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Sunday, 24 February 2008 19:00

D&O coverage

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Directors and officers today face significantly more liability than in past years as corporate scandals become more visible. The fundamental principles governing their conduct come under increasing judicial and regulatory scrutiny due, in large part, to recent corruption. The Sarbanes-Oxley Act, which was signed into law in 2002, expanded the responsibilities as well as the potential liabilities of corporate officers and directors. Although this legislation protects shareholders and is expected to improve corporate governance, it also bears the risk of increasing the number of litigations, says Victor Farfan, commercial insurance broker, with Westland Insurance. Increased corporate governance has heightened the…
Sunday, 24 February 2008 19:00

Cultural revolution

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When Rick Eiserman became CEO of the Southern California branch of Young & Rubicam Brands, the advertising and marketing agency’s conference room was almost entirely filled by a massive wooden table. The table was where the agency’s executives met and did business with its senior clients, and 40 people could fit around it. Not surprisingly, it caused quite a stir when Eiserman ordered it taken out. The table, which had to be disassembled to move it out of the boardroom, was rebuilt in a large open area of the organization, where it became a lunch table — and more often…
Tuesday, 29 January 2008 19:00

Efficient projects

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Today, more than ever, it’s important to avoid costly delays and unexpected overruns associated with providing solutions to corporate real estate needs. As vacancy rates drop, landlord-driven markets strike out at tenants with a harsh onetwo punch. Not only are rents on the rise, but the Tenant Improvement Allowance is shrinking while the cost of construction and related services grows. Rick Martin, who leads project management activities for CresaPartners of Orange County, says he believes this should be anticipated, negotiated and actively managed as part of the real estate transaction process. Smart Business talked to Martin about keeping project costs…
Tuesday, 29 January 2008 19:00

A two-way street

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Forging a relationship with your banker can pay huge dividends. By openly and frequently communicating your business needs, you allow your banker to become more proactive and less reactive. A collaborative banking relationship benefits all parties involved: Companies receive the support they need and bankers have the opportunity to offer targeted banking solutions. In order to fully take advantage of your bank’s products and services, it is important to meet with your banker on a consistent basis and provide as much information as possible. “I’ve never heard of a situation where we had too much information — the more the…
Tuesday, 29 January 2008 19:00

Turning up the heat

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When Steve Carley took over as president and CEO of El Pollo Loco Inc. seven years ago, he wondered how his employees could be concentrating on cooking the franchise’s signature flame-grilled chicken when they were busy trying to cobble together a working computer system to take customers’ orders. It was one of many problems that was holding back the potential of the chain. Not only was the technology woefully obsolete, the franchise owners were grumpy, and the company had lost its focus. “We had a whole range of things we had to deal with, starting with a large amount of…
Wednesday, 26 December 2007 19:00

The business of medicine

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While the fate of California health care reform continues to be debated, one topic is not up for debate: Where goes California health care goes the rest of the nation. California has the largest U.S. population (36.5 million) and the most hospitals; it’s the incubator for clinical advances, technological breakthroughs, innovative payment vehicles, regulatory requirements and multi-cultural approaches to disease; and at 6.8 million has the highest number of uninsured, most from working families. “When 47 percent of hospitals in Orange County and 54 percent in Los Angeles County operate in the red, and positive margins for the remaining average…
Wednesday, 26 December 2007 19:00

The Smith file

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Birthplace: Chicago What was your very first job? Clerk for A&P. I actually used to get my paycheck in a brown envelope, and it was just cash. Whom do you admire most in business and why? Two people, (starting) with Carly Fiorina. [I] admire the fact that she is a female and continues to focus on leadership and results. I’ve been impressed with her from afar. Second, Jack Welch, because of what he did with GE and the focus on operational excellence and growing leaders because that’s so critical in business. My last five years working for Xerox, I was…
Sunday, 25 November 2007 19:00

Letters of intent

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Formal letters of intent are usually integral to the process of consummating a business transaction — especially larger more complex transactions. Those letters can be legally binding or nonbinding. Confuse the issue, and it can become a costly proposition. In order to avoid any missteps when drafting a letter of intent, it is absolutely necessary to consult with an attorney. “The main reason to consult an attorney is to create a well-drafted and well-thought-out letter of intent,” says Michael J. Petersen, a partner with Shulman Hodges & Bastian LLP. “A lawyer experienced in transactional work can help a client avoid…
Sunday, 25 November 2007 19:00

Internal strength

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When Clark Construction Group LLC came to the West Coast 14 years ago, Richard M. Heim’s goal was simply to survive. Though the construction services juggernaut had been very successful on the East Coast, Heim was suddenly 3,000 miles from the home office with a new territory and new challenges. To build up the business, there was one thing Heim, president of Clark’s western region, decided would grow the new region with the same success as the old — his people. When the company was ready to move forward, he always looked within his existing people to find the next…
Friday, 26 October 2007 20:00

