PhillyInc

Yaromir Steiner, chief executive officer of the private Ohio-based firm that has managed the Camden Adventure Aquarium for several years, told us some interesting things last week after his Steiner+Associates announced a state-approved deal to hand off most - but not all - of its N.J. aquarium-management subsidiary to Herschend Family Entertainment Corp., which owns Philadelphia's "Ride the Ducks" buses.

Steiner said by phone that he's turning his focus to real estate development and away from running attractions like the Camden facility and another aquarium in Kentucky. (Both were included in the sale to Herschend.) Then Steiner lamented that the Delaware Riverfront boom has not yet materialized, mainly because of stifled development on the Philly side, including the unbuilt river tram. He essentially conceded that the mission of helping Camden got under his skin and it may have infulenced his business decisions.

"What happens is, you get involved in Camden, and you get emotionally attached to it, and it becomes more than a money-making venture," Steiner told us by phone from his home in New Albany, Ohio.

He said he had a tram-related escape clause, but he stuck by the business in Camden hoping for the best. And then he says this: "In retrospect, maybe we would not have done it."

So did he lose money in Camden? Does he regret the aquarium business? "We did not lose money on the deal, but we'll make more money on doing real estate."

Including in Camden. Steiner said he is not done with Camden and reportedly will continue what the Courier Post has called a "potentially lucrative role" as master developer of 27 acres of residential land north of the aquarium. The Inquirer has reported that he's working on a hotel project. But the aquarium business was tough. Steiner, who managed the aquarium through a wholly owned Camden subsidiary, has had his share of controversy including a lot of hand-wringing over his deal and the expansion costs. He came in 2004 when the facility, which is owned by the state of New Jersey, was struggling as the New Jersey State Aquarium and about to close for expansion. The state contracted Steiner's firm to revamp the facility's image and management after expansion. It reopened in 2005 as the Adventure Aquarium, with Steiner paying the state a leasing fee and retaining all door receipts, minus a small share for city taxes. It has clocked more than 2 million visitors at an average ticket price of $16.

But the best laid plans, well, you know. The tram project stalled. The Street administration in Philadelphia couldn't figure out its Penn's Landing strategy. In August Steiner let it be known he wanted to get out of the aquarium-management business. He approached Herschend about taking control of his subsidiary and asked N.J. officials to approve his plan to sell part of the subsidiary to Herschend. Herschend initially wanted full ownership but, according to Steiner, eventually relented and let Steiner keep a small share without control. The state granted its approval in mid-November. Then the deal was sealed and announced on Friday.

Neither Steiner nor CEO Joel Manby of Herschend, of Norcross, Ga. would reveal the value of their transaction. Manby said in the announcement: "We will operate business as usual, with a focus on making the operating transition as smooth and transparent as possible for the Aquariums' guests and employees." And maybe Herschend will run its Ducks buses all the way across the river, so the tram won't be needed anyway.

- Thomas Ginsberg

After living in southern California for six years, Philadelphia native Jim Sheward had had enough and jumped at the chance to move back to the Delaware Valley when he and partner Paul H. Russell decided to start the software and computer services company Fiberlink Communications Corp., a provider of software and services that allow companies to protect data on laptops from hackers while employees are working away from their offices.

That was 1994. Since then, the Blue Bell, Pa.-based company has attracted some big-name investors such as Goldman Sachs & Co. and General Electric and now employs about 230 people. Its customers include Continental Airlines and the accounting firm Grant Thornton. In an interview with PhillyInc, the 48-year-old Sheward, who is the company's CEO and a resident of Villanova, discussed his company's strategy and the obstacles faced by tech entrepreneurs in the region.

Q: Why did you decide to locate your business in the Philadelphia area?
A: I was living in California at the time. Paul Russell was living in Bucks County and working in Philadelphia. We started bi-costally (but the Philadelphia area) was a place where I felt comfortable and where my partner was already living.

Philadelphia borrowed an additional $200 million last week, prompting the three major bond-rating agencies to review the city's fiscal prognosis just in time for incoming Mayor Michael Nutter.

Standard & Poor's (rating "BBB") says the city now owes an average $5,000 per resident -- "very high" -- to pay for past projects such as the Eagles and Phillies stadiums, Mayor Street's slum clearance plan, and a 1990s attempt to bail out a city retirees' pension fund. It notes future budgets are based, in part, on yet-unbuilt casinos, payments from the troubled Philadelphia Gas Works, and flat wages for city workers in next year's contract negotiations.

Moody's Investors Service ("Baa1"): Philadelphia shows "improving, although still weak, demographic and economic trends, modest property-value growth, and a heavy burden of tax-supported debt."

Fitch Ratings Inc. ("BBB+"): The city's plan to keep cutting wage and business-privilege taxes "will require significant cost-cutting measures and revenue enhancements." Fitch analyst Jessalyn Moro commented to us further: "Philadelphia's rating is far below average. The debt load is among the highest." She said the "only real option" was to keep paying it off. The city is so deep in debt, it cannot borrow much more on a net basis: "They are pretty close to the limit."

- Joseph N. DiStefano

Wading into treacherous survey waters, again, we see that a Salary.com survey finds that CEOs of businesses with 500 or fewer employees get higher cash compensation around here than nationwide, where the median was $233,500 last year. It concludes that in New Jersey, small-company chiefs got a median of $249,359; in Pennsylvania, they got $240,000; in Delaware, they got the most, $259,000. Considering the arms race of CEO compensation, Salary.com urges small companies to lure good CEOs with "noncash" benefits. So says its survey director, Christine Midwood:

"As companies grow, so do the responsibilities and paychecks of their executives. To attract and retain the best talent, it's important for smaller companies with smaller budgets to emphasize non-cash advantages such as company equity or work/life balance."

But who knows, maybe the small-timers already get a lot of non-cash perks. You won't find out from Salary.com's survey, because it doesn't seem to count them.

