The Boston Globe from Boston, Massachusetts • 47

Also Inside Professional help 55 Business opportunities 57 Deaths 60 Classified 62-74' ,4 DOW iiiimm iiin. 1 THE BOSTON GLOBE WEDNESDAY, NOVEMBER 3, 1993 liMmMMi fciii Plans set for another network Time Warner venture to include Channel 56 LAW By Susan Biekelhaupt GLOBE STAFF When venture capital meets high-tech, attorney Testa often writes the deal V' m.t'J I I I By Maria Shao GLOBE STAFF As a launching pad, it wasn't shabby. In 1966, just four years out of Harvard Law School, 27-year-old Richard J. Testa made partner at Gaston Snow. In the rarefied atmosphere of the old-line Boston law firm, he was advising Ken Olsen, founder of the fast-rising Digital Equipment and General Georges Doriot, whose venture capital firm had bankrolled Digital.

Testa represented Digital when it went public in 1966. Then, in 1972, he was the legal architect of a complex transaction that launched Digital on a path independent of Dor-iot's firm making Testa a player in one of the first wild Time Warner Inc. announced yesterday that it will have its own network, WB Network, which will include WLVI-TV (Ch. 56) and start broadcasting next fall. Coming on the heels of Paramount Comunica-tions anouncement last week that it will unveil a fifth network, the WB Network would include 12 TV station groups led by Tribune Co.

and represent 40 percent coverage of the country, Time Warner said in a statement. Jamie Kellner, who helped create the Fox network seven years ago, is leading the creation of the network and will be its chief executive. "There is only room for one more network," Kellner said at a news conference in Burbank, Calif. "There is no way there is room for two." Tribune said its television stations in New York, Los Angeles, Philadelphia, Atlanta, Denver and New Orleans will become affiliates, but has not decided whether its Chicago-based cable su-perstation WGN will participate. Besides the Tribune stations, Gaylord Broadcasting, Pacific FM, Gannett Broadcasting Group, Renaissance Communications, Koplar Communications, Meredith Broacasting, Press Television Act III Broadcasting, Pappas Telecasting Cos.

and Lambert Television were joining the network, Warner said. WLVI-TV is a Gannett-owned station, so would be part of that group. A spokesman for WLVI said general manager Peter Temple declined to comment, since the staff employees will just be told of the plan this morning. "We wanted them to hear it from us before they read anything in the paper," said news director Ron Becker. And while Tribune has said it will fold all of the Gannett stations into the network, it has been speculated among industry insiders Tribune plans on buying Channel 56.

The station, which no longer carries any Boston sports teams, is mostly known for its nightly movies and the 10 o'clock news. But movies, as NETWORK, Page 54 BUSINESS ly successful examples of venture capital investing. A year later, in 1973, Testa and two colleagues left Gaston Snow to set up their own law firm, with Digital and Doriot following as clients. Testa, 54, has been capitalizing on the rise of the hightech economy ever since. Today, as senior partner of Testa, Hurwitz Thibeault, he directs a 133-member firm that many consider the premier East Coast law firm specializing in representing venture capitalists and high-tech entrepreneurs.

And Testa has prospered by delivering more than lawyering skills. "We are very commercially oriented. We provide business judgment with our experience," says Testa. A cool, low-key lawyer who chooses his words precisely and sparsely, Testa today counsels a new generation of Digitals and Doriots. Along with Digital Equipment Corp.

and Teradyne his firm's client list includes emerging businesses such as Copley Pharmaceutical MathSoft X'-' V' v- i GLOBE STAFF PHOTO DAVID RYAN EMERGING BUSINESS, Page 50 Testa: "We provide business judgment with our experience." Pro-NAFTA gathering stumps at White House Falling rates give rise to home sales By Michael Putzel GLOBE STAFFS' Kmart will sell some PACEs to Wal-Mart IP' ji plp" I a WASHINGTON President Clinton assembled an East Room full of famous names for NAFTA yesterday as the battle over the North American Free Trade Agreement moved toward a vote in Congress two weeks from today. Democrats ranging from former President Jimmy Carter to Nobel Prize-winning economist Paul Sa-muelson, and Republicans including former Secre-. taries of State Henry Kissinger1 and James A. Baker 3d, turned out for the star-studded event aimed at raising the profile of the trade issue as pressure on Congress builds from both sides. "We are facing a real decision," Clinton told, the assemblage, "about whether the psychological pressures of the moment will overcome what we know in our hearts and our minds is the right thing to do." The NAFTA vote, he said, represents one of those moments in history when people can do "the honorable thing that may not be popular at the moment but that actually holds the promise of alleviating the pressures." In a rare display of bipartisanship and unity in the foreign-policy and economic establishment, the audi- NAFTA, Page 54 By Glenn Somerville REUTERS WASHINGTON Home sales soared by more than 20 percent in September, the Commerce Department yesterday, reporting a burst of buying widely attributed to the lowest mortgage rates in decades.

