Welcome to the August 5 Monday Business Briefing.
This is your private business intelligence briefing, with Insider Louisville staff and contributors vetting tips collected during the past few days, hours and – more frequently – minutes before we post at 7:30 a.m.
Last week, we got all conceptual with our “The world is changing beneath our feet” edition of Monday Business Briefing. This week, we have a more actionable intel compilation of what’s going on around town including a couple of scoops, thank you very much.
• The Learning House is restructuring its leadership. The current CEO now is chairman of the board. There will be no CEO, with the distance-learning company led by a three-person executive team: Todd Zipper, John Anderson, Jim Litner.
This change was announced at 4 p.m. last Wednesday, which is when we called Learning House for comment. And we got that comment from Elliot Sloane, New York City-based spokesman for Weld North Holdings, the Greenwich, Conn.-based private equity firm that owns Learning House.
Sloane said former Learning House CEO David Richardson will no longer be involved in day-to-day operations, but will become chairman of the company’s board. Richardson will be involved in business development “because of his deep relationship with customers,” Sloane said.
Typically, Sloane said, Weld North Chairman Jonathan Grayer is chairman of the board of each of the fund’s businesses. “Because David has this deep relationship with customers, Weld is making an exception. David will be the chairman,” Sloane said.
Here’s the internal email in full:
The Learning House, Inc. (“TLH”) has become an important company in the higher education distance learning industry, having grown dramatically over the last six years. Since the acquisition by Weld North, significant investment has driven that growth by enabling our client schools to offer better products and services.
As you all know because you live it every day, while the market continues to grow, it also changes quickly. Our company needs to embrace its own evolution so that we can we can offer the most relevant products.
I am writing to inform all of you of some management changes we have made. Effective immediately, David Richardson will become Chairman of the Board of The Learning House. As you all know, David has been the driver of growth at TLH since he arrived on the scene in 2007. David understood before many others that small colleges and universities would need a set of distance learning products and services tailored to their specific needs. Parlaying the initial success of our founder, Dr. Denzil Edge, David turned TLH into an important player. We are grateful for all that he has accomplished and are thrilled that in his new role, David can continue to help us achieve our goals by working with our partner schools.
I have appointed a new three-person Executive Committee to run TLH. This group will be led by Todd Zipper, who will become our new Chief Operating Officer. Joining Todd will be Jim Lintner, our new CFO, and John Anderson, our new of SVP of Account Management and Sales. I have enormous confidence in these three individuals, and know that, with the able support of our senior management team, they will lead TLH to new levels of student service and drive the business results that duly follow for our company. Expect to hear from them shortly about their plans for each functional area of the company. It is an exciting time to be part of TLH as it begins to move aggressively into deeper partnerships with our client schools. Please join me in wishing David, Todd, Jim and John the best of luck in their new roles.
• When we look back a few years from now, this past week may be viewed as the beginning of the end for newspapers. The New York Times Company sold the Boston Globe for a 95-percent loss, getting $70 million after they paid $1.1 billion. As of yesterday, McLean, Va.-based Gannett Company Inc., which owns the Courier-Journal, had cut at least 237 positions across its U.S. holdings including 12 in Louisville. The CJ once was one of Louisville’s largest employers, with 575 people back in 2009. Now, it’s difficult to know how many work there. Though we know this: The CJ is an editing hub for 25 Gannett papers, with 80 new editors and graphic designers on the seventh floor since 2011. Multiple sources tell us LEO Weekly may be seeing changes, changes that required Chris Ferrell, CEO at LEO’s Nashville-based parent SouthComm, calling the editor back from maternity leave. From Ferrell ….
Here are the facts about my visit to Louisville on the record:
I was in town for a sales training for my Louisville and Cincinnati sales reps. We are doing the same training in Nashville next week for my reps from Nashville and some other papers. There is nothing unusual about this. I visit all my papers fairly regularly.
While I was in town I had lunch with Sarah (Kelley), my editor at Leo, who is on maternity leave at the moment. The way you characterized that conversation is not accurate at all.
Every media outlet in town is adjusting to the changes including television. We got this from a source:
Just got out of a sales presentation with WDRB-TV. They are HIRING THREE full-time journalists just to produce content for the web. My contact didn’t know who they are, but said it’s being pitched around town in a sales package, which I have a copy of. Sounds like a Bozich/Crawford redo.…and I’d bet at least one of them is from the C-J. WDRB touting some pretty big numbers from their web presence and the effects of Bozich/Crawford.
• Louisville is getting a second national high-end microbrewery restaurant. Granite City coming to Louisville. Minneapolis-based Granite City Food & Brewery restaurant plans to open a new restaurant on Hurstbourne Lane about this time next year. Here’s what IL’s Steve Coomes has to say about the new arrival, the second since Gordon Biersch opened at Fourth Street Live:
With 28 units, Granite City is known for its extensive and wide-ranging menu featuring wood-fired pizzas, flatbreads, seafood, sandwiches, burgers, salads … you get the drift … about 90 freakin’ items, according to a news release from the company. The facility will be built from the ground up using a bit more than 2 acres of land—which we know goes for oh, so cheaply—along South Hurstbourne Parkway, just south of Shelbyville Road, meaning headed toward the heart of Chain Land near Chili’s and Romano’s Macaroni Grill. Technically, the development is known as The Vinnings. (According to Business First, John Schnatter—yeah, Papa John—owns The Vinnings.) Once opened, it’ll be the chain’s 31st unit.
