11 January 2017


Original Story:

INDIANAPOLIS — They said they were defrauded, and now they want a seat at the table.

Last week, a group of former ITT Tech students moved to establish themselves as creditors in the school's bankruptcy proceedings in the U.S. Bankruptcy Court for the Southern District of Indiana.

On Jan. 3, five former students filed a 109-page complaint, seeking to act as representatives for hundreds of thousands who say they have been defrauded by the Carmel, Ind.-based school. Their goal is to have the debt they owe the school canceled. A Newark class action lawyer is following this story closely.

ITT filed for bankruptcy last year after the Education Department cut off the company’s access to federal student aid.

By the time it declared bankruptcy in September, ITT Tech had been subject to lawsuits from the Consumer Financial Protection Bureau, the Securities and Exchange Commission and the Massachusetts and New Mexico attorneys general.

ITT Tech students unsure about next step after closure Government agencies scrutinized the company over alleged failure to disclose bad loans to investors, inflated job placement numbers and aggressive recruiting tactics.

The students' complaint seeks to establish that ITT defrauded students who attended the school during the last 10 years.

The Legal Services Center of Harvard Law School is representing the students. Eileen Connor, director of litigation for the center's Project on Predatory Student Lending, is the lead attorney representing the students. She was unavailable for comment. A Los Angeles bankruptcy attorney is reviewing the details of this case.

Along with legal documents, the students filed more than a thousand pages of first-hand accounts from 541 fellow students who attended ITT, affidavits from several whistleblowers and evidence developed from state and federal law enforcement investigations.

Hundreds of unidentified Indiana students gave testimony about how the loans they racked up while attending the school ruined their credit scores, left them destitute and caused them mental health issues.

One student who was enrolled in the criminal justice program at the Carmel campus from September 2010 to January 2012 said, “I’ve been in financial hardship since then. I do not earn much in my current job. I work as a grocery stocker, and most of my check goes to paying off my loan. I had my hours cut about a year ago, and this led me to default on my loan, which has affected me greatly because I am not eligible for credit anywhere. My credit score is horrible because of this school. I cannot afford anything. I can barely make ends meet.”

Testimonials have come from throughout the U.S. One student who was enrolled in ITT's Network System Administration program at a Washington campus stated, "I joined the Army to pay for school, and ITT Tech mislead my dreams of higher education. Now I'm $10,000 in debt and have nothing to show for it. I'm constantly being harassed by collection agencies and it's making me depressed."

Students who have their pay garnished to satisfy loans are often struggling to support themselves with low-wage or minimum-wage jobs that are a far cry from the high-salary positions promised by ITT recruiters, according to the complaint.

ITT Tech was one of the country’s largest for-profit college chains. Over the last decade, it took in more than $11 billion in revenue, 98% of which came in the form of tuition, according to the Legal Services Center of Harvard Law School. The center said 76% of the tuition was paid through federal student aid.

Originally part of the conglomerate ITT, the school spun off as its own publicly traded entity in 1999.

At the time of bankruptcy, the company operated 137 campuses in 39 states, providing career-oriented programs to 43,000 students under the names ITT Technical Institute and Daniel Webster College.

ITT's closure displaced more than 35,000 students and more than 8,000 employees.

ITT reported assets of $389 million and liabilities of $1.1 billion to the bankruptcy court. The company’s assets include almost $80 million owed by ITT students who were enrolled at the time of the bankruptcy filing.

The students request a court order certifying the case as a class action, an injunction ordering ITT from collecting on all private student loans administered by ITT, actual and compensatory damages against ITT in an amount to be determined and an order awarding disbursements, costs and attorney's fees.

Deborah J. Caruso, the Chapter 7 trustee appointed by the U.S. Bankruptcy Court to oversee the liquidation, responded to the students' lawsuit in an email.

“Since the filing of these Chapter 7 cases in September, we have been working with state regulators, the SEC, the Consumer Financial Protection Bureau, and the Department of Education to better understand and address the causes of ITT’s collapse and develop a path forward,” Caruso said.


Original Story: www.wsj.com

Yahoo Inc. said Monday it will whittle down its board after completing its deal with Verizon Communications Inc., and several longtime directors, including Chief Executive Marissa Mayer and co-founder David Filo, will step down as directors.

