The Record from Hackensack, New Jersey • 27

THE RECORD'S ADVICE HOT LINE 525-4GOO EXT. 1500 mm (Q QUOTE THE RECORD FRIDAY, MAY 3, 1996 SECTION HFS ACQUIRES COLDWELL BANKER Harvey facing the music Bankruptcy plan would shift control ImrapBre of ttlhie agemiaes 60- s(k I TODAY'S CLOSING cc 46t 8 illfc 1 MAY2.1996 55 338 1 30 Q6S TK. 2o-J yrzrr- stock prices I 10 LmZmmmtlmmim I 1 I Julv Sent. Nnv 'PR Mar I Julv Sent. Nnv 'flfi Mar.

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Jun. RECENT ACQUISITIONS Coldwell Banker nam. MHinTfcAii i runurwatu Elec.Realty Associates PURCHASED FEBRUARY 1996 FRANCHISED OFFICES Century 21 Real Estate PURCHASED AUGUST 1995 FRANCHISED OFFICES MAY 1996 FRANCHISED OFFICES Strike three for Herman's Retailer confirms liquidation plans By ADAM GELLER Staff Writer Herman's Sporting Goods is taking itself out of the game. The Carteret-based retailer on Thursday confirmed widespread speculation, announcing plans to liquidate its chain of nearly 120 stores. Herman's, which filed for bankruptcy protection last week but had refused to comment on its future, faxed reporters the court papers confirming the liquidation plans.

"Due to adverse circumstances, including a depressed retail market, intense competition, and pressure from vendors," Herman's has no choice but to shut itself down, the retailer said in papers filed with U.S. Bankruptcy Court in Trenton. Liquidation could mean the end of one of the region's best-known specialty retailers. But it could also see an investor buy the Herman's name, perhaps along with some of its stores, and keep the 80-year-old merchant alive. A bankruptcy judge will review the company's plans on May 13, and going-out-of-business sales will begin "as soon after court approval as practicable," said Paul DeFilippo, a lawyer for Herman's.

Herman's is no stranger to Bankruptcy Court. The retailer filed for Chapter 11 protection in 1993, immediately after being purchased by an investor group led by two New York banking companies and a New Jersey management company. But the somber tone in the new set of court papers is far from the upbeat talk of a turnaround evident the last time around. Herman's has suffered setback See HERMAN'S Page B-5 must refund The Associated Press Regulators on Thursday ordered Orange and Rockland Utilities to give $8.5 million in customer refunds in the wake of a scandal involving senior company execu-tives. The New York State Public Service Commission also approved a plan to reduce annual electric rates by 2.3 percent Bloomberg Business News The Harvey Group which operates five Harvey Electronics retail stores in New York and New Jersey, has filed a bankruptcy reorganization plan that calls for giving control of the Secaucus-based company to an investor group.

The investors, described by the company as a diverse group, are to receive an 87 percent stake in exchange for canceling the $1.5 million in debtor-in-possession loans they made to the company during the bankruptcy proceeding. Harvey filed for bankruptcy protection in August after a rocky period that saw its chairman resign, its stock removed from trading, and its sales languish. The company's unsecured creditors, who are owed $4.8 million, will receive 10 percent of the reorganized company's stock. Holders of secured subordinated debt, owed $875,000, will get 3 percent of the common stock and $600,000 in redeemable convertible preferred stock. Joseph Calabrese, chief financial officer, said the company intends to have its new stock listed on an exchange eventually.

The company has said it has the necessary support for the plan. "Our restructured balance sheet will be virtually debt-free, with the exception of our operating line of credit and post-filing trade payables," Calabrese said. Calabrese said the company expects U.S. Bankruptcy Court in New York to approve the reorganization in July. Congress Financial another debtor-in-possession lender, will retain a senior secured position on all of the company's assets and continue to extend a $3 million line of credit.

