Star Tribune from Minneapolis, Minnesota • Page 35

3D Todays business briefing Regional novvs National novvs Star TribuneWednesdayNovember 171993 Faegre Benson plans dispute division Faegre Benson, the second-larg- of alternative dispute resolution St. Paul Area Chamber gives Rogers the nod should reduce courtroom appear Hospital supply company to eliminate 4,500 jobs i Baxter international cites lower demand for many of its products and services interim president selected over 80 others five month search people might be calling on a sizable est law firm in the Twin Cities, announced the creation of a new division Tuesday to settle business disputes using methods that avoid costly courtroom litigation. The division will practice an increasingly popular type of law known as alternative dispute resolution. It will be directed by Jerry Conover of Faegre's Denver office. The use of this system, which incorporates such techniques as mediation and arbitration, is part of a growing trend in the legal community.

The Minnesota Supreme Court is conducting a hearing today on the topic, and Chief Justice A.M. (Sandy) Keith is a strong advocate of the approach. "There is dissatisfaction with the civil litigation process," said John French, managing partner of Faegre Benson. "More and more often clients, even ones who get a good result are very dissatisfied because the process is too expensive, too time-consuming, too burdensome on executives' time and too unpredictable." The process has been offered by smaller law firms with varying degrees of success over the past several years. But Faegre Benson is one of the largest firms in the country to offer the service as a specialty.

The firm's success will depend on its ability to attract a strong core of clients. Law firms thrive on income from "billable hours" and nothing generates those fees like lengthy litigation and courtroom trials. The use customer, said Vernon Loucks, chairman and chief executive of the company, based in Deerfield, III. "Hospitals don't have time for this and we can't afford it" i Baxter said the changes would result in a pretax charge of $700 million against earnings in the current quar-1 ter. It said the resulting pretax sav-1' ings would total $100 million next year, and rise to $350 million annu- ally by 1998.

Demand for Baxter's products has declined as the number of certain kinds of surgeries and the length of hospital stays have fallen in re- sponse to pressure from insurance -companies to lower medical costs. These developments have made it difficult for Baxter to reap the double-digit growth in profits it had in 1 the 1980s. Net income for the first nine months was $405 million, on sales of $6.48 billion, but stripped of ac- counting changes, profits have been, falling. New York Times Chicago, 111. Baxter International the world's largest hospital supply company, said Tuesday that it would shave 7 percent, or 4,500 jobs, from its work force over the next five years.

The action comes in response to changes in medical practices that have slowed domestic demand for many of its products and services. The revamping will include the elimination of 25 percent of the company's administrative and corporate management positions and the sale of its diagnostics products manufacturing operations, as well as several smaller businesses the company has not identified. The company also will reorganize the sales efforts of more than 20 divisions into regional groups where a single Baxter executive will be the main contact for most customers. "On the average, 30 different Baxter Justice Department Washington, D.C. The Justice Department on Tuesday challenged General Motors Corporation's plans to sell an automatic transmission division to a competitor, saying the deal could lead to higher prices and poorer service.

The department filed an antitrust suit that also claimed the sale would reduce technological innovation and bring higher costs for people who use public transportation. sues to block GM sale GM has proposed selling its Allison -Transmission Division, based in In dianapolis, to ZF Fnednchshafen AG, a German company with U.S. operations headquartered in Chica- go. Allison and ZF compete with. each other in the manufacture of medium and heavy automatic trans Minstar posts $20.7 million net loss rwho applied during Bv Dee DePass StaffWriter i A five-month national search and '80 applicants later, the St Paul 'Area Chamber of Commerce has chosen a president and chief executive: Timothy Rogers, its interim president since July.

