the association's president and chief executive, consulted with a local search committee after Burt expressed interest in the job.

Burt, account director at the Westin Peachtree Plaza in Atlanta for nearly three years, had formerly worked at the visitor association's director of national accounts from November 1999 to April 2002.

Lockheed wins Navy pact to update sonar on subs

Lockheed Martin Corp. of Bethesda, the top U.S. defense contractor, won a $61 million contract yesterday to update sonar systems on Navy submarines.

Lockheed will focus on a sonar system upgrade that will improve how data is processed on all Navy submarines.

Elsewhere

U.S. suspends mail on 2 major airlines; lateness is blamed

The U.S. Postal Service said yesterday that it suspended shipments on American Airlines and US Airways Group Inc. because they didn't get the mail to destinations on time.

The air routes used to help ship first-class mail across the country were halted Saturday after a five-month analysis found consistent lateness, said John Bonafilia, who oversees commercial air operations at the Postal Service. He declined to comment on the dollar value of the contracts.

The mail shipments provide added revenue for airlines that have had four straight years of losses, most recently because of higher fuel costs and lower average fares. Lateness has been an issue since contracts with the airlines took effect in June 2003, the Postal Service said.

Fired Fannie Mae chief gets first $100,000 pension check

Franklin D. Raines, ousted in December as Fannie Mae's chief executive officer because of $9 billion in accounting errors, received his first monthly lifetime pension payment, more than $100,000, last month, the company's regulator said.

The Office of Federal Housing Enterprise Oversight, after consulting the Justice Department, also approved a February pension payment of more than $30,000 for J. Timothy Howard, who was fired as Fannie Mae's chief financial officer on Dec. 21.

The regulator also approved the release of deferred compensation for Raines and Howard, whose termination date was Jan. 31. Fannie Mae said in a December filing with the Securities and Exchange Commission that Raines was entitled to $8.7 million in deferred compensation in installments "through at least 2020," and that Howard may collect $4 million in installments through 2010.

A spokeswoman oversight agency said the awards "do not affect our ability to seek restitution" in a continuing investigation of bonuses and severance payments for Raines and Howard. A Fannie Mae spokeswoman declined to comment.

Scrushy defense seeks to blunt star witness' claims

The defense in Richard M. Scrushy's corporate fraud trial sought yesterday to poke holes in the claims of a key witness who contends that the fired HealthSouth chief executive officer was behind a scheme to overstate earnings.

Former HealthSouth finance chief William T. Owens conceded under defense questioning that Scrushy never attended big meetings of a group called "the family" that carried out the fraud and that he hadn't previously identified Scrushy as being a member.

Jurors also heard about the cloak-and-dagger mood at HealthSouth, with meetings moved to homes and cars amid worries of electronic eavesdropping. The defense also tried to refute Owens' claim that Scrushy knew a company financial announcement in 2002 was false.

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