Starbucks reaches settlement with Kent worker

Starbucks

Mark Tutalo, the former Kent roasting-plant worker who sued Starbucks for disability discrimination and retaliation for his union activity, has settled with the company, according to his attorney and Starbucks. Neither side would give details or say whether money was exchanged.

The lawsuit originated in early 2006 and sought back pay, potential future earnings, attorney fees and other damages. It was scheduled to go to trial in King County Superior Court next month.

Earlier this month, Starbucks agreed to pay $85,000 to settle a disability-discrimination lawsuit filed in 2006 by the U.S. Equal Employment Opportunity Commission after the company fired a Seattle barista with bipolar disorder. Starbucks did not admit wrongdoing.

Starbucks

"Arctic Tale" film to be promoted

Starbucks is planning a summer publicity blitz for "Arctic Tale," a movie about a walrus and a polar bear narrated by Queen Latifah, using posters and cup-holders that the company hopes will educate coffee drinkers about climate change.

Starbucks also hopes that this time around, customers will actually go see the movie.

Last year, the coffeehouse chain linked up with Hollywood to promote "Akeelah and the Bee," but the feel-good movie about an inner-city girl who makes it to a national spelling bee got a lukewarm reception at the box office in spite of fun vocabulary-word flash cards in Starbucks shops.

Starbucks will play the movie soundtrack, which features Ben Harper, Aimee Mann and the Shins, in stores. "Arctic Tale" is set to debut in selected theaters July 25, with a wide release planned for Aug. 17.

Organic to Go

$6.35 million raised in financing

Organic to Go, which became a public company in February, has raised $6.35 million in equity financing to fund future expansion. The Seattle company said the transaction is expected to close later this week.

It's the first time the cafe and catering company has raised money exclusively from institutional investors. In February, Organic to Go raised $6.9 million in a separate private placement.

Becoming a public company — which Organic to Go accomplished by inserting itself into the shell of another publicly traded company — helped the company attract more institutional investors.

Organic to Go has more than 50 grab-and-go outlets and 14 retail cafes in Seattle and Southern California.

Boeing

Parts production to end; 265 jobs cut

Boeing, the world's second-biggest commercial-aircraft maker, said it will end parts production at its Oak Ridge, Tenn., plant, eliminating 265 jobs.

Layoff notices will start to go out next month and operations will cease by the first quarter of 2008, Chicago-based Boeing said Wednesday in a statement.

The plant, which had produced flight-deck consoles and instrument panels, no longer has enough production work to keep it operating, Boeing said. The company said March 2 it would start cutting about 7,000 jobs related to the C-17 military-cargo jet early next year in anticipation of a mid-2009 production shutdown because of the lack of U.S. government and international orders.

Boeing

Plane maker names new top attorney

Boeing hired Richard Hauser, former deputy counsel to President Reagan, as the plane maker's senior attorney in Washington.

Hauser, 64, most recently served as the president of the National Legal Center for the Public Interest, a Washington-based research foundation. His title will be vice president and assistant general counsel, Boeing said Wednesday in a statement.

Hauser has also worked as general counsel of the U.S. Department of Housing and Urban Development and he has held positions in the Department of Justice.

Nintendo

Wii game creation is opened up

Nintendo has opened its blockbuster Wii game system to independent video-game developers for the first time, the company announced Wednesday.

Nintendo said it will let individuals and outside game studios create and sell downloadable Wii games with a tool called WiiWare. Gamers will be able to purchase the games through the console's Wii Shop channel starting in early 2008.

Perrin Kaplan, a Nintendo spokeswoman, said the game-creation kit is designed for people with some knowledge of computer programming. Developers can start designing using a PC but must complete the work on the Wii console, Kaplan said.

"Independent developers armed with small budgets and big ideas will be able to get their original games into the marketplace to see if we can find the next smash hit," said Reggie Fils-Aime, president of Nintendo of America.

Qwest

Reform proposed to spread Web use

Qwest is proposing changing a subsidy that helps underserved customers get affordable phone service so they also can get high-speed Internet access.

The proposal also would shrink the amount of money wireless competitors would get from the federal program. Qwest doesn't get wireless subsidies from the fund, said Steve Davis, Qwest senior vice president of public policy.

The Universal Service Fund is paid for with a nearly 12 percent surcharge on phone bills. It subsidizes phone service in rural areas, mountain communities and other places where installing equipment and making a profit would be difficult.

Qwest, based in Denver, and others say the fund, which has grown to about $4 billion, hasn't kept up with the times and is subsidizing phone service to areas that no longer are unserved or unprofitable to serve.

Federal lawmakers have proposed using some of the funds to provide hard-to-reach customers with broadband service, an idea Qwest supports.

Bear Stearns

Near-collapse of funds examined

The Securities and Exchange Commission is examining the near-collapse of two Bear Stearns hedge funds that made bad bets on the mortgage market.

The SEC inquiry is "informal" at this point and has not resulted in any subpoenas or formal document requests, a person familiar with the matter said Wednesday. This person spoke on condition of anonymity because the inquiry has not been publicly disclosed.

The existence of the probe was reported by BusinessWeek and CNBC on Monday.

SEC Chairman Christopher Cox disclosed at a House hearing on Tuesday that the agency has started roughly a dozen investigations related to complex aggregations of debt known as collateralized debt obligations, in which hedge funds have increasingly invested.

Guitar Center

Billion-dollar buyout accepted

Guitar Center, the largest U.S. musical-instrument retailer, said Wednesday its board accepted a $1.9 billion cash buyout offer from a private equity firm.

The deal with affiliates of Bain Capital Partners came amid speculation that a buyout was in the works. Guitar Center had hired investment bank Goldman Sachs to auction the company, which has 210 stores.

Bain Capital offered to pay $63 per share, which represents a premium of 26 percent over Guitar Center's closing price Tuesday of $50.06. The purchase price is based on the company's 30.2 million shares outstanding at the end of March. Guitar Center shares climbed $9.92, or 19.82 percent, to $59.98 Wednesday.

Commerce Department

Orders decline for big-ticket goods

Orders to U.S. factories for big-ticket manufactured goods plunged in May by the largest amount in four months as demand for aircraft, heavy machinery and metals all declined. The Commerce Department reported Wednesday that new durable-goods orders dropped by 2.8 percent last month, a far bigger drop than the 1 percent decline economists had been forecasting.

The weakness was led by a huge 22.7 percent plunge in commercial-aircraft orders, which can be extremely volatile from month to month. But orders were also down for a wide array of other goods, from primary metals such as steel to machinery and electronic appliances.

Adelphia

Founder, son sent to prison for fraud

A federal judge on Wednesday ordered Adelphia cable-TV company founder John Rigas and his son, Timothy Rigas, to report to prison Aug. 13, nearly three years after they were convicted in one of the largest corporate frauds in U.S. history.

Both men had been free on bail while they appealed, but U.S. District Court Judge Leonard Sand said the time had come for the two to start paying their debt to society.

Neither the 82-year-old Rigas patriarch nor his 51-year-old son reacted to the judge's order, which had been expected.

Capital One

Cost-cutting plan includes 2,000 jobs

Capital One said Wednesday it expects to cut about 2,000 jobs, or about 7 percent of employees, throughout the company as part of a cost-cutting program to save $700 million by 2009. The credit-card and banking company expects to incur $300 million of pre-tax charges for the restructuring, including $90 million this quarter and $200 million in 2007.

Compiled from Seattle Times business staff, Bloomberg News and The Associated Press