- Thomas Ginsberg

James W. Hall, the new chairman and chief executive of Yardley-based Journal Register Co., soundly beat the median for mid-size companies. (See previous post on small-company chiefs' compensation). The company has told the SEC that in late November it agreed to give Hall, among other things, $675,000 a year in base salary, a bonus of up to $1.35 million next year, use of a car, lodging and travel allowances, and $33,000 a month for a "consulting" gig if and when he departs from the chief exec job.

Merck & Co. Inc.'s scientists in its research division in West Point and elsewhere have pulled off some amazing feats. In 1987, they developed Mectizan for a terrible disease called "river blindness" in Africa. Strictly in financial terms, the drug has earned little or nothing for Merck in the conventional sense. Merck almost certainly knew before marketing the drug that there would be no real profit in selling it in impoverished Africa, but it kept going anyway. If Merck had shelved the drug, like GlaxoSmithKline P.L.C. and others had to do with with their own low-profit breakthroughs, Mectizan might have become another example of the pitfalls, not successes, of the profit imperative. Remember, this was long before the Gates Foundation was around to help save the drug companies from themselves.

So Merck's marketing division pulled off a stupendous feat of its own. Completely apart from the drug's clear health benefits, the company seems to have treated Mectizan as a charity vehicle and milked it for all it's worth. It has set up and funded sophisticated donation programs and public-health efforts to distribute its drug, and donated the product to the cause. Mectizan has become the basis for corporate promotions, good press and even Merck's routine assertions that it pursues human health above all. We remember hearing Merck's executives try to defend company's handling of Vioxx by trotting out Mectizan, of all products, as if that would prove the company's inner goodness.

In P.R. terms, Mectizan has become an enormous, if immeasurable, asset for Merck. Now on Mectizan's 20th anniversary, Merck is sinking an additional $25 million into this asset. Merck, the World Bank and other aid agencies have announced a joint campaign to raise $50 million to eliminate the disease - half coming from Merck, on top of Merck's donation of the drug itself. By Merck's own reckoning, it has donated $2.7 billion worth of Mectizan since 1987. Forget the tax deductions: Imagine if every drug company had such an asset.

- Thomas Ginsberg

Verticalnet Inc., run by Nathanael Lentz, says it got another delisting warning from the Nasdaq Stock Market after falling short on one or all of three key financial qualifications (it didn't say which). But a comeback compliance plan won't help this time. Lentz's only hope is an appeal hearing. Unclear if or how a delisting may affect its planned sale to Italy's BravoSolution S.p.A. for $15.2 million.

Stop by Philadelphia City Council chambers today to hear politicians and city officials use this phrase with a straight face and not even a hint of irony. In fairness, it came up in connection with the Pennsylvania Convention Center expansion as a way to talk about minority contracts and employment without getting into the quota quagmire, with its many legal implications. In fact, the term seems on its way to becoming a euphemism for a goal somebody may or may want to meet but has no real actual legal obligation to fulfill.

Whether or not it's legal fig leaf, the term has become pretty popular everywhere lately, in part due to its recent use in pollution-emissions debates: According to the huge Nexis archive, the term "aspirational goal" was used 1,336 times in all English-language newspapers, magazines and other media so far this year. It was used just 224 times last year, 121 times in 2005, 120 times in 2004, 99 times in 2003, and so forth. Aspirational Goal seems to be a certified "buzz term" this year, while the old problems are, well, the same old problems.

Still, just looking at the words: Aren't all goals aspirational? What are non-aspirational goals?

I will clear up all my e-mails. (Yeah, when I'm 90.)

I will treat all my bosses with respect. (To their faces!)

I will manage all my employees with respect. (To their faces!)

Maybe some people set goals without any intention of trying to meet them, like mine with the e-mails. But then, those aren't goals. They're lies.

- Jane M. Von Bergen

When small businesses fell behind on their Advanta Corp. credit cards in greater numbers than expected this fall, someone had to pay. It was Christopher J. Carroll, chief credit officer since 2001 at Advanta, which is run by Dennis Alter.

Carroll was gone as of last Thursday, Nov. 29, two days after the Spring House firm -- whose shares have fallen 72 percent in the last two months -- shocked investors by commenting that its effort to gauge trends in credit quality is a "guessing game." Carroll's replacement is Chad Blue, a 10-year Advanta veteran, the company said in an SEC filing.

- Harold Brubaker

David Stout, the Philadelphia-based chief of GlaxoSmithKline P.L.C.'s pharmaceutical division, is not taking the consolation prize. He is leaving GSK, turning down a board seat and evidently leaving a pile of cash on the table after losing the oddly explicit and distracting managerial showdown with his colleagues to succeed retiring J.P. Garnier of Devon. (See Reuters here and GSK's statement is here.)

The company announced his departure last week in a statement about a board reshuffle as part of the succession plan. No word on Stout's destination. Says a spokeswoman dutifully: "He's evaluating his options."

The London Daily Telegraph had reported earlier (and so did the Times of London) that GSK had offered Stout and Chris Viehbacher, head of GSK's other HQ in North Carolina, the equivalent of about $4 million in stock and cash and board seats as retention bonuses after they lost the CEO race against Andrew Witty. Viehbacher took the board seat. Stout evidently wasn't moved by the money. Ed Silverman at Pharmalot gives some of the board ramifications of Stout's departure here.

Garnier, who apparently devised the competition, said in the statement: "I would like to thank David sincerely for his significant contribution to GSK and for the support he has given me over many years. We wish him well in his future endeavors."

- Thomas Ginsberg

Blank Rome L.L.P. has declared it wants to expand its legal services worldwide and open offices to serve major global markets. Evidently that includes Princeton. The Philadelphia-based firm said yesterday it has enticed five lawyers to defect from Saul Ewing L.L.P.'s Princeton office and open a new Blank Rome office there.

