Record year for bankruptcies

SEATTLE — Bankruptcy filings in Western Washington reached a record high in 2002 and have more than doubled in the past nine years.

Bankruptcy cases totaled 28,880 — most of them for personal bankruptcies — up 7 percent from the previous record of 26,987 in 2001, according to figures released this week by the U.S. Bankruptcy Court, Western Washington district.

Business filings accounted for 459 cases last year, up from 311 in 2001 and the largest jump in six years. Non-business bankruptcies reached 28,421 last year, up from 26,676 in 2001.

Chapter 7 filings, the most common form of personal bankruptcy, rose 7 percent to 23,397 Chapter 11 filings rose 15.9 percent to 182, and Chapter 13 filings increased 6.4 percent to 5,299. Two cases of Chapter 12, which allow farmers to reorganize their debts, were filed last year.

Chapter 7 allows individuals to keep some property and sell the rest to repay creditors. Under Chapter 13, debtors may repay creditors in installments over three to five years. Chapter 11 allows businesses to keep operating while formulating a plan to repay their creditors.

In 1993, business filings accounted for 1,036 of that year's bankruptcies, compared to 12,602 personal filings.

Former Andersen executive joining Weyerhaeuser

SEATTLE — Weyerhaeuser named the former head of Arthur Andersen's Seattle office to lead its strategic planning.

Patricia Bedient, 49, will oversee planning and economic research operations at Federal Way-based Weyerhaeuser beginning Feb. 3. She replaces Sandy McDade, who was named last week to head operations in Canada, which accounts for most of the company's forestlands.

During 27 years at Arthur Andersen, Bedient advised clients — including Weyerhaeuser — on financial reporting, mergers and acquisitions and operations.

She reports to Steve Rogel, Weyerhaeuser's chief executive, and advises the company's 10 other top managers.

Dry winter could cut into Puget Energy's 2003 profit

SEATTLE — While Puget Energy expects 2002 profit to be on the high end of its previously announced range of $1.20 to $1.25 a share, 2003 earnings could be hurt by the dry winter, according to a securities filing yesterday.

If the forecast for less rain comes true, the company said it will be forced to replace lower-cost hydropower with more expensive thermally generated power that is purchased. The increase in power costs could reduce its earnings by about

25 cents in 2003.

If costs exceed a certain threshold, rates could go up because of the new variable power-cost adjustment structure, which allows the company to adjust rates along with the wholesale cost of natural gas or electricity.

The company will report fourth-quarter earnings Feb. 12.

Former Lands' End chief named to lead Classmates

SEATTLE — Renton-based Classmates yesterday named former Lands' End executive Michael Smith as its new CEO.

Classmates, which runs the high-profile Internet site Classmates.com, placed its former CEO Michael Schutzler on leave in September and named Smith its interim CEO a week later. The company never explained why Schutzler, who was credited with helping the company become a "nationally recognized brand," was replaced.

Smith, the new CEO, served as president of Nordstrom.com, where he helped lead the unit to its first quarterly profit. He and Chief Executive Dan Nordstrom left in June after parent Nordstrom assumed nearly complete control of the online and catalog subsidiary. He also served as president and CEO of Lands' End.

Spokane Gateway store closed to cut expenses

POWAY, Calif. — Gateway closed its Spokane retail store as part of an effort to reduce costs as the U.S. personal-computer maker tries to regain profitability.

It also closed three other stores, in Memphis, Tenn., and in Encinitas and Fresno, Calif. Seventy employees are being offered severance benefits or a chance to apply for work elsewhere in the company, spokesman Greg Lund said.

Gateway, which has posted losses in eight of the last nine quarters, will decide whether to keep open more than 100 stores as they come up for lease renewals this year, Lund said. Gateway now has 268 stores, including outlets in Redmond, Lynnwood, Silverdale, Tacoma and Olympia.

Nation / World

Simon raises bid to buy rival shopping-mall owner

DETROIT — Simon Property Group has sweetened its bid to $1.74 billion for rival shopping mall owner Taubman Centers, which has already rejected two earlier offers.

Simon Property said yesterday it was offering $20 a share for all of Taubman's shares, up from its most recent offer of $18 a share, and set a Feb. 14 deadline for Taubman shareholders to accept it. Simon owns the Northgate and Tacoma malls.

In addition, Simon said it is being joined in its latest effort by Westfield America, a subsidiary of the Australian company Westfield America Trust.

Taubman's board already has rejected two unsolicited takeover bids by Simon — one valued the company at $17.50 in cash and the other at $18 per share.

Taubman said its board will meet before responding to Simon's latest announcement.

EchoStar's breakup fee boosts profit for Hughes

LOS ANGELES — A $600 million breakup fee paid to Hughes Electronics by former merger partner EchoStar Communications contributed to increased profits in the fourth quarter for the operator of the DirecTV satellite television service.

Hughes also said yesterday it is considering seeking bankruptcy protection for its DirecTV Latin America division because of continuing economic and political turmoil in the region.

Hughes said it has raised prices in Argentina and Venezuela while trying to reduce programming costs in the region. The division has also been hurt by devaluation of local currencies.

Compiled from Seattle Times business staff and Bloomberg News.