Meanwhile Thursday, the company said that Franklin Karp, former vice president of merchandising, has been named president of the Secaucus-based company. The Harvey Group also said it will consider relocating its main store on West 45th Street in New York to larger quarters. 6,100 2,500 tsg: Lh I 2,200 BILL NEWTON STAFF ARTIST 'This is an exciting thing to Schlott says MARK L0WERY will be a good thing," said Dick Schlott, shopping," said Robert Ferguson, executive iff Writer who sold his 120 offices to Coldwell vice president of the New Jersey MARK L0WERY Writer By Staff Association of Realtors in Edison. Banker in 1991 and is now a consultant. The realty world just got smaller.

Hospitality Franchise Systems the Parsippany-based hotel franchiser that already had picked up Century 21 and Electronic Realty Associates in separate deals totaling nearly $250 million, outdid itself Thursday with word that it would pay $740 million to acquire Coldwell Banker Corp. In so doing, the country's biggest hotel franchiser embarked on a path to becoming the nation's largest franchiser of real estate brokerages as well. But industry experts Thursday were not sure what impact the acquisition of Coldwell Banker by HFS would have on independent real estate brokers or on consumers. The acquisition, which is expected to be completed this quarter, would give HFS more than 11,125 real estate brokerage offices throughout the country. "If they operate their real estate franchises like they operate their hotels, it It's unclear what impact the creation of this giant real estate partnership will have on independent brokers.

There are 70 ERA offices, 185 Century 21 offices, and 71 Coldwell Banker offices in New Jersey. "We don't know enough about it to know what impact it will have on independents," said Denise Smith, a spokeswoman for Weichert Realtors, which has 90 offices in New Jersey. Another independent broker, Joel Riotto of Riotto Associates of Teaneck said the acquisition will help small to midsize brokerages. "The larger the organization gets, the less personal the contact with the consumer," Riotto said. "This will make our lives easier." And what about consumers? Most industry experts don't believe there will be any adverse effect.

"If there's truly a competitive market See COLDWELL Page B-5 "The hotels operate independently and continue to be competitive. "HFS has done a lot of innovative things, and that can only better serve the consumer. "This is an exciting thing to see. It's the largest transaction in the history of the real estate business." Those "innovative things" include attaching the Century 21 name to several products, including real estate books, vinyl siding, and kitchen cabinetry. The company has also moved forward with the concept of "one-stop shopping," which is an attempt to create more business by offering services such as home security systems, vacation referrals, and new-car deals.1 HFS officials did not say whether they plan to use the Coldwell Banker name in a similar fashion.

The acquisition "sends the clear message that Century 21 and Coldwell Banker are serious about this one-stop In N.J., filling a void in treatment of the acutely ill company's health costs. Managing those patients better would cut costs for their insurers, he says. "You see the same names coming in for claims over and over again," says Elissa Rosch, the company's client-services manager. "These are the people we want to intensively manage." And Levy has persuaded a number of large corporations, including Toys Us and Ingersoll-Rand, to sign on and try his approach. Coming Life Sciences Inc.

of Teterboro, one of Levy's first clients, went one step further: It purchased the company in February 1995. By LAUREN C0LEMAN-L0CHNER Staff Writer The move into a long-vacant office building a move David Levy is celebrating today is perhaps the best metaphor for how he sees his company's role. Levy, who in 1987 founded what is now Corning Franklin Health, is moving most of its employees to an Upper Saddle River structure that has been empty for almost a decade. But Levy says his years as a family physician, health-care consultant, and health maintenance organization director revealed a larger void: the treatment of those who are chronically and critically ilL Undoubtedly, one attraction was the company's rapid growth: It more than doubled its full-time staff from 40 to 95 between 1994 and 1995. It expects to add 75 employees this year.

Revenues have similarly increased: from $5 million in 1994 to $10 million in 1995. Levy says he expects them to grow between 50 percent and 100 percent this year. Coming's current caseload is about 1,500 patients, but Levy expects it to almost double in the next year. Overall, the health-care industry is growing. According to the Bureau of Labor Statistics of the U.S.

