John Stucke

Washington's insurance commissioner has sued Ernst & Young LLP, accusing the auditing firm of failing to uncover, divulge and stop accounting abuses at bankrupt Metropolitan Mortgage & Securities Inc. Commissioner Mike Kreidler – who took control of Metropolitan affiliate Western United Life Assurance Co. earlier this year – said the Big 4 accounting firm didn't do its job and thus didn't protect policyholders and investors.

Spokane business leaders are trying to start a new program in Spokane to teach first-year University of Washington medical students. Backers of the idea say it's a natural fit with Spokane's well-established health care industry and a promising opportunity to turn teaching into medical research and perhaps novel ideas that inspire the birth of new companies.

Hundreds of retired Steelworkers in Spokane are poised to lose thousands of dollars each as a federal agency takes control of the underfunded pension plans of bankrupt Kaiser Aluminum Corp. Steelworkers who retired early from the old Mead smelter to draw an enhanced pension stand to lose their monthly supplemental pension payment. The federal agency, the Pension Benefit Guaranty Corp., also wants that group to pay back the monthly supplements they've collected since April.

About 450 more employees at Empire Health Services joined a large union that now represents about 2,000 caregivers at Empire's two Spokane hospitals, Deaconess Medical Center and Valley Hospital and Medical Center. The vote Thursday night brings nearly every employee of the hospital system into the Service Employees International Union District 1199NW at a delicate time. Empire recently accepted the resignation of CEO Garman Lutz and continues to wrestle with myriad financial challenges, among them rising charity cases and bad debts, lagging Medicare and Medicaid reimbursement rates and an unexpected drop in patient numbers.

A federal agency that insures corporate pension programs will rescue Kaiser Aluminum Corp.'s underfunded retirement plan covering 9,600 hourly employees. The decision affects about 4,000 Steelworkers in the Spokane region, including retirees, laid-off employees and those still on the job.

Record-high fuel prices threaten to make heating homes across the Inland Northwest especially expensive in coming months. Whether it's heating oil, natural gas or electricity, homeowners should brace for a costly winter.

Reversing a steady decline of manufacturing jobs, Triumph Composite Systems Inc. has a bit of good news: It's recalling workers. The aerospace firm that bought Boeing Co.'s plant on the West Plains is preparing for an uptick in business that requires 21 more employees, said company spokesman Dick Welsh.

ODESSA, Wash. – When Metropolitan Mortgage collapsed this year, Odessa was hard hit. Of the 940 people in this tidy farm town west of Spokane, about 70 stand to lose most of the money they invested in the company. So do community groups, churches and businesses. The total losses in Odessa could reach more than $4 million.

Group Health Cooperative members will be able to receive inpatient care at Valley Hospital and Medical Center beginning next month. Lloyd Guthrie, Group Health's district administrator, announced the organization has a new working relationship with Valley designed to better serve its 15,000 Spokane Valley patients.

ODESSA – This weekend is the big one for Tom Schafer. In fact, it's the big one for the whole town of Odessa, a tidy wheat-farming town that throws open its rich German-Russian heritage each September to all takers.

Wheat sellers remain frustrated that Iraq continues to buy its grain from Australia rather than the United States. U.S. Wheat Associates, a national marketing group, said Thursday that Iraq recently purchased 800,000 metric tons of wheat from Australia. That's about 29 million bushels, or 15 percent of an annual Washington wheat crop.

The legal costs of defending former Metropolitan Mortgage & Securities Inc. executives and board members are adding up. Law firms representing the bankrupt company's former officials want to draw fees from a $17 million pool of insurance money. That money is considered an asset to creditors.

Thousands of Metropolitan Mortgage & Securities creditors may receive a small check next year as the failed financial firm is pulled apart and sold off piece by piece. The checks are likely to be just cents on the dollar of the creditors' original investment and will be paid only to holders of unsecured bonds called debentures.

A court-appointed examiner investigating Metropolitan Mortgage & Securities will now focus on business dealings between the company and its many affiliates. Federal Bankruptcy Court Judge Patricia Williams said Monday that inter-company transactions should be studied to ensure fairness to different creditor groups.

Creditors in the Metropolitan Mortgage & Securities Co. bankruptcy case want to hire a law firm by next month to sue the big accounting firm Ernst & Young LLP, the creditors' lawyer said in a hearing Friday. Stung by the realization that assets such as property and notes might only be enough to return 15 cents on the dollar, creditors have pinned their hopes on a legal theory that Ernst & Young failed in its watchdog role as Metropolitan's auditor.

Investors in bankrupt Metropolitan Mortgage & Securities Co. could recover as little as 15 cents on the dollar, a devastating loss of wealth for the thousands of people who entrusted their savings to a company that's now plagued by accounting scandals and federal investigations. The executive hired from outside to run Metropolitan after it filed for bankruptcy protection said Thursday the recovery depends on the successful sale of notes and property, especially beachfront lots in Hawaii that could be worth tens of millions.

In the midst of a difficult year, Spokane Valley electronics manufacturer Servatron Inc. is looking ahead to a better 2005. A new contract should help ease the troubles that beset Servatron during 2004, said company President Larry Panattoni.

Judy Hurt will lose her job in October. It's a startling situation to be in. She has been a licensed practical nurse at Sacred Heart Medical Center for 23 years, and never dreamed she and her co-workers would be laid off by the hospital in a targeted cost-cutting move.

Kaiser Aluminum posted a $24.2 million profit during the second quarter of 2004, its first since filing for bankruptcy protection in February 2002. However, the company also pushed back its deadline to emerge from Chapter 11 until mid-2005 — an ominous sign for Trentwood Steelworkers, who point to a labor contract that expires next year. Steelworkers aren't anxious to negotiate a new pact while the company's still under Bankruptcy Court protection.

Costs in the Metropolitan Mortgage & Securities Co. Inc. bankruptcy are piling up, even as creditors worry about recovering at least some of their investments. In the first part of the year, lawyers, accountants and advisers who are working to unravel the financial mess have charged the company about $4 million, according to records filed in U.S. Bankruptcy Court in Spokane. And they will get paid before anyone else.

The $525 million asking price for Kaiser Aluminum Corp.'s stake in an Australian refinery apparently is too rich. The company received no qualified bids for its 20 percent interest in the Queensland Alumina Ltd. refinery. Without a bid, Kaiser canceled its Aug. 16 auction and is rethinking its sales strategy for the prized asset, the company said Wednesday.