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Week in Review

TOP STORIES -- Oct. 12-17

October 19, 2003|From Times Staff

Both Sides Prepare for a Long Market Strike

Southern California grocers and striking employees dug in for the long haul, as stores said their makeshift operations were showing steady improvement and unions representing everyone from actors to janitors pledged to stock food banks and crank up a campaign to broaden public support.

Vons and Pavilions stores owned by Safeway Inc. were the first target of the strike by the United Food and Commercial Workers union. Kroger Co., which owns Ralphs, and Albertsons Inc. locked out their employees in a show of solidarity.

Both sides view the weekend as crucial. Shoppers may find their sympathy being tested as supplies in cupboards and refrigerators dwindle. And pickets may find their enthusiasm waning as the strike drags on.

Union leaders representing actors, longshore workers, janitors, teachers, hotel housekeepers and others pledged to bolster the strikers' resolve with a series of rallies and help on picket lines.

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O.C. Register Owner Agrees to Sell Stake

Resolving a three-decade family war over power and money, Freedom Communications Inc. agreed to allow outside investors to buy into the company that publishes the Orange County Register, providing funds that would enable disgruntled members of the clan to sell all or part of their shares.

The deal values Freedom at $1.72 billion. Family members said it represented a middle ground between a sale and keeping the Irvine firm a family affair.

If the family shareholders approve the transaction, the boardroom would be shared with representatives of Blackstone Group and Providence Equity Partners, which are putting up cash to buy out dissident shareholders.

Media companies that had made offers to buy Freedom included Gannett Co., the nation's largest newspaper owner, and MediaNews Group, owner of the Los Angeles Daily News and Long Beach Press-Telegram.

By giving family members a chance to cash out, the agreement "gives all shareholders the choices they have been seeking," said Timothy C. Hoiles, who owns 8.6% of Freedom. "This is a great outcome."

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Justice Department Issues Subpoena to Tenet

The Justice Department has issued a second subpoena to Tenet Healthcare Corp., as part of the government's investigation into some of Tenet's billing practices in the Medicare program, the hospital firm said.

The subpoena, issued by the U.S. attorney in Los Angeles, seeks medical and billing records dating back to 1998 from two Tenet-owned hospitals, Tarzana Regional Medical Center and USC University Hospital. It also seeks information about certain managers at those hospitals and data on the hospitals' charges during the last five years.

"We will continue to cooperate with the Department of Justice regarding this matter," said a spokesman for the Santa Barbara-based company.

The U.S. attorney's office in L.A. declined to comment.

The latest subpoena is related to the Justice Department's investigation into whether Tenet engaged in improper billing to inflate its reimbursements from the government for patients who required more expensive Medicare "outlier" payments.

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Sony Pictures Plans to Cut at Least 300 Jobs

Sony Pictures Entertainment plans to cut at least 300 jobs over the next 18 months, in keeping with a mandate from Tokyo-based parent Sony Corp. to slash overhead throughout the company, sources said.

The layoffs will follow the elimination of 1,000 jobs in the entertainment and electronics giant's struggling music group earlier this year.

The new cuts are expected to hit across the board at Sony Pictures' key business units, including its Culver City-based Columbia Pictures movie studio, domestic and international TV operations and Sony Pictures Digital. Sources estimate that the cuts could save the company as much as $75 million a year.

Sony has seen its shares fall almost 20% in Tokyo trading this year, even as the benchmark Nikkei-225 stock index, which includes Sony, is up almost 28%.

In July, Sony reported a 98% decline in profit for its fiscal first quarter, citing a slump in sales of television sets and a disappointing run of summer movies compared with the blockbuster success of last year's "Spider-Man."

Sony Pictures Entertainment employs about 6,000 worldwide.

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NYSE to Take Action Against 'Specialists'

The New York Stock Exchange, reeling from scandals over its governance and executive pay, plans to fine and punish five "specialist" firms over improper trading that may have cost investors millions of dollars.

The announcement was another blow to the image of the 211-year-old exchange.

The alleged violations by specialists -- brokers on the NYSE floor who are supposed to match buy and sell orders -- could make it more difficult for the exchange to fight off angry reformers who argue that the floor trading system is antiquated and open to abuse.

After a nine-month investigation covering 2000 through 2002, the Big Board found that the specialists in some instances stepped in front of customers to make quick profits with their own trades.

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