Published in the Current and the American Journal
Facing as many as 13 class-action securities fraud lawsuits, profit restatements, downgrades from investment rating firms and a crisis of employee morale, UnumProvident fired long-time chairman and CEO Harold Chandler and replaced him March 27 with interim president and CEO Thomas Watjen, Chandler’s right-hand man.
Layoffs and organizational restructuring are not on the table, said the company’s spokeswoman in Portland, Linnea Olsen. “We need everyone that’s here,” she said. UnumProvident, which sells disability insurance, is headquartered in Chattanooga, Tenn.
The board’s firing of Chandler “is not something that was caused by any one event,” Olsen said. Instead, it was “the cumulative effect of many things.”
Among those were a $29.1 million restated reduction in earnings for 2000, 2001 and 2002, the result of a Securities and Exchange Commission inquiry into the company’s investment disclosures.
And in the past three weeks, several investment-rating firms, including Standard and Poor’s and Moody’s, have downgraded UnumProvident stock, citing concerns the company is over-invested in high-risk companies.
The company recently sold $500 million worth of these below-investment-grade bonds specifically to placate rating agencies, Olsen said.
But the company still believes in its business plan and will continue to implement it quickly, Watjen told analysts in a Monday conference call briefing.
A crisis of confidence and leadership led to Chandler’s ouster, Olsen said. He will get $8.5 million in severance pay, roughly four times his annual pay in 2000, and $8.5 million in pension benefits.
Chandler joined Provident as its CEO in 1993, and presided over the merger with the Portland-based Unum in 1999, after which he remained CEO of the combined company. One analyst said in the conference call that she was glad that Watjen would stay on “to provide continuity,” while another expressed surprise that one architect of the company’s plan would be fired and the other would take his place.
Watjen said he would keep the plan moving, but would have a different leadership style from Chandler, who he said was less decisive, less inclusive and less communicative than Watjen will be. He said his new style would become evident very shortly, and pointed to the increased disclosures in the company’s annual report, filed with the SEC Monday, as an example of more communications. He said company employees were notified of the management change over the weekend and would be involved in further company-wide discussions in the coming days, to allow them to understand what happened.
In the coming months, UnumProvident will be “out in the marketplace” seeking to raise as much as $1.5 billion, according to a November 2002 filing with the SEC. Olsen said the company would be looking for between $500 million and $1 billion, while Watjen told analysts Monday that the figure would be between $750 million and $1 billion.
The money is not earmarked for spending but instead will be used as capital on hand to offset concerns held by investment analysts, Olsen said.
“We will continue to have investment losses,” she said. Rating agencies are therefore looking for additional capital on hand to cushion those losses, she said.
Some of the capital will come from internal processes, such as regrouping some old individual disability policies into group policies, and there may be further sales of below-investment-grade bonds, she said.
Also, inter-company loans from the insurance subsidiaries to the holding company will be repaid, giving the subsidiaries more ready cash, Olsen said.
She expects there will be a combination of stock sales and convertible bonds. “We will not be issuing straight debt,” Olsen said. Initial indications from investment banks lead her to believe the company will raise the money it needs, she said.
The company also faces 13 class-action lawsuits alleging the company committed securities fraud by failing to truthfully disclose financial performance information to shareholders and prospective shareholders.
Olsen discounted the lawsuits, saying, “it’s an annoyance.” She said many of them were filed by law firms that specialize in stock-price collapses. The last group of suits was filed after the price dropped 62 percent, bottoming out below $6 per share.
“None of those classes have been certified,” Olsen said. Without a judge’s certification that a broad class of people was harmed, the suits cannot proceed.
The company also was fined $1 million by Georgia’s insurance commissioner for violations of that state’s insurance code during the merger of Unum and Provident in 1999.
“It was a slap on the wrist,” Olsen said.
The company’s search for a new, permanent CEO will begin shortly, and interim CEO Watjen will be considered for the position, Olsen said. “We have a real sense of urgency about this,” she said.
Wednesday, April 2, 2003
Wednesday, March 26, 2003
Chancellor Gardens changes hands
Published in the Current and the American Journal
With its principal owner in bankruptcy, the company that owned Chancellor Gardens on Scott Dyer Road has sold the Cape Elizabeth assisted living home, as well as a sister facility in Saco, to Commonwealth Communities of Massachusetts. The home has been renamed Village Crossings of Cape Elizabeth.
Abraham Gosman, who lives in Florida, was the majority owner of the company that owned Chancellor Gardens and Chancellor Place.
He was also a founder of Carematrix, the company that managed the Chancellor properties. Carematrix will not continue its management functions, according to Beth Derrico, a spokeswoman for the company.
Gosman, who made millions in real estate and healthcare, filed for bankruptcy in 2001, according to William King of Development Specialists Inc., the Miami-based firm that was appointed by the court as trustee for Gosman’s assets.