Beyond the base rate

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It’s assumed that determining the expense of leasing property involves a simple calculation of multiplying your base rate times your square footage. In reality, the total cost of occupancy includes many additional expenses that can dramatically increase a company’s real estate expenditures. If you don’t understand all of the factors or work with a real estate adviser that does, they could cause a significant impact on your earnings and cash flow. “Many companies make the mistake of focusing on the lease rate to determine their costs.” says David Salazar, senior vice president with CresaPartners LLC in Orange County. “They think…
Friday, 26 October 2007 20:00

New accounting standards

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Beginning with fiscal year 2008, companies may begin using fair value accounting standards to report financial assets and liabilities. Two new accounting standards: The Fair Value Option for Financial Assets and Financial Liabilities (FAS 159) and Fair Values Measurements (FAS 157) will provide business entities the option to report selected financial assets and liabilities at their fair value as opposed to reporting them under historical cost accounting approaches. The standards permit an entity to elect the fair-value option on an instrument-by-instrument basis, with one caveat — once the election is made, it’s irrevocable.In concept, FAS 159 tracks with recent trends…
Tuesday, 25 September 2007 20:00

Behind the scenes of WC insurance

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The 2003 workers’ compensation (WC) reforms created an extremely competitive workers’ compensation market in California. Numerous new insurance carriers emerged on the scene and a fierce competition among them has been pushing the rates down to new, unprecedented levels. Many businesses enjoy rates as low as 50 percent of the prereform levels. Business owners noticed the extremely competitive market and are actively shopping their workers’ compensation insurance for lower rates. There is a catch, however, says Elizabeth Lisek, CIC, a commercial insurance broker with Westland Insurance Brokers. “While lowering the rates is extremely important for any business owner and should…
Tuesday, 25 September 2007 20:00

Financing inventory

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Trade-cycle financing refers to an assortment of financing solutions targeted towards companies that import and/or export. Every company has a unique sales cycle; each distinct phase places different challenges on a company's finances. “All companies have a trade cycle specific to their industry and company operations,” explains Caroline Brown, first vice president of Comerica Bank. “The cycle involves the purchase of raw materials, the manufacture of goods, an inventory period, the shipment of product, and, ultimately, the collection of funds and receivables.” Smart Business spoke with Brown about trade-cycle financing, how a company can benefit from this type of financing…
Tuesday, 25 September 2007 20:00

Intensive care

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It would have been an ambitious proposal for just about any organization, but a plan rolled out to its board in February to spend a half-billion dollars on a capital expansion was particularly bold for Children’s Hospital of Orange County, an institution in genuine danger of financial failure a decade before. “We just took a plan to our board to build a new patient tower that has a price tag of $510 million, and we’re moving forward with it,” says Kim Cripe, president and CEO. “It really is ironic. Exactly 10 years ago, I was sitting in front of them…
Sunday, 26 August 2007 20:00

Donnie Crevier

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Donnie Crevier was never a privileged heir. Though his father and uncle founded Crevier BMW 36 years ago, he didn’t glide through a life ripe with undeserving spoils. On the contrary, his adolescence was an exercise in challenge and resolve. The admittedly “rough, little kid” spent time involved in various youth organizations, where he learned how to feel better about himself and the decisions he was making, he says. Now decades later, Crevier, president and CEO of Crevier BMW, is all about making others feel better about themselves. He is actively involved in the Boys and Girls Clubs of Laguna…
At the first sign of corporate financial difficulties, directors and officers should examine the effect of their decisions on a number of interest groups, according to Gary Pemberton, a litigation partner at Shulman Hodges & Bastian LLP. “You will be scrutinized,” Pemberton says. “Examine every decision you make. If your company ends up in bankruptcy, management’s prebankruptcy decisions may mean the difference between a creditor getting a nickel on the dollar or 50 cents on the dollar.” Smart Business spoke with Pemberton, a business and bankruptcy litigator who has tried a number of cases involving failing companies, and asked him…
Sunday, 26 August 2007 20:00

The Mussallem file

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Birthplace: Gary, Ind. Education: Undergraduate degree, Rose-Hulman Institute of Technology; graduate studies at Rutgers University First job: Production supervisor at Union Carbide What’s your most important business lesson? I think it’s really important to live through a business cycle. When you come into a new job, you’re full of enthusiasm, you’re convinced you’re much better than the guy or gal before you, and you put your mark on it and a lot of changes in place. I think it’s really healthy to live with that business long enough to live through a business cycle and have to fix your own…
Thursday, 26 July 2007 20:00

Timothy A. Blett

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Timothy A. Blett didn’t want to leave college. From the intellectual stimulation to his time on the baseball field as a collegiate athlete, he loved the whole experience, so when it came time to enter the real world, Blett decided that he’d take the fundamentals that made him successful as a student athlete into the advertising field. Now the president of Doner Advertising Co.’s Newport Beach office, Blett pushes more than 110 employees to use a student mentality to study their clients while convincing the employees to employ an athlete mentality to stay on top of their game. Smart Business…
Thursday, 26 July 2007 20:00

Real estate blues?

