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The Spokesman-Review Newspaper
Spokane, Washington  Est. May 19, 1883

Survey: Drug benefit intact for retirees

Compiled from wire reports The Spokesman-Review

Four in five businesses that provide prescription drug coverage for their retirees will accept a government subsidy next year and continue providing that benefit, according to a survey of 300 large companies.

With the beginning of a new drug benefit under Medicare, some feared that businesses would drop coverage for retirees. Under such a scenario, retirees would generally lose because the Medicare benefit is usually not as generous as that provided by private employers.

“The widespread dropping of drug benefits that some had feared has been averted so far as businesses figure out what their long-term response would be,” said Drew Altman, president and CEO of the Kaiser Family Foundation, which conducted the survey along with Hewitt Associates, a consulting company.

“That’s a smaller share than many had feared,” said Tricia Neuman, a vice president with the Kaiser Family Foundation, a nonpartisan research organization.

Under the Medicare law, the government provides businesses with a new financial incentive to continue providing retirees with prescription drug coverage: a tax-free subsidy equal to 28 percent of the retiree’s drug costs.

Gannett would consider buying Knight Ridder

New York Gannett Co. would take a “hard look” at any potential acquisition opportunities, including Knight Ridder Inc., a major newspaper company that has been forced by its largest shareholders to explore a sale, Gannett CEO Craig Dubow told an investor group Wednesday.

Dubow, speaking at an investor conference sponsored by Credit Suisse First Boston, said the company would carefully consider any acquisition opportunity but would only proceed if it was in the best economic interest of its shareholders.

Gannett, which is based in McLean, Va., is the nation’s biggest newspaper publisher with 99 daily newspapers, including USA Today, the largest circulation daily in the country. It also operates 21 television stations and its subsidiary Newsquest is the second-largest regional newspaper publisher in the United Kingdom.

San Jose, Calif.-based Knight Ridder publishes the Miami Herald, the San Jose Mercury News and 30 other newspapers.

Gannett shares rose $1.31, or 2.2 percent, to $60.50 in midday trading on the New York Stock Exchange, while Knight Ridder shares gained 48 cents to $61.03.

Gannett’s chief financial officer Gracia Martore said the company expected to report fourth quarter earnings that were within analysts’ estimates of $1.40 to $1.44 per share, but she said the results may be in the low end of that range.

Brewer in arrears on water bill files bankruptcy

Pittsburgh Pittsburgh Brewing Co., the maker of Iron City Beer, filed for protection from creditors under federal bankruptcy regulations Wednesday after failing to pay $2.5 million in water and sewage bills.

Pittsburgh Brewing, which employs about 250 people, will continue to operate while under Chapter 11 protection, said company attorney Robert O. Lampl.

The company had defaulted on sewage treatment payments dating back to 1996 and had failed to pay current water and sewage bills – charges totaling about $2.5 million, said Holly Parada, a spokeswoman for the Pittsburgh Water & Sewer Authority.

On Monday, the authority issued a notice threatening to cut off water service if the company’s obligations weren’t met by the end of the day Tuesday. The bankruptcy filing prevents the agency from terminating water service, Parada said.

The filing in federal court in Pittsburgh shows Pittsburgh Brewing has estimated assets of less than $10 million and debts of less than $10 million.

The company has struggled to survive in recent years amid a declining beer market and tougher competition. It took the unusual step of trying to win a government bailout of its pension plan before seeking bankruptcy and was awaiting a federal agency’s decision on the matter.