After the sale of its core internet business, the company will change its name to Altaba Inc. from RemainCo, Yahoo said in a regulatory filing. Altaba’s remaining assets include Yahoo’s stake in Alibaba Group Holding Ltd. and Yahoo Japan. The name is a combination of the words “alternate” and “Alibaba,” a person familiar with the matter said.

Eric Brandt, who joined Yahoo’s board last March and is the former chief financial officer of Broadcom Corp., will become chairman of Altaba, according to the filing. He will be joined by four other directors who are currently on Yahoo’s board, including Thomas McInerney, who was part of the independent committee of Yahoo directors running the auction process last year.

The moves would happen after the closing of the roughly $4.8 billion sale to Verizon, which has been endangered by two huge hacks of Yahoo’s user data. In the filing, Yahoo said Verizon could terminate its purchase of Yahoo or renegotiate the terms because of the hacks. A New York cybersecurity lawyer is reviewing the details of this case.

Verizon has become less certain that the deal will go through after a second breach of one billion accounts was revealed last month. The breaches could be a material event that would allow Verizon to change the terms of the deal, executives have said.

Still, analysts say most of Yahoo’s value stems from its stakes in Alibaba and Yahoo Japan, not the core business sold to Verizon. The core business accounts for 10% of Yahoo’s market value, Evercore ISI analyst Ken Sena wrote in a Dec. 15 note. About 61% of Yahoo’s worth is tied to its stake in Alibaba, while 13% is linked to Yahoo Japan Corp., Mr. Sena wrote.

On Monday, Yahoo’s shares rose a penny to $41.35 in recent after-hours trading and Verizon’s are down three cents to $52.65.

Six Yahoo directors will be leaving after the Verizon sale, including Ms. Mayer, Mr. Filo and Maynard Webb Jr., a director since February 2012, who was named chairman in August 2013. Mr. Webb, as of Monday, became chairman emeritus.

Also leaving the board will be Jane Shaw, a former pharmaceutical industry executive who joined in 2014, as well as media executive Eddy Hartenstein and Richard Hill, former CEO of Novellus Systems Inc.

Ms. Mayer was named CEO of Yahoo after she came over from Google in 2012. She is expected to remain with Yahoo once it becomes part of Verizon. A New York truck accident lawyer is following this story closely.

Messrs. Hartenstein and Hill joined Yahoo’s board in early 2016 after being nominated by hedge fund Starboard Value LP. Two others nominated by Starboard, former banker Tor Braham and Starboard chief executive Jeffrey Smith, will stay on the board of Altaba.

At that time, the activist investor sought to replace the entire slate of directors, saying the board wasn’t making changes quickly enough.

16 April 2013

Increase in people who watch on mobile devices has broadcasters worried

Story originally appeared on Freep.

Some people have had it with TV. They've had enough of the 100-plus channel universe. They're tired of $100-plus monthly bills.

A growing number of them have stopped paying for cable and satellite TV service, and don't even use an antenna to get free signals. These people are watching shows and movies on the Internet, sometimes via cell phone. Last month, Nielsen started labeling people in this group Zero TV households, because they fall outside the traditional definition of a TV home. There are 5 million of these residences in the U.S., up from 2 million in 2007.

While show creators and networks make money from this group's viewing habits through deals with online video providers and from advertising on their own websites and apps, broadcasters only get paid when they relay such programming in traditional ways. Unless broadcasters can adapt to modern platforms, their revenue from Zero TV viewers will be zero.

"Getting broadcast programming on all the gizmos and gadgets -- like tablets, the backseats of cars, and laptops -- is hugely important," says Dennis Wharton, a spokesman for the National Association of Broadcasters.

Although Wharton says more than 130 TV stations in the U.S. are broadcasting live TV signals to mobile devices, few people have the tools to receive them. Most cell phones require an add-on device known as a dongle, but these gadgets are just starting to be sold.

Among this elusive group of consumers is Jeremy Carsen Young, a graphic designer, who is done with traditional TV. Young has a working antenna sitting unplugged on his back porch in Roanoke, Va., and he refuses to put it on the roof.

"I don't think we'd use it enough to justify having a big eyesore on the house," the 30-year-old says.

Nielsen is ready to count

Online video subscriptions from Netflix and Amazon -- which cost less than $15 a month combined -- have given him and his partner plenty to watch. They take in back episodes of AMC's "The Walking Dead" and the CW's "Supernatural," and they don't need more, he says.

For the first time, TV ratings giant Nielsen took a close look at this category of viewer in its quarterly video report released in March. It plans to measure their viewing of new TV shows starting this fall, with an eye toward incorporating the results in the formula used to calculate ad rates.

