WATERFRONT: Burbank-based Walt Disney Co. will move its Disney Wonder cruise ship to Los Angeles from Florida in 2011 as part of the company's fleet expansion. The ship will operate from the Port of Los Angeles, and the Burbank company is working with the port on a two-year agreement with an option for three more years.
INTERNET DEAL: Walt Disney Co. and Google Inc.'s YouTube have reached a pact to offer sports highlights, show clips and other short-form content from ABC, ESPN and other TV channels on the popular video-sharing site. Disney Media Networks will have the option to sell its own advertising inventory within those channels.
TAKEOVER: RCJP Acquisition Inc. has acquired Johnson Products Co. from Procter & Gamble. The purchase was funded by Rustic Canyon/Fontis Partners LP of Pasadena and St. Cloud Capital LLC of Westwood. Johnson Products, a Woodland Hills company, was founded in 1953 in Chicago and makes the Gentle Treatment and Ultra Sheen hair-care product lines aimed at African-Americans. Eric Brown was named chief executive and Renee Cottrell-Brown executive vice president. The husband and wife are former executives of an Alberto Culver Co. subsidiary that also makes African-American personal care products.
PLEA MADE: Former KB Home Chief Executive Bruce Karatz pleaded not guilty in federal court in Los Angeles to charges that he backdated stock options and concealed it from regulators and investors. When KB Home launched an internal investigation into the options in May 2006, Karatz allegedly lied; that resulted in erroneous filings the company made to the Securities and Exchange Commission, for which the company later was sanctioned. Karatz later agreed to pay $7.2 million to settle the SEC investigation. U.S. District Court Magistrate Judge Jeffrey W. Johnson has scheduled a trial date for May 19.
LABOR PACT: The Screen Actors Guild and the American Federation of Television & Radio Artists reached a tentative three-year deal with the ad industry on a commercials contract, just a few hours after the expiration of the old contract last week. SAG and AFTRA said the first year of the deal includes more than $36 million in wage rates and other payments, $21 million in increased pension and health fund contributions, and establishment of a payment structure for content that eventually ends up on the Internet and other new-media platforms. Approval is pending.
COURT LOSS: Countrywide Financial Corp. lost a bid to settle a shareholder lawsuit over its $2.5 billion takeover by Bank of America Corp. A judge ruled the agreement, which gave shareholders more information about Charlotte, N.C.-based Bank of America's July purchase of Countrywide, also would improperly wipe out some investor claims. SRM Global Fund LP contends it held on to its Countrywide stock based on statements by Bank of America's chief executive and lost $80 million. Delaware Chancery Court Judge John Noble suggested the deal be tweaked to allow investors to opt out of the settlement.
FILM DATA: Reversing a long-standing practice, the Hollywood studios' trade and lobbying arm no longer will disclose the average costs of making and marketing movies. Dan Glickman, chief executive of the Motion Picture Association of America, announced at a trade show that the increasingly complex nature of film financing and distribution made it difficult to obtain reliable data. The annual statistical analysis showing average movie costs of MPAA members has been provided for years, and is seen by industry professionals and Wall Street as a valuable tool to measure cost trends.
WINDING DOWN: North American Scientific Inc., which filed for Chapter 11 protection last month, has agreed to sell its last remaining product line, a breast cancer treatment called ClearPath. Portola Medical Inc., an affiliate of majority shareholder Three Arch Partners, will take over the targeted cancer treatment. Portola Medical has agreed to acquire the rights to ClearPath. If the sale to the Northern California company is approved by the bankruptcy court, it will result in the liquidation of the Calabasas medical device company and the loss of about 70 local jobs.
SHAREHOLDER SUIT: A retired California judge, John Bible, is seeking to recover millions of dollars in executive bonuses on behalf of himself and other shareholders of beleaguered insurer American International Group Inc. The lawsuit filed in Los Angeles Superior Court claims that the company had no legal justification for paying $165 million in bonuses and other perks after the insurance giant received more than $180 billion in government aid. Among the defendants named are Chief Executive Edward Liddy and Stephen Bollenbach, a director and former Hilton Hotels chief executive.
DOWNGRADE: A.M. Best Co. downgraded its outlook for Employers Direct Insurance Co. to "negative" from "stable," reflecting rising medical claims costs that have forced the Thousand Oaks workers' comp insurer to raise its reserves. In altering the outlook, the insurance industry rating agency also cited "ongoing challenges associated with the competitive market conditions" in the California workers' compensation marketplace. A.M Best, however, did affirm the "A" (excellent) financial strength rating and "A-minus" issuer credit rating of Employers Direct.
EARNINGS: KB Home reported a first quarter net loss of $58.1 million, down 78 percent from a year ago. Revenue dropped 61 percent to $307 million. Physicians Formula Holdings Inc. reported a fourth quarter loss of $24.5 million, largely due to impairment charges, compared with net income of $4.87 million a year ago. Net sales fell 17 percent to $28.2 million.
An article in the March 30 edition headlined "2008 Brought Brutal Cuts to Ad Firms, PR Agencies" incorrectly identified the president of PR for PR in Studio City. His name is George Shea.
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