A separate key economic gauge also rose for the month, its second straight gain, the government said. In the fastest clip in seven years, home sales shot up 20.8 percent to a seasonally adjusted annual rate of 762,000 units, the Commerce Department said. The government's Index of Leading Indicators which is supposed to ECONOMY, Page 51 Former President Jimmy Carter pushes NAFTA as Henry Kissinger (left), James A. Baker 3d, and President Clinton chat at the White House yesterday. Economic indicators Index tracks economic statistics; seasonally adjusted 2.0 By Frederic M.

Biddle GLOBE STAFF Kmart Corp. yesterday said it will sell most of its PACE Membership Warehouse Inc. stores to Wal-Mart Stores Inc. That makes Kmart, the nation's second-largest retailer, the latest victim of the nationwide shakeout of the $34 billion-a-year warehouse club industry, where too many competitors tried to make money by selling Kmart and Wal-Mart's goods at even lower prices and no frills to members for an annual $25 fee. Moreover, Kmart's $300 million cash sale of PACE also pushes ahead Wal-Mart's aggressive but embattled New England expansion plans.

Six of the 91 PACE warehouses and unfinished sites being sold to Wal-Mart are in New England including three in Massachusetts. All will be converted to Wal-Mart's Sam's Club warehouses, and Sam's will open its first Rhode Island store in Warwick as a result of the sale, to be completed next January, subject to federal antitrust review. Both companies refused to further specify other stores to be sold, but Kmart now operates PACE warehouses in Natick, Seekonk and Worcester, and has a yet-unopened store in Dorchester. As a result of the sale, Sam's, which now operates nine stores throughout New England and had KMART. PatrpjlO Kendall chief denies he knew of looming loss 1.0 0 By Josh Hyatt GLOBE STAFF artifically inflated by Burkhardt's statements.

"He either knew or should have known that what he was saying was inaccurate or misleading," charged Norman Berman, an attorney representing some shareholders. Besides Burkhardt several other executives also sold, shares. But Burkhardt said his transaction was an accident of timing. "I was not acting on anything," he said. He also was at a loss to explain why George McClelland, the com his endorsement of the earnings projection.

He added that "predicting the future is difficult. I will now be hesitant to do so." Last Thursday Kendall Square said that it would post an unexpected loss on revenue "substantially below" forecasts for the quarter ended Sept 25. The statement triggered a 32 percent drop in its stock price Friday and resulted in a number of shareholder lawsuits against the company. Sources close to the company said that it had switched auditors, and that its new accountants raised questio about how it reenenized the component of recent sales tied to customer trade-ups to new models. Analysts had expected the company to earn at least 9 cents a share on sales of at least $15 million.

Jeffry Canin, an analyst at Salomon Brothers in San Francisco, said he had changed his projection from earnings of 13 cents a share on revenue of $17 million to a loss of 8 cents a share on revenues of $14 million. "There's a bit of a credibility problem between the company and the investment community," he said. In recent days at least eight shareholders have filed suit claiming that they bought shares at a price SONDJFMAMJJAS Motrthiy percent dawg September The president and chief executive of Kendall Square Research Corp. yesterday denied that he knew the company was headed for a quarterly loss when he sold $1 million in company stock. Henry Burkhardt 3d sold the, shares a few weeks after confirming rosy Wall Street forecasts in August for the Waltham supercomputer company's third quarter earnings.

"1 wouldn't say I regret it It was based upon all the information I had availableSfo me," Burkhardt said of Coincident index 0.2 0.2" Lagging index Consumer confidence 0.04 SOURCE: Bureau of LabOf Statistics pany's senior vice president, chief KNIGHT-RIODER V4 KENDALL. Paw 4S.