PhillyDeals: Corbett pick is hard-liner on state pensions

JPMorgan Chase & Co. has picked Philadelphia to be the base for a Mid-Atlantic lending team for East Coast companies with sales under $250 million a year.
JPMorgan Chase & Co. has picked Philadelphia to be the base for a Mid-Atlantic lending team for East Coast companies with sales under $250 million a year.
Posted: February 17, 2011

Gov. Corbett will push to cut pension benefits from the $25 billion Pennsylvania State Employees Retirement System (SERS), if his choice for a new board member is any guide.

The governor is recommending Wallace "Wally" Nunn, the blunt-speaking ex-chairman of the Delaware County Council, retired Citigroup SmithBarney bond banker, longtime GOP fund-raiser, and Vietnam War veteran, for a seat on the SERS board, pending state Senate approval.

Money managers can count on Nunn not to upset the SERS high-maintenance investment program, which spends hundreds of millions of dollars a year on private money managers for hedge, buyout, real estate, and commodity funds and other investments.

But Nunn is on record calling for cuts to future retirees' pensions and changes in union contracts and state practices that require increased taxpayer support for SERS, as fund investments and payroll deductions fail to cover payouts for the growing population of state retirees.

He summarized his views in a piece The Inquirer published in June, criticizing Pennsylvania's "bloated pension system enjoyed by state workers, public school teachers and (even more so) elected officials."

Nunn called SERS "the pension system from hell," with unfunded liabilities that threaten to swamp the state budget.

He blames that on politicians from both parties, but he feels workers and retirees who benefit from SERS, not taxpayers, should have to make up the shortfall.

He disagrees with legislators such as State Sen. Dwight Evans (D., Phila.) about last year's bipartisan pension-reform bill, which pushed billions in needed subsidies for the state teachers' and state workers' pensions into the future. Nunn called the bill a "Ponzi scheme."

Shut the books

Borders, the bookstore chain, plans to close its stores in Langhorne and King of Prussia, according to a list the company filed in its federal bankruptcy case in Manhattan.

Borders will close 200 of its 500 full-service stores nationwide - including in Reading, the Lehigh Valley, Flemington, and the Harrisburg suburbs - and two of the 12 it still operates in the Philadelphia area.

Freeze and flood

Stock analyst Gerard Sweeney, who covers water utilities at Boenning & Scattergood in West Conshohocken, says it will cost Aqua America more than $1 million - a penny a share for the Bryn Mawr for-profit utility - to fix an unexpected increase in water-main breaks after the "increased freeze/thaw cycles" this winter in Southeastern Pennsylvania, where Aqua operates water systems in dozens of suburban communities.

In December, Aqua says, it had 185 water-main breaks, twice the normal volume, all in pre-1970s pipes. Since late January, Aqua has fixed 163 breaks, up from 89 last year, spokeswoman Donna Alston told me. Aqua says it spends $300 million a year on upgrading pipes and on other capital projects.

No sale

Tengion Inc., the East Norriton developer of human "neo organ" tissue, says it will run out of money by April if it doesn't find "either a sale transaction or alternative financing."

It was close to a sales agreement with an unnamed, publicly traded company, but "recent increases in the trading price and volume of Tengion's common stock" scared off a would-be buyer, Tengion reported in a Securities and Exchange Commission filing.

Tengion went public in April at around $5 a share, fell to less than half that by December, but jumped as high as $6 in recent days, as though someone knew a deal was in the works.

Temps wanted

A modest recovery signal:

Home Depot, the construction and home-repair warehouse retailer, says it will hire more than 60,000 temporary workers to handle spring sales, on top of its regular workforce of more than 300,000, after sales last year rose for the first time since 2006.

Rival Lowe's plans to add 50,000 temps in the spring, up from 43,000 last year, spokeswoman Katherine B. Cody told me.

Chase in Philly

JPMorgan Chase & Co. has picked Philadelphia to be the new headquarters of a Mid-Atlantic commercial-lending team the New York banking giant says will seek to finance East Coast companies with sales under $250 million a year.

Chase named South Jersey resident Wayne Trotman, formerly with Chase's financial-services company lending group, to head the effort. On his staff, Mark Schrieber of Berwyn will focus on companies in the Philadelphia-Wilmington area. Others in the group will focus on Virginia and the Carolinas.

Pricing out?

With online gambling sites putting the odds of a National Football League owners' lockout of the players this year at better than 2-to-1, Disney has the most to lose among sports-dependent media giants because its ESPN sports network stands to lose ads and contracts, analyst Tony Wible writes in a report to clients of Janney Capital Markets. ESPN is Disney's biggest earner.

Even without a work stoppage, the NFL contract, and similarly tough negotiations at the National Basketball Association, will likely drive prosports-viewing charges higher, turning off pay-TV viewers, Wible predicted.

By contrast, Viacom and other nonsports media stand to gain from a work stoppage and higher progame TV costs, as sports

fans look for something else to watch.

Linking up

ThingWorx, a Downingtown firm that makes "applications platform" software tools linking smartphones and other computer devices, says it has raised $5 million from Safeguard Scientifics of Wayne and other investors. ThingWorx founder Russell Fadel ran Lighthammer Software before he sold it to SAP AG.


Contact columnist Joseph N. DiStefano at 215-854-5194 or JoeD@phillynews.com.

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