Blank Rome says partners John Pribish, Seth Lapidow, Michael Conlan, Adrienne Rogove and Virginia White will focus on general-commercial, environmental, real estate and civil litigation. (Those are all archived links at the Wayback Machine. Saul Ewing already has erased the attorneys from its current live site.)

In its statement, Blank Rome quotes Pribish, the most senior of the group, as saying: "We are excited to be joining Blank Rome at a time when the Firm is in an exciting phase of growth and expansion. We believe that the Firm's expanding national and international platform will enable us to provide greater service to and opportunities for our clients." Not clear which clients the five might be taking with them to Blank Rome.

- Chris Mondics

The Financial Times of London ran a generally admiring profile yesterday of Vanguard Group CEO Jack Brennan. FT writer Deborah Brewster talks about Brennan's long-hours-at-work philosophy and his preference for yogurt in the cafeteria. It quotes him denying he uses a "General Electric-style" rating system for employee productivity. And it has this line about his personnel management and promotion system:

He favours promotion from within on the grounds that it reduces the risk of making recruitment mistakes, particularly if you know candidates well. "I've been here so long so that I have already identified most of the really good people. I have a practice where I will tap someone on the shoulder and they will work with me for 6 months. I will have an important project and I will have them work for me, I get to see them up close, to see how they think. It's a great way to get to know people."

Another of his practices is to move managers systematically around the business. "Our former head of IT now runs our retail business. The man who runs marketing used to be our external institutional [sales] person. The man who ran Europe just came back to head internal audit. We want to round people out so they can be as effective as they can."

And it still gets voted best place to work. What's that tell you?

- Thomas Ginsberg

Allen Questrom, who got the nickname "master of merchandising" after turning around J.C. Penney Co. Inc. and leading several other big retailers, is taking up the job of nonexecutive chairman at Philadelphia-based Deb Shops Inc., formerly run by Marvin Rounick.

Questrom's appointment, initially announced in October, was part of a deal involving an infusion of funds by Prospect Capital Corp. to support the buyout of Deb Shops by Lee Equity Partners L.P., which bought Deb Shops for $395 million this year. Prospect has been backing Lee and said in its statement today that it has now made a second lien debt investment of $15 million into Deb Shops.

Questrom's path to Philly evidently came through Thomas H. Lee, for whom Questrom has served as a "senior adviser" for years. So says Prospect. Questrom has also led Federated Department Stores Inc., the Neiman Marcus Group Inc., and Barneys New York Inc.

- Thomas Ginsberg

Brian Roberts' Comcast Corp., amidst its pitch battle against tighter cable regulations by the Federal Communications Commission, now says it has hired one of the best telecommunications lawyers inside the Washington beltway to represent it before the FCC.

Kathryn A. Zachem will become the company's D.C.-based vice president of regulatory affairs, effective next February. She also will take the title of senior vice president of regulatory affairs for its Comcast Cable subsidiary. Comcast lured Zachem away from Wilkinson Barker Knauer L.L.P., a major Washington lobbying firm, where she worked for 23 years. The Washingtonian magazine this year deemed her one of the capital's best advocates if you're "appealing fines, getting new technologies authorized, or working to merge two satellite-radio networks" at the FCC. Or, perhaps, fighting to preserve your right to remain the country's No. 1 cable TV provider.

Zachem is not personally registered as a Washington lobbyist. But she'll evidently command Comcast's considerable firepower there. Her boss will be David L. Cohen back in Philly.

- Thomas Ginsberg

Speaking of the housing slowdown: Robert I. Toll, chief of Toll Bros. Inc., has told the SEC (here, here and here) that he exercised 960,000 stock options on Monday that were due to expire at year's end.

Though he apparently had little choice other than to lose the shares, it's hardly an ideal time to sell. Toll stock as of yesterday was down 33 percent from a year earlier and the company just reported its first-ever quarterly loss. Not a great moment for a big insider sale, either.

So, Toll preemptively announced that he sold only enough -- about $13.2 million worth of shares -- to cover the option purchases and taxes, and is holding the rest, about 374,600 shares. Toll chief operating officer Zvi Barzilay and chief financial officer Joel Rassman did likewise with their expiring options. Not that Toll is suffering. He disclosed that his holdings rose to 29.12 million shares, which were worth about $609 million yesterday. But give him credit for not taking the money now, when his option shares were still worth roughly $8.5 million. Because odds are good they will go down before going up. After all, this is the same CEO who openly predicts a real estate-led recession is coming.

- Thomas Ginsberg

The Philadelphia-based CEO of Shire P.L.C., Matthew Emmens, is getting bounced up to non-executive chairman of the U.K. company. He is being replaced as CEO by Angus Russell, the current CFO. Shire has about 600 people in Chester County, mainly because Emmens (that's him on the left) wanted to plant the company in the middle of Big Pharma territory in what became a kind of "ADHD Alley" in the suburbs, with another maker of attention-deficit hyperactivity drugs, McNeill, in Fort Washington. The Inquirer's business desk's Linda Loyd is working on a fuller story.

- Thomas Ginsberg

December was a fortuitous month for eight Cephalon Inc. executives to make their annual stock sales or exercise their options worth millions of dollars, with the stock trading at a higher-than-usual level. The sales on Monday were posted by Robert P. Roche Jr., executive v.p. of worldwide pharmaceuticals; Carl A. Savini, executive v.p. and chief administrative officer; Lesley Russell, executive v.p. of worldwide medical and regulatory affairs; Kevin J. Buchi, chief financial officer; Jeffry L. Vaught, executive v.p. and president of research and development; John E. Osborn, general counsel and executive v.p.; Peter E. Grebow, executive v.p. of worldwide technical operations; Chairman and CEO Frank Baldino Jr.; and director Martyn D. Greenacre.

Spokeswoman Sheryl Williams noted that the eight officials were "taking advantage" of a five-week window to sell after the company announced its quarterly earnings. "It’s not tied to an event. It’s all about opportunity in the trading window to divest some of their options." Each still has significant holdings in the company.