This addition to the market means Louisville gets another craft brewery, its seventh overall. GCFB does five basic brews covering five styles and rolls out seasonals. Click the link to see what they have. If you can’t wait to see what this new spot will be like, the nearest one is in Carmel, Ind., on the north side of Indianapolis.
• Bob Saunders is getting ready to announce six or seven companies selected for XLerate Health, the new Nucleus heath-care focused accelerator. XLerate Health announces its first class August 12, which will be at Velocity Indiana since the Nucleus building at Market and Floyd street is not quite finished. The inaugural XLerate 10-week class will be a 50/50 split between local startups and non-local. Companies coming for the accelerator are from New York, Chicago and California. Wow!
• The State Journal in Frankfort scooped the CJ and the Herald-Leader last week. The Journal was the first to report Gov. Steve Beshear’s son, Andy Beshear, is representing the giant Houston-based company that’s seeking to build a controversial natural gas pipeline across Kentucky. Beshear, like his father, is an attorney at Stites & Harbison, one of Kentucky’s largest firms. Stites & Harbison has represented Boardwalk Pipeline Partners since the late Kennedy Helm brought them to the firm in 1995. But here’s where it gets tricky. Typically, attorneys recuse themselves from work that presents even a whiff of a conflict of interest, though there is no regulatory piece for the state on the pipeline. Another interesting wrinkle is that we hear from multiple sources Andy Beshear will run to replace Jack Conway as Kentucky Attorney General when Conway announces for governor.
• PBI Bank’s new top execs find themselves in a damned if they do, damned if they don’t position. As the economy bounces back, they’re still stuck with bad real estate loans from The Recession. So now they sit on the sidelines. In their most recent earnings/lack of earnings report, parent Porter Bankcorp reported yet another terrible, horrible, no good, very bad quarter with a $1.7 million 2Q loss compared with ($319,000) for the same period last year. The loss was due to decreased net interest income driven by the reduction of the size of the bank’s loan portfolio … a $52.3 million reduction.
From their earnings report:
Average assets were $1.1 billion in the second quarter of 2013 compared to $1.4 billion in the second quarter of 2012. This was accomplished primarily by reducing our commercial real estate and construction and development loans within our loan portfolio and through the redemption of higher cost certificates of deposit accounts. The reduction of our balance sheet was the primary driver for net interest income declining by $2.4 million to $8.4 million in the second quarter of 2013 compared to $10.8 million in the second quarter of 2012.
So, in a nutshell, PBI executives have decided to save the bank by stopping lending. Shares reached $2.68 just after former CEO Maria Bouvette retired. Then, after the loss, they fell back 36 percent to $1.70 at Friday’s close. Porter Bancorp trades on the NASDAQ exchange under the symbol, “PBIB.”
• Look for hospitals, especially at public universities, to be under more pressure to release mortality rates after Elizabeth Cohen’s stunning investigation Saturday into Kentucky Children’s Hospital, part of the University of Kentucky. CNN’s Cohen exposes a hospital where the record of the chief heart surgeon is so bad, hospital executives were forced to put him on leave and stop doing open-heart procedures. But the secretive executives refused to release details of how bad things were.
From Cohen’s post, “Babies die: hospital halts heart surgeries”:
These children are medically very fragile, and even the best surgeons lose patients. Surgeons track their deaths and complications and take great pride in the number of babies they save. Some are so proud they publish their success rates right on their hospital websites.
Kentucky Children’s Hospital is not one of these hospitals.
Instead, Kentucky Children’s Hospital has gone to great lengths to keep their pediatric heart surgery mortality rates a secret, citing patient privacy. Reporters and the Kentucky attorney general have asked for the mortality data, and the hospital has declined to give it to them. In April, the hospital went to court to keep the mortality rate private. Parents of babies treated at Kentucky Children’s say the hospital’s effort to keep the data a secret, coupled with troubling events over an eight-week period last year, makes them suspicious something at the hospital has gone terribly wrong.
• Work has begun on The Woods of Lexington Road, Steve Poe’s latest rental development. Workers on site told us the complex will include 72 units in a 3-story building on a heavily wooded lot. The complex will be buffered from the road. After a tough recession, Poe is on a roll, with this project and the wildly successful RiverPark Place.
• A lot of buzz at the moment about Lynn’s Paradise Cafe. Our sources say the asking price, which started at $6 million, is now much less. But has Lynn Winter missed the window of opportunity for a sale? Our Wise Men and Wise Women say the best course may be for her to reopen.