"Our commitment is to being able to measure the content, wherever it is," says Dounia Turrill, Nielsen's senior vice president of insights.

The Zero TV segment is increasingly important, because the number of people signing up for traditional TV service has ground to a standstill in the U.S.

Last year, the cable, satellite and telecoms providers added just 46,000 video customers collectively, according to research firm SNL Kagan. That is tiny when compared to the 974,000 new households created last year. While it's still 100.4 million homes, or 84.7% of all households, it's down from the peak of 87.3% in early 2010.

Nielsen's study suggests that this new group may have left traditional TV for good. While three-quarters actually have a physical TV set, only 18% are interested in hooking it up through a traditional pay TV subscription.

Zero TVers tend to be younger, single and without children. Nielsen's senior vice president of insights, Dounia Turrill, says part of the new monitoring regime is meant to help determine whether they'll change their behavior over time. "As these homes change life stage, what will happen to them?"

The TV industry has a host of buzz words to describe these non-traditionalist viewers. There are cord-cutters, who stop paying for TV completely and make do with online video and sometimes an antenna. There are cord-shavers, who reduce the number of channels they subscribe to, or the number of rooms pay TV is in, to save money.

Never connected

Then there are the cord-nevers, young people who move out on their own and never set up a landline phone connection or a TV subscription. They usually make do with a broadband Internet connection, a computer, a cell phone and possibly a TV set that is not hooked up the traditional way.

That's the label given to the group by Richard Schneider, the president and founder of the online retailer Antennas Direct. The site is doing great business selling antennas capable of accepting free digital signals since the nation's transition to digital over-the-air broadcasts in 2009, and is on pace to sell nearly 600,000 units this year, up from a few dozen when it started in 2003.

That brings us to truck driver James Weitze. The 31-year-old satisfies his video fix with an iPhone. He often sleeps in his truck, and has no apartment. To be sure, he's an extreme case who doesn't fit into Nielsen's definition of a household in the first place. But he's watching Netflix enough to keep up with shows like "Weeds," "30 Rock," "Arrested Development," "Breaking Bad," "It's Always Sunny in Philadelphia" and "Sons of Anarchy."

He's not opposed to TV per se and misses some ESPN sports programs like the "X Games."

But he's so divorced from the traditional TV ecosystem, it could be hard to go back. It's become easier for him to navigate his smartphone than to figure out how to use a TV set-top box and the button-laden remote control.

"I'm pretty tech savvy, but the TV industry with the cable and the television and the boxes, you don't know how to use their equipment," he says. "I try to go over to my grandma's place and teach her how to do it. I can't even figure it out myself."

25 March 2013

Michael Roarty dies at 84; marketer helped build Anheuser-Busch brand

Michael J. Roarty, a retired marketing executive who helped build Anheuser-Busch beer brands into international powerhouses, died at a hospital in a St. Louis suburb Saturday, a day after suffering a heart attack. He was 84.
Roarty had been debilitated by strokes in recent years and had been in poor health.
As vice president and director of marketing from 1977 to 1990, Roarty was credited with helping St. Louis-based Anheuser-Busch more than double its U.S. market share to 43% from 21%.
Roarty oversaw famous advertising campaigns, including "Weekends were made for Michelob," "This Bud's for you," "Head for the mountains of Busch," and Bud Light's canine mascot Spuds McKenzie. He was inducted into the Advertising Hall of Fame in 1994.
"He could spot the ideas, guide the creative process and navigate it through the difficult approval process within a complicated corporate structure," said Bob Lachky, a former chief creative officer at Anheuser-Busch.
Roarty was also considered a pioneer of sports marketing, branching out Anheuser-Busch's advertising complex from stadium signage to include race car sponsorship and the made-for-Super Bowl Sunday Bud Bowl.
He also is the executive who persuaded the brewer in 1980 to give financial support to a then-struggling all-sports TV network, ESPN.
"We gave them $1 million that first year. And if we hadn't, they'd have gone under," Roarty told the St. Louis Post-Dispatch a few months before he retired in 1994. "I believed the beer drinker was a sports lover.
"The next year we gave them $5 million. I think it turned out to be the best investment we've ever made."
In 1993, the Sporting News named him the sixth-most powerful figure in American sports.
Born Aug. 24, 1928, in Detroit, Roarty was the son of Irish immigrants. His father, John, was active in Sinn Fein, the political party closely associated with the Irish Republican Army.
In 1953, when he was a student at the University of Detroit, Roarty had a job selling and promoting beer in Detroit's East Side taverns and stores. He became such a familiar figure to saloonkeepers and other neighborhood characters that many called him "Mr. Budweiser."
He worked as a brand manager for Anheuser-Busch in Detroit, Chicago, Denver and Kansas City on his way up the corporate ladder.
Roarty, who first visited Ireland with his family in 1936, remained active in the Irish American community throughout his life. In 1991, he was named Irish-American of the Year by Irish America magazine. In 1994, Roarty was grand marshal of Dublin's St. Patrick's Day Parade; at the time, he was only the fourth American to have that honor.
He is survived by his wife of more than 58 years, Lillian; a son, a daughter, four grandchildren and a brother.
Kohler writes for the St. Louis Post-Dispatch and McClatchy Newspapers.