"Rogers, who has acted as president since Richard Hadley left the post in July to become chamber presi- dent in Spokane, was elected last week by the board of directors and will take over immediately, it was announced Tuesday. was very surprised," he said. i didn't find out until about 5:30 last night This was one of the best-kept secrets in St Paul. It's still sinking 'in." "But members of the six-member "search committee said it soon became apparent that Rogers was the choice. Edwin Theisen, president of Northern States Power Co.

and chairman of the chamber's search committee, said, "Even after reviewing more than 80 candidates from across the nation, Tim's track record of solid work with a variety of community groups was unmatched." Rogers, 36, has been chamber vice president since January 1992 and "executive director of the Metro East Development Partnership 1988. His Metro East involve-'ment is part of what made him an ''attractive candidate, said Carl Kuhrmeyer, chairman of the board and 3M's recently retired '-'vice president for administration. Best Buy takes hit on ''Wall Street hammered the stock of Best Buy Co. again Tuesday on more reports of a savage price war 'shaping up with competitor Circuit Stores Inc. J-Best Buy stock fell $4 yesterday to $45.50 in heavy trading.

Best Buy "'shares have fallen about 25 percent since late last week when David Childe, an analyst for Johnson Rice first suggested that price competition would squeeze the electronics retailer's margins. Bloomington-based Best Buy attributed yesterday's drop to a report that Childe issued in which he gave a worst-case scenario Of a Drice war between Best Buv and JXUlllllUllU, Hi WUJWw VIIVWII VIV. Childe said yesterday that Best Buy would take a 63 cents a share "hit" aeainst earnings. He said the last a time the two retailers locked in a price war, in November and December 1991, Best Buy's stock fell Business columnist and TV analyst Dorfman yesterday picked up 'on Childe's report and fed the selling frenzy with a report on the News and Business Channel. missions for trucks and buses.

i combined Allison-ZF company would face only one remaining competitor and would dominate about 78 percent of the U.S. market for transit bus transmissions. ances and shorten litigation, thus cutting attorneys' fees. But Faegre believes the possible loss of litigation income will be offset by a growing list of clients who hire the firm for its expertise on preventing and shepherding legal problems expeditiously. "There could be a loss of billable hours, but in the long run the legal profession will become obsolete unless it offers new services and new pricing methods," Conover said.

"If we don't change, clients will solve their problems without lawyers and more legal work will be done in-house." Courts favor the alternative approach because it can cut caseloads and allow speedier resolution of litigation that remains in the court system. A task force appointed by the Minnesota Supreme Court and the State Bar Association has recommended the creation of a statewide program for alternative dispute resolution of civil cases. Conover said the Faegre program also will work with clients to prevent disputes from occurring through a variety of channels. One, called the ombuds program, is designed to resolve employee complaints. A legal audit system is designed to uncover legal risks.

"The provision of legal services is increasingly competitive, and we need to respond to that competition," Conover said. David Phelps Jacobs said Minstar is negotiating with several potential investors for a planned financial restructuring. The restructuring would involve a substantial equity investment from new investors coupled with a potential business combination between its Genmar Industries Inc. subsidiary and Miramar Marine a boat manufacturing company beneficially owned by Jacobs and certain of his business associates. Minstar said that no definitive agreements had been reached and no assurance could be given regarding the timing or satisfactory conclusion of the restructuring.

Jim Foster national Inc. said it has completed its public offering of 4 million common shares at per share. The company raised net proceeds of about $49 million in an underwriting led by managing underwriter Gerard Klauer Mattison Co. Inc. ValueVision also said its stock has been accepted on the NASDAQ National Market System.

Community First Bankshares Fargo, N.D., said it has signed a purchase agreement to acquire Ada Banc Shares the holding company for the Ada National Bank in Ada, Minn. Terms were not disclosed. -s. Get Local, Regional or -i Real Nationwide Service auwith one pager! Only $25.95 Mr me Annual bS, DMhrktquMM MudMBIOcaMMo. 858-9090 iTJOPftlfMW VENTILATE.

As head of Metro East Roger's "objective is to bring businesses to the St. Paul area and to encourage existing businesses to expand their operations herel," he said. The chamber shares those goals. Kuhrmeyer credited Rogers with helping North Star Steel a division of Cargill decide to stay in Minnesota and to expand its St. Paul plant.