Labor Department, 9.3 mil lion people worked in the health-services industry in 1995, up from 7.8 million in 1990. In New Jersey, there were 308,200 workers in the field in 1995, compared with 259,800 in 1990. Corning Franklin's main clients have been large, self-insured companies. But now Corning is signing on established HMOs and insurance companies, too, Levy says. The companies aren't necessarily looking to spend less, he says, but to spend wisely.

"What they really want is to understand the value that they're getting for their dollar." See CORNING Page B-5 The very ill, he says, lack information they need to make intelligent decisions about their own care, which often translates into rounds of visits to doctors and costly hospitalizations. "The variables are fewer in choosing where to get a heart transplant than in buying a new car," Levy says. Patients given proper information, he says, will make intelligent, cost-effective decisions about treatment. Levy says a small core of very sick people constitutes a huge share of a company's health-care spending. Corning Franklin uses the figure of 1 percent of the very ill accounting for 35 percent of a and then freeze them through April 1999.

The utility has about 370,000 electric and gas customers in Orange, Sullivan, and Rockland counties. Former company executives, including former state Sen. Linda Winikow, were sent to jail for their involvement in a scandal that involved embezzlement, lavish spending, and forced political contributions by vendors. had originally estimated that the scandal cost ratepayers $3.8 million. But PSC staff members thought a greater refund was See Page B-5 Record trio wins Loeb Award l.HIMIrfW flTRPR DOW 5,498.27 down 76.95 500 643.38 down 11.20 AMEX 588.97 down 4.81 Looking for answers: A commission will look into assets hidden in Swiss banks during the Holocaust.

See B-2 New approach: American Express asks banks to offer its cards. See B-3 McBLT: McDonalds heats up the competition with a new menu item. See B-3 per's series. That probe is ongoing. There were more than 280 entries in the nationwide contest, which judges quality of reporting, writing, analytical value, ingenuity, and exclusivity.

Other Loeb winners this year included The Wall Street Journal, for a series of stories about the Archer-Daniels-Midland Fortune magazine, for an article titled "Fatal and The New York Times, for coverage of the media industry. The judges included Shelby Coffey, editor of the Los Angeles Times; Soma Golden Behr, assistant managing editor of The New York Times; Frank Lalli, managing editor of Money magazine; Mark Morrison, managing editor of Business Week magazine; and Paul Steiger, managing editor of The Wall Street Journal garded safety, and paid little attention to the qualifications of its managers. For example, The Record reporters found that the company's chief chemist did not hold an advanced degree in chemistry, as Napp had claimed in documents, but only a bachelor's degree in general science. The chemist also had a checkered past in dealing with hazardous chemicals, the reporters found. Within days of the series appearing in The Record, the federal Occupational Safety and Health Administration released a report echoing the newspaper's findings.

OSHA announced that, as a result of the newspaper series, it would open an investigation into possible criminal wrongdoing. The U.S. Attorney's Office also opened a criminal investigation of the blast as a result of the newspa By The Record's staff The Record's coverage of the fatal explosion last year at Napp Technologies in Lodi has been awarded the 1996 Gerald Loeb Award for Distinguished Business and Financial Journalism. The award, sponsored by the John E. Anderson Graduate School of Management at UCLA and by the G.

and R. Loeb Foundation, recognized the work of reporters Debra Lynn Vial, Michael Moore, and Bruce Locklin, who produced "Formula for Disaster," a series of articles about the April 21, 1995, blast Five workers died and 40 other people were injured when a vat containing 10,000 pounds of churning chemicals blew apart at Napp. The three-part series pieced together a picture of a company that poorly trained its workers, disre NASDAQ 1,178.33 down 21.33 BONDS fw Ttm. 7.05 yield up 0.15 Flying right When Gordon BetJiune took the helm of Continental, the airline was limping along on an economic wing and a prayer. But three yea's, Bethune has turned Continental into one of the hottest companies the industry.

B-3 B-6 B-7 B-7 Briefly NYSE Amex Nasdaq National Mutual Funds DOLLAR 104.35 yen down 0.97.