His filing was cited as an example of a problem some legislators see with the federal bankruptcy system – the unlimited homestead exemption. Sen. Herb Kohl, D-Wisc., told the U.S. Senate in March 2001 that Gosman, while owing as much as $233 million, was keeping a 64,000-square-foot mansion in West Palm Beach, Fla.
In his Maine business dealings, Gosman had guaranteed a mortgage taken out by the Chancellor company, with the two homes as collateral. “The value (of the properties) was significantly less than the mortgage,” King said.
Rather than foreclosing on the homes, the lender agreed to cooperate in the sale of the properties and take the proceeds as partial payment of the debt, King said.
The change of ownership took effect March 1, bringing Chancellor Gardens and Chancellor Place in Saco into a company that already operates 12 nursing homes and rehabilitation facilities, six assisted living homes and four specialized hospitals in Massachusetts.
“This is our first step into Maine,” said David Calendrella, vice president of operations for Commonwealth Communities.
Last year Commonwealth bought two Massachusetts nursing homes from the same owners.
“They proved to be quality facilities,” Calendrella said. That experience led to this recent deal.
“We’re very bullish on the Maine marketplace,” he said.
The company does not have significant plans to change things at Chancellor Gardens. “At the moment, the plan is to introduce ourselves as the new owners,” Calendrella said. No staff changes are in the works, he said. Everyone has signed on with the new owners.
Calendrella plans to pay close attention to hiring practices and employee supervision, in the wake of an employee’s February arrest on charges of stealing medication from several patients. He said the company would be open about any problems that might arise.
It is the second turnover of a senior living facility on Scott Dyer Road in three months. In January Haven Healthcare of Cromwell, Conn., took over the management of the Viking Nursing Home and Crescent House, with plans to take ownership in the next several months.
With its principal owner in bankruptcy, the company that owned Chancellor Gardens on Scott Dyer Road has sold the Cape Elizabeth assisted living home, as well as a sister facility in Saco, to Commonwealth Communities of Massachusetts. The home has been renamed Village Crossings of Cape Elizabeth.
Abraham Gosman, who lives in Florida, was the majority owner of the company that owned Chancellor Gardens and Chancellor Place.
He was also a founder of Carematrix, the company that managed the Chancellor properties. Carematrix will not continue its management functions, according to Beth Derrico, a spokeswoman for the company.
Gosman, who made millions in real estate and healthcare, filed for bankruptcy in 2001, according to William King of Development Specialists Inc., the Miami-based firm that was appointed by the court as trustee for Gosman’s assets.
His filing was cited as an example of a problem some legislators see with the federal bankruptcy system – the unlimited homestead exemption. Sen. Herb Kohl, D-Wisc., told the U.S. Senate in March 2001 that Gosman, while owing as much as $233 million, was keeping a 64,000-square-foot mansion in West Palm Beach, Fla.
In his Maine business dealings, Gosman had guaranteed a mortgage taken out by the Chancellor company, with the two homes as collateral. “The value (of the properties) was significantly less than the mortgage,” King said.
Rather than foreclosing on the homes, the lender agreed to cooperate in the sale of the properties and take the proceeds as partial payment of the debt, King said.
The change of ownership took effect March 1, bringing Chancellor Gardens and Chancellor Place in Saco into a company that already operates 12 nursing homes and rehabilitation facilities, six assisted living homes and four specialized hospitals in Massachusetts.
“This is our first step into Maine,” said David Calendrella, vice president of operations for Commonwealth Communities.
Last year Commonwealth bought two Massachusetts nursing homes from the same owners.
“They proved to be quality facilities,” Calendrella said. That experience led to this recent deal.
“We’re very bullish on the Maine marketplace,” he said.
The company does not have significant plans to change things at Chancellor Gardens. “At the moment, the plan is to introduce ourselves as the new owners,” Calendrella said. No staff changes are in the works, he said. Everyone has signed on with the new owners.
Calendrella plans to pay close attention to hiring practices and employee supervision, in the wake of an employee’s February arrest on charges of stealing medication from several patients. He said the company would be open about any problems that might arise.
It is the second turnover of a senior living facility on Scott Dyer Road in three months. In January Haven Healthcare of Cromwell, Conn., took over the management of the Viking Nursing Home and Crescent House, with plans to take ownership in the next several months.
Thursday, March 20, 2003
Bliss wants to lower voting age to 17
Published in the Current
Rep. Larry Bliss, D-Cape Elizabeth and South Portland, is the lead co-sponsor of a bill that would lower Maine’s voting age to 17. He and bill sponsor Rep. Glenn Cummings, D-Portland, have been touring the area talking to high school students about it.
