Tag: Stephen Farber

Follow the money: A trail of footnotes and government documents leads to Insider Louisville’s front door

By Jim Hopkins
Boulevard Publisher

In business journalism, some of the most interesting news shows up in fine-print footnotes in documents companies file with government agencies. Hospital and nursing giant Kindred Healthcare is great example. Last spring in a statement to stockholders, it disclosed two special payments to top executives: $6 million to then-executive vice chairman Paul Diaz in connection with his leaving the CEO’s job, and $250,000 to Chief Financial Officer Steven Farberto help him escape a high-profile dispute with a Glenview neighbor. But to uncover that, you had to follow three different footnotes on a table showing how much they got paid overall.

Insider Louisville logoThis leads me to another footnote, of sorts — one that appeared on a story today at Insider Louisville, the online news site launched in 2010, and to a document I’ve run across at the Securities and Exchange Commission. Together, they open a window on who’s investing in Louisville’s news media at a time when the once-dominant Courier-Journal has been losing influence amid steep staff cutbacks, shifting the balance of power in Kentucky’s biggest city. They underscore the importance of news outlets everywhere telling readers who’s behind the scenes, and about any conflicts of interest owners may pose for their publication. (I’ve got disclosures of my own.)

This morning, at the bottom of a long story about the Humana Foundation, Insider Louisville editors added this disclosure: “One of the five directors of the Humana Foundation is David A. Jones Jr., an investor of Insider Louisville.”

David A. Jones Jr.

Jones is one of Louisville’s more influential residents. He’s on the board of directors of Humana itself, and his father, David A. Jones Sr., is a co-founder of the insurance giant. Jones Jr. is a partner at Chrysalis Ventures, the Louisville venture-capital firm he founded in 1993, and he’s chairman of the elected seven-person board overseeing the Jefferson County Public Schools. (Here’s Chrysalis’s portfolio of company investments; it doesn’t show Insider Louisville, which suggests this was a personal investment.)

Tom Cottingham

To be sure, close readers of Insider Louisville have known Jones was an investor for several years. In August 2014, owner Tom Cottingham told readers he’d brought in three new minority investors he knew from a prior venture: Jones; Doug Cobb, the former Greater Louisville Inc. CEO, and Jon Pyles, now the site’s vice president of marketing. The story — which carried only a “staff” byline — didn’t say how much they’d invested, nor the exact size of their stake. Cottingham said he remained the majority holder.

Douglas Cobb

Now, though, an SEC document filed in April offers more clues about the publication’s investors, whom we learned this summer include a prominent heiress to the glittering Brown-Forman whiskey fortune. I can’t find any mention of the regulatory filing on Insider Louisville’s website, nor in any other media outlet in Louisville. My readers may well correct me after I publish this post; in any case, this is certainly the first time I’m writing about it.

The April 12 document shows that Insider Louisville LLC raised $975,000 from 12 investors in a $1.5 million stock offering that drew the first investment March 31. It didn’t identify the investors by name, however, and it didn’t say how big their stakes were. The first $450,000 was to pay down an undisclosed amount of debt, according to the document; anything left over would go to any of its directors: Jones, Cottingham, and a third named Jamie Wilson. (Who’s Wilson? I haven’t figured that out; maybe one of my readers knows.)

Minimum investment: $25K

Continue reading “Follow the money: A trail of footnotes and government documents leads to Insider Louisville’s front door”


A news summary, focused on 10 big employers; updated 5:21 p.m.

Traders at exchange
Anxious traders at the New York Stock Exchange today (New York Times).

The Dow Jones Industrial Average cratered 3.3% this afternoon, tumbling 589 points and wiping out its year-to-date gains as fears gripped markets with Britain’s stunning vote to  leave the E.U. The broader S&P 500 tumbled 3% and the Nasdaq slumped 3.8%. Latest news.

All 10 big-employer stocks tracked by Boulevard fell sharply:

To fully appreciate the magnitude of the losses, consider Kentucky’s richest family, the Browns of Brown-Forman. They saw $201 million of their more than $6 billion in paper wealth evaporate in a matter of hours.

This morning’s paper.

The impact of last night’s stunning Brexit news for Louisville employers will be greatest for those with extensive overseas footprints and currency exposure.

They include Brown-Forman, which sells 15 brands such as Jack Daniel’s in 160 countries worldwide. The U.K. is the company’s second-biggest market, accounting for 10% of fiscal 2016 sales, according to Brown-Forman’s annual report. Europe, excluding the U.K., was 21%. The U.S. is No. 1, with 46%. The company says foreign markets are increasingly important: “In fiscal 2016, we generated 54% of our net sales outside the United States compared to 41% 10 years ago.”

Other companies likely taking post-Brexit hits include Papa John’s, which operates in 39 countries; Yum in 130 countries and now reshaping overseas operations with a planned China spinoff in October; Ford, which is already reworking its European sales strategy, and Amazon, a relative newcomer abroad.

Boulevard’s Stock Portfolio companies routinely warn investors about risks of doing business outside the U.S. Papa John’s, for one, noted in its annual report that “international operations could be negatively impacted by changes in international economic, political, security or health conditions in the countries in which the company or our franchisees operate.”

Yum’s 14,600-unit KFC Division bears the biggest overseas exposure; it’s in 120 countries, with more than a third — 5,003 restaurants — in China.

Britain’s Guardian.

“Our business,” Yum says in its annual report, “is increasingly exposed to risks inherent in international operations. These risks, which can vary substantially by country, include political instability, corruption, social and ethnic unrest, changes in economic conditions .  . .  as well as changes in the laws and policies that govern foreign investment in countries where our restaurants are operated.”

Also, Yum warns, “results of operations and the value of our foreign assets are affected by fluctuations in currency exchange rates, which may adversely affect reported earnings.”

Boulevard’s Big 10 companies employ 63,000 workers in the Louisville area, and nearly 2 million worldwide.


Kindred’s Diaz paid $14.5 million last year, and ‘Mr. Social Security’ charged with fraud

News about Louisville’s major employers; updated frequently.

KINDRED paid former CEO Paul Diaz a princely $11.6 million in special compensation last year as part of his move to vice chairman; that boosted his total to $14.5 million vs. $6 million in 2014, the company said in an SEC filing yesterday. The hospital and nursing home giant also disclosed it paid $2.2 million to buy CFO Stephen Farber‘s home in exclusive Glenview out of concern for his family’s personal safety amid a high-profile property dispute with a neighbor, the filing says; WDRB’s got background. (We track exec pay at big employers.)

In other newsEric “Mr. Social Security” Conn is charged with defrauding the Social Security Administration out of $600 million in disability payments in Eastern Kentucky.