Stories in this week’s Orange County Business Journal
TOP STORIES
Broadcom Corp. cofounders Henry Nicholas and Henry Samueli agreed to pay the company more than $50 million as part of the chipmaker’s settlement of a shareholder lawsuit on stock options backdating, according to a report. The Daily Journal, a Los Angeles-based legal newspaper, reported that Samueli and Nicholas are set to turn over $26 million each in vested stock options in the settlement. Nicholas was Irvine-based Broadcom’s formative chief executive and left the company in 2003. Samueli is Broadcom’s chief technical officer. Broadcom agreed to pay some $160 million to settle the class action suit. The suit was brought on behalf of investors who bought or acquired Broadcom’s shares from July 21, 2005, to July 13, 2006. Former Broadcom finance chief Bill Ruehle and Samueli were named as defendants along with the company. Ruehle, who left in 2006, earlier turned over $26 million in vested options, according to the Daily Journal. The payout by Samueli and Nicholas would presumably offset some Broadcom’s legal fees, pegged at more than $100 by the Daily Journal. A spokesman for Broadcom couldn’t immediately be reached for comment.
Costa Mesa sent furlough notices to more than 200 of its 472 full-time employees as part of an effort to cut costs and pension obligations. Pension payments are taking up 15% of the city’s budget and are expected to rise to 25% within five years. City officials are considering a shift of some work done by current employees to contractors. The moves are seen as significantly more aggressive than steps being considered by other cities facing similar challenges. Unions representing city workers decried the notices.
EDUCATION
Shares of Santa Ana-based Corinthian Colleges Inc. rose last week on word that fewer students defaulted on loans in the past two years. The company said it expects the average default rate for 2010 to be 9% to 12%, down from 22% a year earlier. Corinthian has about 105,000 students at more than 100 campuses in the U.S. and Canada offering degrees in information technology, construction, healthcare and other areas. The drop in defaults brings Corinthian in line with potentially crippling government rules that call for new standards on recruiting students and potential cutoffs of student loans to schools with high default rates.
SPORTS
The Sacramento Kings basketball team has filed for rights to several names should the team move to Anaheim’s Honda Center. A lawyer representing the Maloof family, owner of the Kings, has filed for trademarks for Anaheim Kings, Anaheim Royals and several others, according to several reports. The team could be looking at reviving the Royals name, which it had decades ago, to avoid confusion with hockey’s Los Angeles Kings. Anaheim Arena Management LLC, owned by Broadcom Corp. cofounder Henry Samueli, runs the city-owned arena. Samueli also owns the Anaheim Ducks hockey team, which plays at Honda Center. The city mandates that a basketball team at the arena include the city’s name as the first geographic reference. The Kings are expected to make decision on a move by mid-April.
AUTOS
Fletcher Jones Management Group Inc., whose Newport Beach Mercedes dealership is the largest in the county, is reviving postponed plans to open a dealership in Ontario. Plans call for the dealership to open next year near LA/Ontario Inter-national Airport, according to the San Bernardino Sun. The move reflects growing confidence in the Inland Empire, which was among the hardest hit regions during the downturn.
MEDIA
Rachel Sagan will leave her post as vice president and general counsel of Irvine-based Freedom Communications Inc., publisher of the Orange County Register, for a similar post at Playboy Enterprises Inc. in Chicago. She will join former Freedom Chief Executive Scott Flanders, who now runs Playboy. The move comes as Freedom considers a recent round of undisclosed bids for all or part of the company. Freedom plans to rely on outside counsel until Sagan is replaced.
TECHNOLOGY
Santa Ana-based CoreLogic Inc., a provider of data to real estate and mortgage companies, has bought the 62% stake in a San Mateo-based mortgage software company it doesn’t already own for $32 million. Dorado provides cloud computing software that automates the loan origination process. The company will operate under the CoreLogic Dorado name.
ECONOMIC INDICATOR
Mixed: The median price paid for an Orange County home fell to $410,000 in February, a 1.2% decrease from the prior month and a 2% dip from a year ago, according to San Diego-based MDA DataQuick. Median prices still are up about 12% from the bottom of the latest cycle, seen in early 2009.