- Linda Loyd

Environmental Tectonics Corp., the Bucks County defense contractor run by William F. Mitchell (that's him to the left) and backed by Gerry Lenfest, seems to have taken one step forward with its biggest customer, the Pentagon, but has lost its accountant in the process.

The good news first. ETC says it has patched things up with the Navy and, as a result, the U.S. General Services Administration has agreed to remove ETC from its list of firms prohibited from bidding on U.S. government contracts. In exchange, ETC is implementing "a program of compliance reviews, audits and reports." The suspension followed a back-and-forth of lawsuits between ETC and the Navy and a guarantee from Lenfest -- a board member and one of the region's most admired philanthropists -- to pay some settlement fees. ETC did not explain the kinds of audits and reports that it must submit. But at least it can keep calling itself a defense contractor.

The bad news: The company also disclosed to the SEC earlier last week (which we missed at the time) that its accounting firm, Grant Thornton L.L.P., had "resigned" after finding out that it wasn't informed about some of the lawsuit notices from the Navy. ETC disclosed that Grant quit because "information came to Grant’s attention that has led it to no longer be able to rely on management's representations and has made it unwilling to be associated with the financial statements prepared by management." Whoa. ETC said it's looking for a new accountant. But better that, than having to survive without U.S. government contracts.

- Thomas Ginsberg

Subaru of America Inc. chairman, president and CEO Tomohiko Ikeda hasn't had much time to get homesick for Japan since arriving in Cherry Hill to run the automaker's U.S. division. Ikeda is executing Subaru's goal of expanding its U.S. market share from its current 1 percent. It has opened offices in Los Angeles and Dallas, and is working on increasing dealerships from 599 to 625.

On his second tour here after serving as a vice president from 1998 to 2002, Ikeda faces a daunting situation. Although Subaru recently posted record sales, the overall auto market is lackluster. U.S. new-vehicle sales were probably 1.2 million in November, virtually unchanged from a year earlier and down 2.5 percent from October, according to Edmunds.com.

To be sure, Subaru's consumers are loyal. Consumer Reports rates the company's cars second in terms of reliability behind Honda and ahead of Toyota, which is one of the investors in Subaru's parent company, Fuji Heavy Industries Ltd. Consumer Reports recommends all of the company's models.

The company is in Cherry Hill because that's where Subaru's first distributors, Malcolm Bricklin and Harvey Lamm, had set up their company, Subaru in America, in 1968. It is now wholly owned by Fuji.

Ikeda, 54, who drives a dark-gray Tribeca, has made the most of his time in the Philadelphia region. His wife, Yuriko, earned a master's degree from the University of Pennsylvania during his last posting in Cherry Hill. She has accompanied him again to the United States. Their son Tenchi, 20, remains in Japan.

Ikeda spoke to us about Subaru's plans to meet the growing demand for environmentally friendly vehicles, its U.S. expansion plans, cheesesteaks, and Impressionism.

Q: Subaru has had trouble meeting sales targets in the past, but recently reported its best sales in 20 years. Does that mean it's on the right track?
A: Actually better this year. Last year, we sold over 200,000 units. It's the best sales in our history, over 200,000. Our target was a little below 200,000, because some products are discontinued, like Baja. (Also, this is a changeover year, when we've introduced four new models.) Our targets were down. Even so, the market is not good ... [because of] oil and the green issue.

Robert E. Turner, chief of Turner Investment Partners Inc., gets big-league compensation, and then some. His firm's SEC disclosure for its IPO last month (we finally noticed it yesterday) says its founder will get $2 million in base salary plus a possible $4 million bonus. That $6 million would be a higher percentage of its total assets under management -- $27.6 billion -- than several bigger firms pay their chiefs.

Baltimore's Legg Mason Inc. has $1 trillion under management and is paying Raymond A. Mason about $13.7 million total. Janus Capital Group Inc. of Denver has $193.5 billion under management and pays Gary D. Black about $14.5 million. Pittsburgh's Federated Investors Inc. has $276 billion under management and pays J. Christopher Donahue about $3.6 million.

Turner's office says no comment.

- Thomas Ginsberg

Charles Plosser, president of the Federal Reserve Bank of Philadelphia, spoke to the WSJ tonight in an online Q&A. For those who are still waiting for Rupert Murdoch to loose the Journal's coverage onto the Internet, Plosser said he doesn't expect a recession. And he's the hard-liner on Fed policy. But he also says if he's wrong, there's not much the Fed can do with monetary policy to avert it anyway. Excepts are below.

That Jenny is getting around. In Jenkintown today, one of the most sought-after U.S. postage stamps -- a rare "Inverted Jenny" 24-cent airmail stamp of 1918 -- sold at auction for $230,000. Montgomery County stamp broker John Apfelbaum, who arranged the auction, said the winning bidder was a stamp dealer from Lancaster County, who bought it for a client in the Midwest.

Just last month, a near-perfect condition Inverted Jenny -- so named for its misprinted drawing of the Curtiss JN-4 airplane -- went for $977,500 in New York. And today in Cherry Hill, another Inverted Jenny will be given away by Amy Polumbo, the stand-up-to-blackmail Miss New Jersey, in a drawing sponsored by StampWants.com, which by the way claims its value is around $400,000.

All proof that the collectible stamp business has lately gotten hot. Apfelbaum says, as a rule of thumb, that stamp values have gone up during periods when the broader economy was going south. Or, in Apfelbaum's words, "when there's been a lack of confidence in the government, combined with a cheap dollar internationally."

Apfelbaum, president of Earl P.L. Apfelbaum Inc., said the market's still not as hot as the late 1970s, when "prices went up 400, 500 percent in five years. That's not bad - I should have gotten out then."

Apfelbaum's Inverted Jenny stamp, which was part of a collection that had been amassed by a retired real estate developer from Maryland, had several flaws, including a prominent crease and the absence of some of its original adhesive. He actually had predicted it would fetch between $200,000 and $300,000. "We had a lot of bidders up to about $140,000. And then were two people for up to the $230,000 it sold for," he said.