The reaction has been mixed, Bliss said. The 18-year-olds in the classes aren’t impressed by the idea, while the 17-year-olds really like it. Bliss said he and
Cummings, both former high school history and government teachers, want to make government more accessible to young people.
“If you’re 17 years old when you’re learning about how the government works, you ought to be able to have a say in it,” Bliss said. Further, many 17-year-olds in Maine are paying income tax and have no voice in how that money is spent.
Rep. Larry Bliss, D-Cape Elizabeth and South Portland, is the lead co-sponsor of a bill that would lower Maine’s voting age to 17. He and bill sponsor Rep. Glenn Cummings, D-Portland, have been touring the area talking to high school students about it.
The reaction has been mixed, Bliss said. The 18-year-olds in the classes aren’t impressed by the idea, while the 17-year-olds really like it. Bliss said he and
Cummings, both former high school history and government teachers, want to make government more accessible to young people.
“If you’re 17 years old when you’re learning about how the government works, you ought to be able to have a say in it,” Bliss said. Further, many 17-year-olds in Maine are paying income tax and have no voice in how that money is spent.
Lady ghost roams Crescent Beach
Published in the Current
Cape Elizabeth’s resident ghost, the “Lady in White” of Crescent Beach, made a cameo appearance in a lecture at the Cape Elizabeth Historic Preservation Society’s meeting earlier this month.
Bill Thomson of Kennebunk, a retired history professor from Salem Teachers College in Massachusetts, spoke on ghosts and coastal hauntings in New England. He first addressed what a ghost is, explaining that “98 percent of all ghost stories can be explained” by something rational, rather than supernatural.
He told of a Maine landlord who had a hard time keeping tenants in an apartment; all of them complained of an eerie singing sound coming from one particular wall. The tenants blamed a ghost. Eventually the landlord got tired of the problem and took a shotgun to the wall, Thomson said. He discovered an old saw hanging inside the wall, and rubbing against a partly exposed nail in such a way to make a singing or screeching noise.
It is the other 2 percent of ghost stories that interest Thomson, particularly
vivid smells, unexplained noises and voices, moving furniture, appliances going on and off for no reason and apparitions.
He has a theory about visions people have of ghosts: Living people emit energy in “waves,” which intensify at times of great stress. Many ghosts are of people who have died violently, and therefore would have put out a lot of these energy waves just before they died.
Thomson theorizes that those waves remain in the room or building where the person died, “bouncing around.” When other people come into that room and, by virtue of their own psychological situations, become attuned to the frequency of those waves, they see the vision.
He admits it sounds outlandish, but said he didn’t believe in ghosts for a long time, until he began studying them and experiencing ghostly phenomena.
When he was filming a special on hauntings for a TV network, Thomson was in the Kennebunkport Inn, which supposedly is haunted by “Cyrus the Ghost.” When filming a segment, a red ball appeared on a television monitor and bounced all over the screen.
“I never believed in the stuff before I saw it,” Thomson said.
Cape residents have seen their share, too.
Crescent Beach is home to such a haunting. Lydia Clark, a 24-year-old daughter of a Portland businessman, had been sent to Boston to buy a wedding dress. She was returning with her new dress on the schooner Charles on July 12, 1807, when it was caught by
a storm just south of Portland Head, and wrecked on Little Island Ledge.
Clark drowned and washed up on Crescent Beach. Beside her in the morning was her trunk, containing the new wedding gown. Since then, people have seen a figure in white, with an anxious expression on her face, pacing the beach.
There may be houses in town that are haunted, too. Beckett’s Castle on Singles Road may be haunted by Sylvester Beckett, who built the home and died in 1882. While many hotels and bed-and-breakfasts advertise their ghosts to attract spirit-loving guests, most homeowners keep mum about their ghosts, fearful that potential buyers might lose interest or scuttle the deal.
And though there are 11 haunted lighthouses in Maine, none of those are very close by. “Portland Head Light is not haunted,” Thomson said, later confirming that the others are without ghosts, too.
Cape Elizabeth’s resident ghost, the “Lady in White” of Crescent Beach, made a cameo appearance in a lecture at the Cape Elizabeth Historic Preservation Society’s meeting earlier this month.
Bill Thomson of Kennebunk, a retired history professor from Salem Teachers College in Massachusetts, spoke on ghosts and coastal hauntings in New England. He first addressed what a ghost is, explaining that “98 percent of all ghost stories can be explained” by something rational, rather than supernatural.
He told of a Maine landlord who had a hard time keeping tenants in an apartment; all of them complained of an eerie singing sound coming from one particular wall. The tenants blamed a ghost. Eventually the landlord got tired of the problem and took a shotgun to the wall, Thomson said. He discovered an old saw hanging inside the wall, and rubbing against a partly exposed nail in such a way to make a singing or screeching noise.