Rogers also has helped bring together different political bodies to ensure that St Paul's Civic Center gets renovation funds, he said. A half-cent sales tax was passed last summer and construction is to begin next spring. Using a recently completed membership survey and a board member retreat in December, Rogers wants to get a consensus before deciding what issues the chamber should address first. Representatives from the Riverfront Development Commission, St Paul Civic Center Authority, the St. Paul Convention Visitors Bureau and the mayor-elect are expected to participate in the retreat "I think that it's real critical, if you are going to move a community forward, that you have a say from the stakeholders and that you listen to them," Rogers said.

Before moving to St Paul in 1988, Rogers was manager of economic development and planning for Kalamazoo, Mich. He holds a bachelor's degree in political science from Bradley University in Peoria, 111. price war scenario A widespread price war hasn broken out" said Best Buy Chief Financial Officer Allen Lenzmeier. "A lot of this is speculation and nothing has happened except in certain markets." Best Buy Chairman Richard Schulze said there are localized price wars in markets in which there is new competition between the two. Schulze said he expected Circuit City to advertise special orices in Atlanta and Phoenix.

Best Buy recently entered those markets. Childe said the companies will probably engage in price wars in Phoenix, Chicago and Atlanta where Circuit City has already lowered RCA 20-inch color televisions to $180 from $200. "They've done that before," said Lenzmeier, dismissing the full-scale price war story. Childe's report also warned investors to "stay on the sidelines until at least mid-December and then consider re-entering the stock." Sally Apgar ontion to buy additional shares and assets. Stratosphere headed by Bob Stupak, is privately held, but is expected to sell shares to the public soon, said Michael Rosenbaum, a spokesman for Grand Casinos.

In an unrelated announcement, Grand Casinos said it is delaying the grand opening of its casino in Biloxi, until Jan. 17. It had been scheduled to open Dec. 27, with a New Year's Eve party Dec. 31.

The company said completion has been delayed by the decision to construct a foundation for a 500-room hotel, and delays in regulatory approvals by the state. Josephine Marcotty novvs COCOM and will terminate the COCOM arrangements as soon as possible, but no later than March 31, 1994," said Frans Engering, head of foreign economic relations at the Dutch eav nomic affairs ministry and chairman of the meeting. Engering said negotiations with Russia about joining the new organization would start soon. Other countries, including Finland, Switzerland, Austria, Ireland and New Zealand, would be asked to join. "It is still worthwhile to have arrangements on military technology and dual-purpose goods," he said.

Minstar Minneapolis, reported a net loss of $20.7 million and revenues of $69.9 million for the third quarter ended Sept. 30. It lost $35.7 million and had revenues of $212.4 million for the first nine months of 1993. The boat manufacturing company, owned by Minneapolis financier Irwin Jacobs, reported net losses of $9 million in the 1992 third quarter and $27 million for the 1992 nine-months. Minstar said third-quarter results include a $10.9 million restructuring charge related to, among other things, plant closings, severance costs, write-offs from discontinued products and future consolidation and restructuring.

jfjgf Network Systems Brooklyn Park, said the merger of its wholly owned subsidiary, NSC Acquisition into Bytex Corp. has been completed. As a result of the merger, Bytex, a Westborough, manufacturer of data communications products, has become a wholly owned subsidiary of Network Systems Corp. Education Alternatives Bloomington, said it has signed a five-year contract to manage a 10th school in Baltimore, where the company has been managing nine public schools for more than a year. Edina-based ValueVision Inter- i High-End Furs at Low-End Prices! Choose from over 900 Furs, Many Priced from I f----m jiJ- r-i' Grand Casinos makes Vegas deal 3 In, mill a.mira 11 orontc fJronH Pacinnc the nn -CSranH Cacinos Inc.

will acauire 33 orants Grand Casinos the CIRCULATE. CASH REBATE. 8 percent of the Stratosphere Tower and the adjacent Vegas World Hc- tel-Casino in Las Vegas for $21 'million. ti "'The Stratosphere is a structure similar to the Space Nee-. die in Seattle.

It is connected to a and entertainment complex now under construction. When ''completed, the Stratosphere will be 'the tallest free-standing observation tower in the United States. Grand Casinos expects the transaction to be completed in 90 days if the necessary regulatory approvals are obtained. The deal would be the Plymouth-based company's first f'casino investment in Las Vegas. The agreement between and the Stratosphere Corp.

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