A little history: The Inverted Jenny was issued to coincide with the first U.S. air mail flights between Washington, Philadelphia and New York. It has long been a high-demand stamp for collectors. Fewer than 100 are in circulation, and with investors flocking to stamps for high-yield returns on equity, it is has become all the more costly in recent months and years.

The back-and-forth over gun control in Pennsylvania and elsewhere has not, typically, included a detailed state-by-state breakdown of the job-and-tax impact of the hunting and firearms business. Until now, courtesy of a new study from the Congressional Sportsmen's Foundation, the National Shooting Sports Fundation, and several other groups.

First, we'll grant that these new numbers come from some groups with a pro-hunting and pro-gun agenda. And they amount to a smart tactic to enlist more stakeholders in their cause. But their numbers, based on an independent analysis of U.S. Census Bureau survey statistics, are worth noting anyway:

The report says that Pennsylvania's 933,000 hunters -- almost all of whom use firearms -- spent an estimated $1.7 billion on their pastime in 2006, which was the second-highest nationwide, after Texas. That spending in turn supported an estimated 28,000 jobs statewide (also second, after Texas). When anglers are added, the totals rise substantially. Pennsylvania's 1.4 million hunters and anglers together accounted for $1.7 billion in state wages, $371 million in state and local tax revenues and 51,000 jobs in Pennsylvania. (Spending by New Jersey hunters alone (minus the anglers) was by contrast much lower, about $193 million (No. 38), and state job impact was 2,700 (No. 41).)

Those are not marginal numbers for Pennsylvania. Sure, a lot of it seems due to fishing. When the anglers are added to all states, Pennsylvania also drops out of the No. 2 spot in total spending, surpassed by more watery states like Florida and California. But one point remains: the Second Amendment means big bucks in the Keystone State.

- Thomas Ginsberg

The Mohegan Tribal Gaming Authority, which operates casinos in the Poconos, Connecticut and elsewhere, has been making noise about getting into the A.C. casino market. It may now get a shot with the Tropicana in trouble.

Jeffrey E. Hartmann, Mohegan's chief operating officer, gave us this statement last night:

"We have placed a call to the state of New Jersey to find out about the process for the disposition of the asset. Atlantic City represents an opportunity to extend the Mohegan Sun brand into another good marketplace."

Of course, Mohegan is not alone. Other potential bidders are Cordish Co. of Baltimore, gambling mogul Steve Wynn.

- Suzette Parmley

Today's lesson: The squeaky wheel gets the liver transplant.

Cigna Corp. is on the hot-seat in California today where nurses from the California Nurses Association union planned to march on the Philadelphia health insurer's California offices.

They wanted Cigna to rescind its decision denying a liver transplant to Nataline Sarkisyan, a 17-year-old patient at the UCLA Medical Center. The nurses association said Cigna told the family that the treatment was too experimental.

At first, in published reports in the Los Angeles Daily News and Hartford Courant, Cigna would not comment on the case, citing patient privacy, but urged patients in general to make use of Cigna's appeal process when they disagree with a decision.

But, that wasn't the end of the story.

Here's Cigna's latest comment:

"Our hearts go out to Nataline and her family, as they endure this terrible ordeal. Based on the unique circumstances of this situation, and although it is outside the scope of the plan's coverage and despite the lack of medical evidence regarding the effectiveness of such treatment, CIGNA HealthCare has decided to make an exception in this rare and unusual case and we will provide coverage should she proceed with the requested liver transplant.

Our thoughts and prayers are with Nataline and her family at this difficult time."

This isn't Cigna's first brush with the limelight. In Michael Moore's healthcare documentary "Sicko," Cigna gets slammed for denying cochlear implants to a child. In the end, Cigna relents. By the way, the front page of Moore's website asked people to call Cigna. The headline? "Chopped Liver."

- Jane M. Von Bergen

If only Hemispherx Biopharma Inc. could get this kind of screwup every day. The allegation last week that a former auditor from BDO Seidman L.P., then-director and partner Stephen J. Nardi, had mishandled and then tried to cover up the error on the drug company's 2004 audit, will actually have a positive impact on the company's financials.

Hemispherx says in a statement today that its restatement of 2004 performance, conducted because of questions about the BDO audit, has resulted in an improved report for 2004. It says its fiscal 2004 now shows "a decrease in the net loss applicable to common stockholders of $3.2 million, or $0.07 per share." The BDO audit in question showed a bigger loss.

This all blew open on Friday when, according to the Philadelphia Business Journal, the federal Public Company Accounting Oversight Board filed disciplinary action against Nardi, from Erial, Camden County. It bars him from working with any public accounting firm for a year for his "failure" to properly review a junior member of the firm's audit work, and then allegedly ordering the audit manager to alter the documents to make it appear she had reviewed it properly. The Journal identifies the audit manager as Anne Marie Fitzpatrick.

Nardi, who left BDO in 2006, can appeal the action in a year. We could not reach Nardi for comment. BDO Siedman sent us this statement: "This matter, which took place in 2005, involved two former professionals of the firm. Upon uncovering the conduct, BDO Seidman immediately launched an extensive internal investigation, conducted by outside counsel, and appropriate corrective measures were taken by the firm. The firm will have no further comment on this matter."

Philadelphia-based Hemispherx, for its part, says it had already dropped BDO and hired McGladrey and Pullen L.L.P. as its independent registered accounting firm. The small company could still use the help. Its stock fell to a five-year low last week of 72 cents, then rose only slightly on news of the restatement.

- Thomas Ginsberg

Campbell Soup Co. says it's selling to a Turkish company, Yildiz Holding A.S., which is the owner of the Ulker Group. See Inquirer business news.

Nataline Sarkisyan

The nurses association, which led protests against Cigna on Sarkisyan's behalf, has put out a statement blasting the insurance company and accusing it of perpetrating "a horrific tragedy that demonstrates what is so fundamentally wrong with our health care system today."

