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Startups and tech giants offering more options to send Web video through the tube, see Page B3. www.bendbulletin.com/business
THE BULLETIN • TUESDAY, AUGUST 24, 2010
MARKET REPORT
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STOC K S R E P O R T For a complete listing of stocks, including mutual funds, see Pages B4-5
B U S I N E SS IN BRIEF Cascade Bancorp airs revised ’09 earnings Cascade Bancorp, the parent company of Bank of the Cascades, released a revised annual report for 2009 showing a net loss from $114.8 million, up from a previously reported amount of $93.1 million. The revision came because banking regulators told Bank of the Cascades in March to make its reserves for loan and lease losses deeper in 2009, Bank of the Cascades officials said earlier this month. The reserves are set aside in case of bad loans. Cascade Bancorp officials did so, increasing the loan loss provision from $113 million to $134 million, but it caused other accounting changes in the full year 2009 and first quarter 2010 call reports. A revised first quarter report for 2010 has not yet been released, and the bank’s second quarter report is set to be released this morning at 6 a.m, said Executive Vice President and Chief Financial Officer, Greg Newton. Bank of the Cascades also filed an unopposed motion Friday related to a federal lawsuit it filed against a Philadelphiabased investment firm in July. The motion would give the investment firm, Cohen & Co. Financial Management LLC, an extension from Aug. 23 to Sept. 15 to respond to the bank’s lawsuit. The new motion says the parties have been in communication in an attempt to resolve the issue outside of court, an objective they believe may be possible. In the suit, Bank of the Cascades alleges Cohen & Co. is refusing to adhere to an agreement the two made to discount and liquidate millions of dollars in liability Cohen & Co. holds against the bank. If that liability is liquidated, the bank alleges it could secure $150 million in investments it has been pursuing.
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U.S. judges demanding tough bank settlements More and more, prosecutors face scoldings from the bench over deals with scofflaw financial firms By Binyamin Appelbaum New York Times News Service
WASHINGTON — Everything was rolling along traditional lines. A bank broke the rules. The government found out. The company agreed to pay a fine and improve its behavior.
And then the judge assigned to approve the deal blew his top. In a scene that is becoming increasingly common, Judge Emmet G. Sullivan of U.S. District Court chewed out federal prosecutors at a hearing in Washington last week for a proposed
settlement with Barclays. “Why isn’t the government getting tough with banks?” he asked. Just one day earlier in the same courthouse, Judge Ellen Segal Huvelle refused to sign a settlement between the government and Citigroup, demanding, “Why would I find this fair and reasonable?” She ordered government lawyers to return with answers next month. See Judges / B5
EXECUTIVE FILE
Open-late bakery in niche of the business
trend $4 $3 $2 $1 2008
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Source: U.S. Energy Information Administration © McClatchy-Tribune News Service
$17.993 SILVER CLOSE CHANGE +$0.001
Judge Jed Rakoff of the Federal District Court was the first of several judges to question government settlements with banks and ask for stiffer penalties. Justin Maxon The New York Times
HP ups rival Dell in race to exit PC business The Associated Press
SAN FRANCISCO — The world’s two biggest personal computer makers are locked in a pricey struggle over which can move away from the PC business the fastest. Hewlett-Packard Co. offered $1.5 billion on Monday for 3Par Inc., a company whose data-storage machines are designed for “cloud computing,” or delivering services over the Internet. HP’s rival, Dell Inc., last week offered about $400 million less for 3Par, and many analysts and investors expect Dell to make a sweeter counteroffer. HP’s offer comes just weeks after HP CEO Mark Hurd’s ouster over inaccurate expense reports and shows that the company is committed to continuing to grow through acquisitions, even without him at the helm.
Moving away from computer building Jeff Wick / The Bulletin
Gordon Benzer removes the day’s last batch of rustic style, artisan baguettes from the oven at his Bend-based bakery, baked., on Saturday. Benzer operates the bakery as an afternoon and evening bakery, hoping to fill a niche in Bend.