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Real estate, to a large extent, drives Orange County’s economy. It is our biggest and most valuable commodity, and it affects local businesses on many levels. So it is not good news that real-estate-related bankruptcies have recently surged — especially among mortgage lenders who specialize in the sub-prime market. “There is more fallout from what is happening in the real estate market every day, and it seems to be spreading through the local business landscape,” says James Bastian, partner and head of Insolvency and Reorganization Practice at Shulman Hodges & Bastian LLP. Smart Business spoke to Bastian about what business…
Thursday, 26 July 2007 20:00

Buying in

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With interest rates still very low, it could be an opportune time for businesses to purchase the space they occupy. Not only does owner-occupied commercial real estate safeguard against dramatic rent increases, but it also provides a tax advantage. “One benefit is the depreciation. That’s the depreciation you don’t get when you lease but you do receive when you buy,” explains Joe Yurosek, senior vice president and regional group manager at Comerica Bank. Yurosek spoke to Smart Business about commonly overlooked real estate financing options, the pros and cons of fixed and variable rates and why a business that already…
Thursday, 26 July 2007 20:00

The Hayde file

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Birthplace: Compton, Calif. Education: One year in a Catholic seminary. Attended California State University Long Beach. Most of what I learned about business, I learned in the seminary. First job: I went to work for a small accounting firm, but I never did much accounting. Whom do you admire most in business and why? Tony Moiso, president and CEO of Rancho Mission Viejo Corp. Tony has the most caring attitude toward his people of anyone I’ve ever seen. What’s been your toughest business challenge? Terminating friends. Because of our culture, people become friends at Western. How would you describe your…
Monday, 25 June 2007 20:00

Real simple

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Most companies can effectively manage one or two or three facilities. There are many legal, tax, rent, and maintenance issues to consider, but a few properties in a single market can usually be understood and administered well. But what happens when you have 12 or 212 or 2,012 facilities? Unless your company specializes in real estate or wants to make a significant, long-term investment in a full-service, internal real estate department, the task of managing a growing list of properties can be overwhelming. That’s where corporate services step in to offer dedicated, comprehensive real estate services to clients on an…
Monday, 25 June 2007 20:00

The value of perinatal care

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The saying that an ounce of prevention is worth a pound of cure is especially true when it comes to delivering a healthy baby at the end of a high-risk pregnancy. Diabetes, infections or other complications greatly increase a pregnant woman’s chances of delivering a premature or sick infant. Fortunately for expectant mothers and fathers, proactive care from an experienced perinatologist can significantly improve the odds of delivering a healthy baby. For employers who bear the financial burden and social responsibility of providing health and disability insurance coverage to workers, this is good news. A perinatologist is an obstetrical subspecialist…
Monday, 25 June 2007 20:00

Choosing the right business entity

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When launching a new business venture, you must decide what form of business entity will provide the greatest tax savings and the best return to owners and investors. An initial public offering (IPO) is often regarded as the coveted prize at the end of the rainbow for many entrepreneurs, so the firm is structured as a C corporation. But upon reaching success, many businesses are sold before going public. Structuring as a C corporation might eliminate some of the tax advantages that could be realized in the short term as an S corporation or a partnership, and it may result…
Saturday, 26 May 2007 20:00

Mike Bradley

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While celebrating successes comes naturally to most, Mike Bradley has learned that mistakes can be just as rewarding. In building a culture aimed at empowering employees and collaborating on strategic decisions, the president of Wonderware understands that hiccups occur — and he chooses to use them as opportunities to improve. Wonderware, an automation software producer and business unit of British-based Invensys plc, employs more than 600 people worldwide. And while Bradley encourages all of his employees to be forthcoming with problems or issues that arise, he also insists that they speak up if they feel he has made a judgment…
Saturday, 26 May 2007 20:00

In-patient hospice care

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Hospice was originally envisioned to be a noninstitutional benefit that would provide end-of-life support for patients and their families. Because hospice care was primarily designed to be administered in an in-home setting, many people may not be aware that patients in acute care facilities can also receive the benefits of hospice. Patients who are too frail to go home or who enter an acute care facility when the end of life seems imminent can qualify for hospice services. Medicare provides coverage for hospice, including the cost of the hospital stay and limited medications. Hospice not only offers hospice-trained nursing staff…
Saturday, 26 May 2007 20:00

International business

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In today’s global economy, American companies are afforded tremendous opportunities to diversify business risks and capture additional market share. However, there are corresponding risks to the rewards that are associated with conducting business internationally. Highly volatile, any given currency fluctuates 1 percent during a 24-hour period, points out Gary Loe, vice president at Comerica Bank. This volatility translates into the need to manage the risk of rising or falling foreign exchange rates. “Identify your exposure and establish a floor or worst-rate scenario,” advises Loe. “Protect that rate by using one of your foreign exchange hedging vehicles.” Smart Business spoke with…