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Business Digest
Appeals court sets hearing on JOA appeal for Jan. 21

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Attorneys for each side will have 10 minutes to argue before a three-judge panel over whether The Times can cite losses from 2000 and 2001 to require Hearst to open negotiations that could shut the P-I or end the joint-operating agreement (JOA) between the two papers.

The Times sought the appeal after a lower court ruled in September the losses, which resulted from a 49-day newspaper strike, were covered by a JOA provision that exempts either party from liability in cases where performance is affected by forces beyond their control.

The court said that meant The Times could not invoke an escape clause that requires negotiations to shut down one paper or end the JOA if either party has three consecutive years of losses.

Both sides are seeking an expedited decision in the appeal.

Owens leaving VoteHere for DaimlerChrysler post

BELLEVUE — VoteHere, a Bellevue company that develops technology to secure electronic voting, said yesterday that Bill Owens, a former high-ranking U.S. military leader, would step down as the company's chairman.

Owens, who has served as chairman for the past two years and is Co-Chief Executive at Bellevue-based Teledesic, is leaving to join the board of DaimlerChrysler.

Owens was vice chairman of the Joint Chiefs of Staff; deputy chief of naval operations for resources, warfare requirements and assessments; commander of the 6th Fleet; and senior military assistant to secretaries of defense Frank Carlucci and Dick Cheney.

VoteHere's post will be filled by Ralph Munro, who has been a board member since January 2001. Munro was Washington's secretary of state from 1980 to 2000. During that time, he helped to improve voting services, such as absentee voting, voter registration, election reporting and voter information.

The company has not decided whether it will fill Munro's board seat.

VoteHere also announced that Kevin Brown will join the company as executive vice president. Brown worked more than six years at Visio, which Microsoft acquired in 2000.

Multiplexes to open at malls in SeaTac, Olympia

SEATTLE — Century Theatres plans to open multiplex theaters in Federal Way and Olympia next year. It is the California company's first foray into Washington.

The company plans to open a 16-screen theater by the end of next year at SeaTac Mall. The 16-screen Olympia theater is scheduled to open in 2005 at the Westfield Shoppingtown Capital mall.

Century is the nation's seventh-largest cinema chain, with theaters through much of the West.

AT&T Wireless buying new U.S. Cellular network

REDMOND — AT&T Wireless agreed to buy U.S. Cellular's South Texas cellphone network for $95 million. The acquired network has 74,000 customers.

The deal, expected to close early next year, will allow Redmond-based AT&T Wireless to tie together networks in Houston, San Antonio and Austin and add coverage in Corpus Christi and Laredo, the company said yesterday.

For U.S. Cellular, the deal lets it exit the South Texas market, which is geographically removed from its larger operations in the Midwest and North Texas.

U.S. Cellular said the network contributed $45 million to revenue in the third quarter. That represents 7 percent of the Chicago-based company's third-quarter revenue of $657.3 million.

AT&T Wireless, the third-largest U.S. mobile-telephone company, bought U.S. Cellular operations in Florida and Georgia this year, adding 141,000 clients in those states.

Nation/World

Subway deal makes Coke firm's sole drink provider

ATLANTA — The Subway Restaurants sandwich chain has named Coca-Cola as its exclusive beverage provider for outlets worldwide.

The agreement announced yesterday covers all of Coke's products and package forms and includes all 20,000 Subway outlets in 72 countries. Subway is based in Milford, Conn.

Financial terms of the deal, which is a blow to Coke rival Pepsi-Cola, were not disclosed. Previously, Atlanta-based Coke's share of Subway's beverage business was 15 percent; Pepsi-Cola, of Purchase, N.Y., had the remaining 85 percent.

J.P. Morgan Chase buying Citicorp services unit

NEW YORK — J.P. Morgan Chase, the second- biggest U.S. bank, agreed to buy Citicorp Electronic Financial Services for $380 million in cash to expand its payment-card services.

The Citigroup unit, whose products include debit cards used by food-stamp recipients and participants in company benefits programs, adds to J.P. Morgan's wholesale-payment services operations, the bank said in a statement.

J.P. Morgan, which posted falling profits in 10 of 11 quarters between 2000 and 2002, is trying to build operations such as consumer banking and paperwork processing that bring in steady revenue. The purchase follows its acquisition this month of Bank One's corporate-trust unit for $720 million.

HealthSouth founder seeks to unfreeze assets

WILMINGTON, Del. — HealthSouth founder Richard Scrushy will file court papers asking a judge to release assets frozen this month after his indictment on charges he orchestrated a $2.7 billion accounting fraud.

Scrushy, 51, will ask for access to assets frozen after he was indicted on 85 counts that included allegations he inflated income and assets and laundered the proceeds to buy mansions, planes, boats, jewelry and cars, his attorney Abbe Lowell said. Lowell planned to file the papers yesterday in federal court in Birmingham, Ala.

Prosecutors, who sought the freeze on Scrushy's assets, want to use criminal-forfeiture laws to seize $279 million they say was derived from crimes. Scrushy, who can't tap his assets without court approval, may seek access to as much as $75 million, although a specific dollar amount is not requested in the court filing, Lowell said.

Qwest investigates ex-exec in suspected AOL fraud case

DENVER — Qwest is investigating a former human-resources executive accused of embezzling from America Online.

AOL claims in a lawsuit that Gregory Horton, 37, who worked for Qwest for about two years before leaving last year, diverted most of a $100,000 contract to an entity in which he was a co-owner.

Any legal action by Qwest would be determined by findings of an internal investigation, said Qwest spokesman Tyler Gronbach. He said the company was cooperating with federal authorities.

The lawsuit claims the contract was awarded to a company called Pinebrook Consulting. The money allegedly ended up in a shell company owned by Horton, an AOL colleague and a Frito-Lay executive.

CompUSA promotes Mondry to chief executive position

DALLAS — CompUSA has a new chief executive, promoting an official who had overseen the technology retailer's merchandising and marketing since 2000.

The Dallas-based company said Hal Compton, 56, who had led the company since it was purchased in 2000 by Mexican retail company Grupo Sanborns, will retire Dec. 5 and hand over the CEO job to Lawrence Mondry, 43.

CompUSA is trying to reduce reliance on its core business of selling computers by emphasizing sales of other consumer electronics.

Compiled from Seattle Times business staff, Dow Jones Newswires, The Associated Press and Bloomberg News.

Copyright © 2003 The Seattle Times Company