Note that this girl, according to the AP, was in a vegetative state. She had leukemia. Her doctors recommended a new liver only after the bone marrow transplant procedure that they performed had failed. Our question: If it was a such a viable life-saving measure, why didn't the hospital just do it and eat the cost itself, under an uncompensated care financing system that every state has? There are way too many questions about this case to draw conclusions.

We've put in a call to Cigna, which had not commented on the situation since the teen-ager died after it said Thursday that it would cover the procedure.

- Thomas Ginsberg

Cigna Corp. has put out a statement regarding Nataline Sarkisyan, who died Thursday evening just a few hours after the insurer relented and agreed to cover her liver transplant. Cigna now faces a threat of lawsuits by the family, and we can only imagine the lawyering that went on Friday over at 16th and Chestnut before this statement emerged, signed by Wendell Potter, one of their spokesmen.

"Our deepest sympathies are with Nataline's family. Their loss is immeasurable, and our thoughts and prayers are with them. We deeply hope that the outpouring of concern, care and love that are being expressed for Nataline's family help them at this time."

One though as Cigna moves into crisis-communications mode: Perhaps it needs to get out in front of this story, instead of being on the defensive. This innocuous but kind-enough statement, for example, might have been signed by the CEO, Ed Hanway. Sometimes little things matter.

News of Nataline's death is getting picked up worldwide (see the Daily Telegraph and California local TV). The blogosphere is also lighting up. Allspinzone says Cigna's accountant has not now put a dollar value on a girl's life. Presidential candidate John Edwards' blog is making hay for his campaign.

Stay tuned.

- Thomas Ginsberg

This surprised us, but perhaps we weren't paying attention: The Philadelphia region allegedly is rising fast on the national ranking of millionaire households as a percentage of all our households. Faster even than other metro areas. This comes from Claritas, the demographic marketing data firm owned by The Neilsen Co. It says, out of 200 large metro areas nationwide, Philly ranked No. 10 last year in percentage of our households with incomes of $2 million or more, up from No. 19 a year earlier. Our share of slumming households -- those with income of $1 million to $2 million -- was No. 9 nationwide, up from No. 14 a year earlier.

In other words, the odds around here of hitting a baseball through the front window of a millionaire's house is going up. And of a $2 millionaire's house, way up.

Hard to tell what's going on here, if anything. Baltimore and Boston also rose in rank, while Santa Barbara and other rich spots fell entirely off this list. Frankly, it's suspicious. Claritas says it tweaked its calculation formula but says the rankings are still comparable from year to year. We'll have to see next year. Meanwhile, you have 12 months to brag.

- Thomas Ginsberg

A little background re millionaire households: One commenter wonders if there was an effect from the changing housing market. First, the Claritas data are from 2006, long before the housing market tanked. Second, it says its calculation of income producing assets (IPA) does not include home equity. Third, we track this trend based strictly on the internal order of the rankings, not on the actual number or share of households from metro to metro, which is NOT comparable from 2005 to 2006. Nonetheless, here is Claritas' explanation of its formula:

Over the past three years, homeownership rates and home values have increased, causing a decrease in IPA. Households have been using income-producing assets for housing down payments, home purchasing closing costs, and mortgage payments. These housing costs come out of IPA and eventually move into home equity, and home equity is not part of the IPA model. Additionally, IPA is based off of a three-year average of survey results. This year’s three-year average no longer contains the impacts of 9/11 and the slight recession that followed the attack. Finally, the baby boomers are nearing retirement age. As this group retires, the growth of IPA will slow as the boomers tap into their retirement nest eggs. Furthermore, their incomes assets are going to be declining, as well as their IPA.

In recent years, the higher IPA distributions have been gradually shifting away from representative survey results, and in 2007, it became clear that it was time to redistribute the IPA ranges so they better reflect the reality today. Claritas’ distribution realignment is a result of two consecutive years of national financial survey results displaying a similar story. Additionally, federal sources such as the Internal Revenue Service, Bureau of Labor Statistics, and Census Bureau are issuing reports with similar findings in the change of assets across the nation.

- Thomas Ginsberg

Cigna Corp. just sent us this statement, which it describes as an internal memo to all Cigna HealthCare employees from Jeffrey Kang, the chief medical officer, and David Cordani, the division president. In essence, it's a reiteration of Cigna's defense of its behavior in the Sarkisyan affair, and also asserts that Cigna cannot really defend its actions because it has to watch its mouth in the face of "threatened litigation" and because of patient confidentiality rules.

Still, Cigna does manage to point out, in artful language, that it had two independent experts (who it didn't identify) who said the recommended transplant "would not have been an effective or appropriate treatement." The implication seems to be Cigna came to conclude not just that the treatment was experimental, but that it would not save the girl's life. And yet it agreed to pay for her transplant anyway, and to switch her from the 10 percent of transplant claims it says rejects to the 90 percent it says it grants. (We'll have to take these numbers are face value.)

Anyway, here's the memo (download) and in full:

Michelle Leder at Footnoted.org caught this little item on tax gross-up payments for Ed Breen, the chief of Tyco International Ltd. who has a home in New Hope. She posted it last week and we just saw it. Better late than never ...

Some clever consultants have come up with attention-grabbing, if predictable, advice for Santa Claus: Relocate!

The Swedish firm Sweco AB of Stockholm says it has examined global demographics and transport routes and concluded Santa Claus ought to relocate to the Central Asian country of Kyrgyzstan, where he could "achieve the most efficient around-the-world trip to distribute Christmas gifts. He can eliminate time-consuming detours and avoid subjecting his reindeer to undue strain." (No word on whether Sweco is bidding for contracts in Kyrgyzstan.)

Jumping on this sleigh, Kyrgyz tourism authorities have declared their predominantly Muslim nation Santa's "new home," according to Reuters.

The government there also calls 2008 the "Year of Santa Claus" and renamed a mountain "Santa."