It is the other 2 percent of ghost stories that interest Thomson, particularly
vivid smells, unexplained noises and voices, moving furniture, appliances going on and off for no reason and apparitions.
He has a theory about visions people have of ghosts: Living people emit energy in “waves,” which intensify at times of great stress. Many ghosts are of people who have died violently, and therefore would have put out a lot of these energy waves just before they died.
Thomson theorizes that those waves remain in the room or building where the person died, “bouncing around.” When other people come into that room and, by virtue of their own psychological situations, become attuned to the frequency of those waves, they see the vision.
He admits it sounds outlandish, but said he didn’t believe in ghosts for a long time, until he began studying them and experiencing ghostly phenomena.
When he was filming a special on hauntings for a TV network, Thomson was in the Kennebunkport Inn, which supposedly is haunted by “Cyrus the Ghost.” When filming a segment, a red ball appeared on a television monitor and bounced all over the screen.
“I never believed in the stuff before I saw it,” Thomson said.
Cape residents have seen their share, too.
Crescent Beach is home to such a haunting. Lydia Clark, a 24-year-old daughter of a Portland businessman, had been sent to Boston to buy a wedding dress. She was returning with her new dress on the schooner Charles on July 12, 1807, when it was caught by
a storm just south of Portland Head, and wrecked on Little Island Ledge.
Clark drowned and washed up on Crescent Beach. Beside her in the morning was her trunk, containing the new wedding gown. Since then, people have seen a figure in white, with an anxious expression on her face, pacing the beach.
There may be houses in town that are haunted, too. Beckett’s Castle on Singles Road may be haunted by Sylvester Beckett, who built the home and died in 1882. While many hotels and bed-and-breakfasts advertise their ghosts to attract spirit-loving guests, most homeowners keep mum about their ghosts, fearful that potential buyers might lose interest or scuttle the deal.
And though there are 11 haunted lighthouses in Maine, none of those are very close by. “Portland Head Light is not haunted,” Thomson said, later confirming that the others are without ghosts, too.
Cape kids sending troops cookies
Published in the Current
They didn’t do it for the fame, and they don’t support war, but two Cape kids are sending Girl Scout cookies to U.S. troops in the Middle East.
After watching the evening television news last week, 11-year-old
twins Jonathan and Lexi Bass were moved to do something to support the troops they had seen interviewed in the Kuwaiti desert.
The soldiers didn’t have much to do, and were feeling both proud and worried about the prospect of serving their country in wartime. Lexi, a Girl Scout, had loads of boxes of Girl Scout cookies in the back hallway ready for delivery, and the pair decided to buy some more for the troops.
Jonathan and Lexi wrote a letter to the people who live in their neighborhood off Mitchell Road, explaining what they had seen on the news and what they wanted to do. They asked for donations, saying the soldiers “were very serious and very nervous” about war, and were in the desert without their families.
It was Tuesday night. By Saturday, neighbors had donated enough money to buy over 100 boxes of Girl Scout cookies. Some neighbors sent notes with their donations, including one from a woman who said she didn’t support the war, but her husband had served in Vietnam, and she wanted to be sure to support the troops.
Jonathan and Lexi spent Sunday packing the cookies up and getting set to send them off, with notes saying “Thinking of you from Cape Elizabeth, Maine.”
Because of increased security, sending unmarked boxes to “any soldier” in the Persian Gulf region is complicated, so the kids are making arrangements to send them through the USO.
They didn’t do it for the fame, and they don’t support war, but two Cape kids are sending Girl Scout cookies to U.S. troops in the Middle East.
After watching the evening television news last week, 11-year-old
twins Jonathan and Lexi Bass were moved to do something to support the troops they had seen interviewed in the Kuwaiti desert.
The soldiers didn’t have much to do, and were feeling both proud and worried about the prospect of serving their country in wartime. Lexi, a Girl Scout, had loads of boxes of Girl Scout cookies in the back hallway ready for delivery, and the pair decided to buy some more for the troops.
Jonathan and Lexi wrote a letter to the people who live in their neighborhood off Mitchell Road, explaining what they had seen on the news and what they wanted to do. They asked for donations, saying the soldiers “were very serious and very nervous” about war, and were in the desert without their families.
It was Tuesday night. By Saturday, neighbors had donated enough money to buy over 100 boxes of Girl Scout cookies. Some neighbors sent notes with their donations, including one from a woman who said she didn’t support the war, but her husband had served in Vietnam, and she wanted to be sure to support the troops.
Jonathan and Lexi spent Sunday packing the cookies up and getting set to send them off, with notes saying “Thinking of you from Cape Elizabeth, Maine.”
Because of increased security, sending unmarked boxes to “any soldier” in the Persian Gulf region is complicated, so the kids are making arrangements to send them through the USO.
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