04 January 2013

No More Dollar Menu?

Story first appeared on usatoday.com.

Wendy's no longer thinks a hamburger has to be 99 cents to be a deal.

The fast-food company known for its Frosty shakes and square burgers has replaced its 99-cent value menu with a beefed-up array of options called "Right Price Right Size," with items ranging from 99 cents to $1.99.

At a time when costs for meat, cheese and other ingredients are rising, the revamped menu is intended to give budget-minded diners more options, while giving Wendy's more flexibility on pricing.

The switch to the "Right Price Right Size" value menu reflects the cost pressures faced by fast-food chains. Burger King and McDonald's have already moved past the $1 price point, offering tiered value menus that go up to around $2.

When it was introduced a decade ago, for example, McDonald's Dollar Menu included the Big 'N Tasty burger made with a quarter-pound beef patty. But the Dollar Menu has gradually gotten skimpier, with small fries being taken off the roster last year.

To ensure the profitability of its new value menu, Wendy's tinkered with the lineup and in some cases, raised prices. The Junior Cheeseburger Deluxe now costs $1.19 instead of 99 cents. And for 99 cents, customers now get four chicken nuggets instead of five. The plain Junior Cheeseburger, which had been taken off the menu, is back at 99 cents.

In all, there are now seven items that cost 99 cents on the new value menu, down from nine.

Although items on value menus tend to be less profitable, they play an important role in attracting customers who often end up spending more on other items. In testing in the past year, the "Right Price Right Size" menu not only boosted customer traffic, but also increased the average check size.

It grew because those customers tend to buy multiple products, noting that the vast majority of customers who ordered off the value menu bought items from the regular menu as well.

Wendy's isn't the only chain to tinker with its value offerings. McDonald's last year introduced its "Extra Value Menu," which offers items closer to the $2 price range. But after sales flagged, the company quickly went back to touting the Dollar Menu in advertising, noting that customers are focused on value in the uncertain economy.

Wendy's revamped approach also reflects the twin challenges facing traditional fast-food chains, which are scrambling to improve the reputation of their food even as they cater to budget-minded diners. As the popularity of chains such as Panera Bread and Chipotle Mexican Grill have raised expectations for food quality, traditional fast-food chains have stepped up their offerings.

Burger King made its french fries thicker and uses a different kind of bacon on its burgers. Taco Bell — known for its cheap eats — introduced a line of Cantina Bell bowls last year intended to appeal to a slightly more upscale crowd.

Wendy's, which is based in Dublin, Ohio, has in recent years introduced natural-cut french fries and premium offerings such as Dave's Hot 'N Juicy burger. Even as it touts its new value menu, Wendy's won't let up on that premium front. For example, executives have said the chain will introduce new breads for its sandwiches intended to improve perceptions about its food in the year ahead.

02 January 2013

California newspaper defies trend to shrink costs

originally appeared in The Associated Press:

New and expanded sections to cover business, automobiles and food. A nearly five-fold increase in community news pages and more investigative reporting. Even daily color comics.

It feels like a throwback to an earlier era at the Orange County Register, where a first-time newspaper owner is defying conventional wisdom by spending heavily to expand the printed edition and playing down digital formats.

The head of an investor group added about 75 journalists and, with 25 more coming, will have expanded the newsroom by half since his group bought the nation's 20th-largest newspaper by circulation in July.

Changes also include thicker pages with triple the number of colors to produce razor-sharp photos and graphics. By the end of March, the newspaper will have 40 percent more space than under previous owners, Freedom Communications Inc.