Okay kids, whoever spells Santa's new address correctly gets an iPodsky.

- Thomas Ginsberg

The Philadelphia Stock Exchange, which has one of the country's biggest options trading floors, said last week it had broken its own volume record. Good thing, because given the market turmoil driving up options trading everywhere, anything but a big increase might look a bit off: On Dec. 20, the PHLX recorded 6.399 million contracts traded, giving it roughly 31.5 percent of options market that day.

The other big options exchanges also have been bustling. The Chicago Board Options Exchange (CBOE) and Intenational Securities Exchange (ISE), both usually bigger than PHLX by volume, also have both declared they broke their own monthly records for November.

- Thomas Ginsberg

Seems that snitching and Philadelphia's battle against crime (and against the 'Killadelphia' image) is paying off for at least one company. Clear Channel Outdoor Inc., of San Antonio, says Philadelphia's digital "most-wanted" billboard has been so successful (three fugitives were caught recently) that the FBI has agreed to expand the service nationwide.

No word how much the FBI contract is worth for Clear Channel. The company's latest quarterly filing pegs a large share of its revenue growth on the billboards. Clear Channel already has said it will launch the electronically networked signs in 20 more markets in 2008. So the investment in Philadelphia has clearly (sorry) paid off.

- Thomas Ginsberg

It might be news if PNC Bank's annual "Twelve Days of Christmas" Price Index actually dropped. But it hasn't since 2002 (download history here), and didn't this year, either. The Pittsburgh-based company's PNC Wealth Management arm has calculated this year's cost at $19,507 for all those consumer goods and services: the partridge, pear tree, hens, drummers, ladies, golden rings, etc., 364 items in total. That's 3.1 percent over last year's total, which is less than the 4 percent rise in the Consumer Price Index.

PNC's James Dunigan attributes its Christmas-index increase this year in part to the weaker dollar and, to a lesser extent, the first federal minimum wage increase in 10 years. Those eight maids-a-milking get paid by the hour, after all. The biggest price increase was for the five gold rings, thanks to the precious-metal rally that has raised their price 21.5 percent over last year to $395. Too bad platinum doesn't rhyme so easily, since it's becoming a good buy. Still, PNC says the gold-ring total is still far off its 1989 high of $750.

On the other hand, the $4,759 price for nine ladies dancing -- based on estimates from Philadanco in Philadelphia -- is unchanged. Maybe Philly really does have more fun.

- Thomas Ginsberg

The Tidewater Grain Elevator, an abandoned structure next to I-95 in South Philadelphia so constant that most people stopped noticing it, now is gone. The urban blog Necessity for Ruins has video of the implosion early Sunday morning. It also has this comment from a guy it identifies as Harry Hagin, site superintendent for Camden Iron and Metal Inc., which owns the site and arranged the demolition: "Philadelphia used to have a lot of industry. Not so much anymore."

We'll poke around for more information. We missed word of this implosion. And it's unclear what Camden Iron and Metal has in store for the site.

- Thomas Ginsberg

Clinton O. Price Sr. had retired just this past month as chairman and CEO of John Middleton Inc. a privately held tobacco firm with facilities in King of Prussia and Limerick that was sold in November for $2.9 billion to Altria Group Inc., parent of Philip Morris U.S.A.

Price died Dec. 22 from injuries sustained in an automobile crash Dec. 20 in Upper Merion Township. Price had planed to play an advisory role during the transition. Price was 65 and lived in King of Prussia. He started as factory worker and worked his way to company chairman. Price is credited with developing the production process for the Black & Mild brand cigar, which has a blend of pipe and cigar tobacco.

- Sally Downey

Robert Isom, the recently appointed operations chief at US Airways Group Inc., said in a Wall Street Journal article yesterday that one of the biggest reasons for the airline's troubled operations since its merger with America West was that officials from each company lacked "a common focus as to what's important to fix." But Isom says he is trying. He has centralized control over decisions by US Airways' individual airport managers whether to delay a flight. He told the WSJ he hoped to have operations "back on track" in 2008. We'll be watching.

Christopher J. Carroll quit as chief credit officer at Advanta Corp. just after Thanksgiving, replaced by Chad Blue. In an SEC filing yesterday, Advanta said it has agreed to give Carroll separation pay of $305,787 -- slightly more than a year's salary -- plus health insurance and job-hunting services. In return, Carroll cannot sue or bad-mouth Advanta.

Demolition of the abandoned Tidewater Grain Co. elevator last weekend may illustrate something poignant about our manufacturing sector after all: It has reduced to rubble one vestige of this region's economy and will replace it with perhaps a symbol of our future manufacturing role: a mountain of scrap metal.

Camden Iron & Metal Inc., whose subsidiary Preston Properties bought the Tidewater site in August for roughly $3 million, says it spent about $2 million to raze the structure and make way for a new metal-shredding operation on the river. So says Howard Cain, a consultant to the Camden-based company run by Joe Balzano.

Cain told us that Camden Iron & Metal ships has been looking for a site closer t the river for about two years. It ships about 70 percent of its scrap out by water to manufacturing plants overseas or in the South. It will relocate its current Philadelphia operations to the 12-acre Tidewater site and close its smaller site at 26th and Penrose. Cain said no decision has been made on what will become of the Penrose site. At the Tidewater site, the new pile of scrap metal should begin to rise later next year and will replace a concrete salvage operation there run by Carbon Services Corp. of Leighton, Pa.

So one way or another, recycling and scrap seem to be in Philly's future.

- Thomas Ginsberg

The Pew Charitable Trusts has taken a hard look at pension funds for state employees nationwide and concludes that, among other states, New Jersey "has done an abysmal job of keeping up with annual funding requirements." Its report says N.J. is facing retiree-health-care costs of $109.6 billion but has set aside only $86.5 billion.

Pennsylvania is in slightly better shape but also faces a shortfall.

Nationwide, Pew found 50 states overall face a 15 percent shortfall.