Owner focuses on quality ingredients for Bend neighborhood By David Holley
The basics What: baked. Where: 735 Columbia St., Bend Who: Gordon Benzer Employees: 1 Phone: 541-3892390 Website: www. facebook.com/ bakedinbend
The Bulletin
W
hile shopping organic has for years been the vanguard of food trends, buying local is, at least in Central Oregon, the newest movement. Gordon Benzer founded his new bakery, baked., based partly around buying local. Benzer uses mostly Northwest products to produce his breads and pastries, ranging from wholegrain and challah loafs to sweets, like lemon bars and scones. He sells the goods from his storefront on Northwest Columbia Street near Galveston and keeps hours relatively unusual for a bakery — from 12 p.m. to 9 p.m. Tuesday through Saturday. “I want to feed the people who live and work
here,” Benzer said about his west-side neighborhood. “I want to build the business on the quality of the product rather than hype and advertising. I’m really just much more interested in feeding people.” Benzer, 25, does that by often using local, natural, organic ingredients in his breads and pastries, which he mixes and crafts by hand. He keeps hours in the afternoon and evening because, he said, it’s an unfilled niche in Bend. It allows customers pick up a fresh loaf of bread or dessert for dinner after leaving work or after picking children up from school. The bakery’s later hours also allow Benzer to work a more normal day, unlike most bakers, who start in the early hours of the morning. See Bakery / B2
Pump prices U.S. weekly average retail Since last week price for one Down 5¢ gallon of regular unleaded Week ending gasoline: Aug. 23, 2010 Two-year $2.70
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By Jordan Robertson and Jessica Mintz
Bend Venture Conference set Bend Venture Conference, during which startup businesses can pitch their plan in order to secure up to $175,000 in venture capital, will be held Oct. 14 and 15, Economic Development for Central Oregon announced Monday. The deadline is Sept. 10 for businesses to apply to be one of five presenting companies, or 10 wild card companies. Out of those 15 companies, one winner will be selected to receive the $175,000. One benefit of presenting is networking, according to EDCO, because the conference audience is filled with angel investors. The keynote speaker will be Jonathan Heiliger, vice president of technical operations at Facebook. For more information, visit www.bendvc.com. — From staff reports
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Tech Focus
Arrest offers glimpse of hacker’s world By Andrew E. Kramer New York Times News Service
MOSCOW — On the Internet, he was known as BadB, a disembodied criminal flitting from one server to another selling stolen credit card numbers despite being pursued by the U.S. Secret Service. And in real life, he was nearly as untouchable — because he lived in Russia. BadB’s real name is Vladislav A. Horohorin, according to a statement released last week by the U.S. Justice Department, and he was a resident of Moscow before his arrest by the police in France during a trip to that country earlier this month. He is expected to appear soon before a French court that will decide on his potential extradition to the United States. See Hacker / B2
A video on badb. biz, promotes credit card fraud as a lighthearted affair. American authorities say Vladislav Horohorin of Moscow, known as BadB, headed “one of the most sophisticated organizations of online financial criminals in the world.” The New York Times
The willingness to spend so much money on such an obscure company underscores how aggressive both companies are about moving into more profitable markets than PCs. Cloud computing is one of those markets. It has caught on because many companies aren’t buying their own computer servers for certain tasks anymore. Instead, they’re paying to have software they would have stored on those machines delivered to them over the Internet. Companies such as Dell and HP are trying to take advantage of the trend by offering those kinds of cloud-computing services directly on a subscription basis, along with the equipment and software for customers to build their own cloud systems. One problem, though, is the machines needed to run such operations are designed to be shared by multiple customers. Those machines need to ramp up or scale down their output quickly based on demand. Storage machines offered by 3Par could help cut the cost of operating those services because they are designed for such tasks.
Dell opens with $1.13B Dell began the bidding contest last week by offering to buy 3Par for $18 per share, or $1.13 billion. HP responded by offering a third more, or $24 per share, for a total of $1.5 billion. Investors, believing Dell will make a counteroffer, sent 3Par shares above HP’s offer price. Shares of 3Par closed Monday at $26.09, up $8.05, or 45 percent. See Outbid / B5