The investor group chief believes people will pay for high-quality news. His bet is remarkable in an industry where newspapers have shrunk their way to profits for years, slashing costs while seeking clicks on often-free websites to attract online advertising.

As more newspapers begin charging for online access, Kushner's spending spree is drawing close attention.

If he's successful, it's going to show the way for other papers to follow, according to the publisher of the Arkansas Democrat-Gazette and an early advocate of charging readers for online access.

Seated behind his large, clutter-free desk near shelves stacked with newspapers, the former Stanford University gymnast said his lack of industry experience may be a plus because he hasn't been through the tough times in newspapering.

So when we sit down and look at what's possible, our view of the world is different, he said. We're a little crazy in that we really do believe that we can grow this particular newspaper.

It's too early to know whether he's right. he said advertising revenues have grown, though he won't say how much.

Average daily circulation rose 5.3 percent as of Sept. 30 from a year earlier to 285,088 on weekdays and 387,547 on Sundays, bucking an industry decline of 0.2 percent, according to the Alliance for Audited Media.

One key test will be when the Register begins charging for online access sometime before the end of March. He said readers will pay the same as the print edition - a contrast to publications that charge online subscribers substantially less.

If you have a wonderful restaurant and it cost $10 to come in the front door, I've never understood why it should cost anything less to come through a side door, he said.

The value of the journalism isn't any less. The reporter isn't paid any less. The photographer isn't paid any less.

The investor group president who has a master's degree in organizational analysis, founded a business in the 1990s that allowed people to change their addresses online and later owned and managed a greeting-card company for seven years.

In 2010, he started an investors group, 2100 Trust LLC, to scout for newspapers, flirting with The Boston Globe and later with MaineToday Media Inc., publisher of The Portland Press Herald.

The president of The Portland Newspaper Guild, said the group chief presented the union with 50 demands, including a longer work week and increases in employee health care contributions.

We got off to such a bad start that it was hard to recover, according to the Newspaper Guild president, who is skeptical that the investor group's print bet will succeed.

The investor group president settled on Freedom and its 107-year-old flagship paper, the Register, for an undisclosed sum. The newspaper serves affluent, growing, well-educated and ethnically diverse communities near Los Angeles, bolstered by 24 community publications.

He became Freedom's chief executive and the Register's publisher, working five days a week at the company's Santa Ana headquarters and flying cross-country to his wife and three children in the Boston area.

Many executives stayed put, including the top editor, who joined the Register in 1989.

The newsroom is nearing 300 employees, including about 40 year-round interns who are paid $10 an hour and provided housing. The new owners eliminated 401(k) matches at the non-union newspaper and have resisted pay raises.

Like other newspapers, the Register experimented over the last decade as its circulation tumbled 40 percent and the newsroom shrank in half. A tabloid paper featuring snappier stories failed, as did a weekly entertainment publication.

Reporters got ever-rising numerical targets to generate Web traffic, with constant reminders of how they fared against peers. It was more like a sales floor than a newsroom, one columnist wrote in a recent piece hailing the Register's reawakening.

To focus more on the print edition, the Register slashed the number of blogs from around 40 to less than a dozen. It scrapped an iPad application for news, traffic and weather.

The new owners have introduced a daily page for coverage of a major development, began sending a reporter and photographer to every one of the region's 50 high school football games on Fridays and doubled editorial pages.

Reporters have been encouraged to dig deeper and expand sources. It's a new experience for (a publisher) to say, Are you sure you have enough investigative reporters? I think you ought to hire more, he said.

The Register's editorial page - once a strong libertarian voice - didn't endorse for president in November. The new owner has contributed to Democrats such as Barack Obama and Joe Biden and moderate Republicans, including Sen. Susan Collins of Maine.

He declined to discuss his political views and said they are separate from his work at the Register.

He is looking to buy more newspapers, telling Register staff last year that he had a list of 15 that fit his criteria. In an interview, he expressed interest in Tribune Co. newspapers, which include the Chicago Tribune, Los Angeles Times and Baltimore Sun.

Some readers and employees question how much the new owners will stomach if growth stalls. The owner insisted he is committed, saying the Register has a strong balance sheet and doesn't answer to shareholders seeking quick returns.

If you don't have a clear tangible way to grow revenue you only have one alternative and that's to cut costs, he said. That path may well work. That's not the path that we're on here.