How much is a new flight route from Philadelphia to London Heathrow Airport worth to Doug Parker, CEO of US Airways Group Inc.? According to the Financial Times this week, his airline paid a "record price" for a set of takeoff and landing slots at Heathrow in preparation for its new service there.

Giving no sources or dates, the FT said the Italian carrier Alitalia sold a set to US Airways for 30 million pounds, one of several sets it has sold to other airlines. That equaled $59.4 million at this week's exchange rates, but we don't know a date to figure an actual equivalent. US Airways spokesman Phillip Gee told us a confidentiality agreement prevents the airline from saying anything about the deal. "Sorry, not much help I know," Phil says.

Then again, somebody did talk to the FT. The paper says Heathrow takeoff and landing slots have more than doubled in price in the last two years, and Alitalia is cashing in now on a bigger surge caused by U.S. airlines seeking to exploit the "open skies" treaty that comes into force at the end of March. It calls US Airways' 30 million-pound payment a "record" at Heathrow.

- Thomas Ginsberg

The teeth-gnashing and hand-wringing over executive compensation has some new ammunition from the Conference Board, which is releasing a report today that finds stock and other non-cash compensation for small-company chiefs, on average, is worth 11 times more than their salaries. That compares with 80 times more for big-company honchos. That essentially jibes with other studies.

But the board goes on to say these salary multiples mean that big company CEOs actually do have a lot of "skin in the game" with shareholders. Whether it's enough skin to make them shareholders' pain and truly links their pay to performance is another question. The board asks: "The amount of 'skin in the game' appears less dramatic if total holdings are looked at as a percentage of total compensation instead of as a multiple of salary, prompting the question: is salary the right denominator for measuring how much skin there is in the game?"

Speaking of CEO skin, the outsourcing firm CDI Corp. said an a filing to SEC last Friday that it has a new employment agreement with Roger H. Ballou, its president and chief executive, under which he will get $750,000 in salary next year plus stock and cash bonuses. It also says this: Ballou must hold at least $2.5 million worth of the company's stock by next December. Now that's skin.

- Thomas Ginsberg

Entrepreneur Linda Rosanio learned her earliest lessons about business from her parents, Anthony and Nancy Catelli. In 1946 her late father founded what’s now known as Catelli Brothers Inc., the Collingswood-based provider of lamb and veal products, her mother, who is now 80, kept order in a house with seven children.

The training has served her well. Rosanio, 52, heads the Star Group of Cherry Hill, one of the largest advertising and public relations agencies in the Delaware Valley, where business is soaring so much that it hired 100 people last year alone. In addition, she also owns Catelli Ristorante in Voorhees, which Zagat readers call one of the top in the region for Northern Italian cuisine. Rosanio also is active in civic causes, serving on the boards of the Pennsylvania Ballet, The American Red Cross Southeastern Pennsylvania Chapter and the Garden State Discovery Museum.

In an interview with PhillyInc, Rosanio discussed her family, her business interests and her take on the local and national economy.

Q: What did you learn about business by growing up in such a large family?
A: We had to learn how to work together. I have numerous partners. I am able to let them do their thing. You have to be able to have other people have the limelight and do what they do. I learned that from being able to share with my siblings.

Agence France Presss and the London Daily Telegraph are reporting that GlaxoSmithKline P.L.C., AstraZeneca P.L.C. and Eli Lilly and Co. are being investigated over "bribes allegedly paid to Saddam Hussein's deposed Iraqi regime." (Thanks to Pharmalot's Ed Silverman for spotting this on Sunday).

The reports say the companies have confirmed that they have been asked to hand over documents by Britain's Serious Fraud Office, which AFP says is investigating "possible breaches of the United Nations' oil-for-food sanctions program."

AFP quotes a GSK spokesman in London: "GSK does not believe that its employees or its agents in Iraq knowingly engaged in wrongdoing regarding the oil-for-food programme. ... In fact GSK went to considerable lengths to co-operate with UK government authorities responsible for the UK administration of the programme and to impose anti-corruption measures when dealing with intermediaries in Iraq at a time when the environment was extremely volatile and difficult."

It quotes an AstraZeneca spokeswoman in London: "AstraZeneca has received a request from the SFO for documents as part of its review of the oil-for-food programme in Iraq. The company will be providing the documentation."

Note that the 2005 report detailing problems in the U.N. oil-for-food program concluded the Iraqi regime had demanded kickbacks from many foreign companies, and that bribes actually were paid in connection with "humanitarian" contracts for 2,253 companies, although only a few companies were named in the public report. Neither GSK nor AstraZeneca was among them.

- Thomas Ginsberg

Cigna Corp.'s chief medical officer said today that the Philadelphia health insurer wasn't responsible for paying for a California teen's liver transplant, but offered to do so out of "empathy." Cigna initially denied coverage for a transplant for Nataline Sarkisyan, a cancer patient whose liver failed after a bone-marrow transplant. That decision sparked protests on her behalf. She died on the day Cigna reversed its decision.

In a written statement on Cigna's Web site, Jeffrey Kang said the money for Sarkisyan's transplant would normally have come from her father's employer, a self-insured business whose medical plan is administered by Cigna. Kang said that Cigna decided to pay for the care itself even though it had concluded that the "treatment would be unproven and ineffective" and not covered by the Sarkisyans' health plan. In his statement, Kang said: "Given our empathy for this family and the unique circumstances of this situation, Cigna volunteered, entirely independent of any plan or coverage decision and outside of the medical review process, to pay out of our pocket -- not the employer's pocket -- for a transplant should Ms. Sarkisyan's doctors decide to proceed."

- Stacey Burling

Last month's bankruptcy filing by the maker of the Today Sponge contraceptive has spurred a Doylestown firm to cut ties with it. QuantRx Biomedical Corp. says in an SEC filing today that it would end an agreement with ailing Synova Healthcare Group Inc., which distributes QuantRx's hemorrhoid products.