Business today

SURGERY CENTER SPINOFF: HealthSouth Corp., the nation's biggest chain of rehabilitation hospitals, plans to spin off its surgery center division into a new public company. The Birmingham company said the move would allow the surgery business, which does $1-billion in annual revenues, to grow without concerns about recent reductions in Medicare reimbursements to the rehab business. The new company, Surgical Care Affiliates, will operate 209 facilities in 37 states, including surgery centers in Tampa and St. Petersburg. HealthSouth will continue to operate more than 1,500 rehab centers, 11 in the Tampa Bay area.

HOME BUILDERS LINK UP: Lexington Homes of Port Richey has acquired 50 percent of First Dartmouth Homes, a St. Petersburg-based luxury builder, the two companies said Tuesday. The purchase price was not disclosed. The combined operation is expected to have 2003 sales revenues of about $100-million and expects to sell more than 500 homes. First Dartmouth builds custom homes that sell for more than $1-million. Lexington Homes' typical price range is $150,000 to $350,000 and it builds in Citrus, Hernando, Pasco, Pinellas and Hillsborough counties. Lexington co-founder Craig Fiebe will become president of First Dartmouth, and his partner Craig Gallagher will be vice president. First Dartmouth's chief executive officer, Frank S. Maggio, will retain that title.

ENRON SETTLEMENT: A network of foreign accounting firms affiliated with Arthur Andersen LLP has agreed to pay $40-million to settle a lawsuit brought by Enron Corp. investors. Part of the settlement will end up in Florida's state pension fund, which lost more than $300-million on Enron stocks and bonds. However, the settlement represents only a tiny fraction of more than $25-billion in total investor losses on Enron, and $15-million will come off the top to pay legal costs other than lawyers' fees. The U.S. accounting firm, Arthur Andersen LLP, was Enron's auditor. Litigation against that firm continues in federal court in Houston. The foreign accounting firms also are expected to settle separately with Enron creditors.

SEC ALTERS RULES: The Securities and Exchange Commission unanimously adopted rules Tuesday that require companies to file financial reports earlier and force chief executives to take responsibility for their accuracy. Despite an outcry from public companies, commissioners voted 5-0 to require large U.S. firms to file quarterly reports within 35 days of the end of the period, 10 days sooner than current rules. Annual reports would be due within 60 days after the end of the year, instead of the current 90 days. The regulations go into effect Thursday.

BANKER LEAVING: Paul Bailey, a founding director and president of Signature Bank of St. Petersburg, said Tuesday that he is leaving the bank and possibly the banking industry. Bailey, 47, said he is exploring options after 25 years in banking. Signature chief executive David Feaster named banking veteran Norris Counts, 64, as the new president. Founded in 1999, Signature has about $72-million in assets and $65-million in deposits.

SALES TAX ARREST: Lawrence Zollo, 44, owner of two Tampa marketing companies, was arrested on a charge of sales tax theft, the Florida Department of Revenue reported. Zollo, who owns Turnkey Marketing Inc. and Turnkey Advertising & Marketing, is accused of filing false tax returns and failing to turn over $129,663 in sales taxes collected from 1997 to 2001. Investigators found the discrepancies by examining records for Zollo's direct-mail advertising business. If convicted, he could be required to pay the tax with penalties and interest, reimburse the state for its investigative costs, pay a $10,000 fine and be sentenced to up to 30 years in prison. Zollo could not be reached for comment.

KRAFT RAISES DIVIDEND: Kraft Foods Inc., the biggest U.S. food company, raised its quarterly dividend by 15 percent, citing its financial performance. The company will pay a dividend of 15 cents a share on Oct. 7 to shareholders of record as of Sept. 16. Kraft was paying 13 cents a share each quarter.

OXYGEN LAYING OFF STAFF: Oxygen Media said Tuesday it is laying off nearly two-thirds of the staff at its oxygen.com Web site and is scaling back the site's content because of difficult business conditions. Twenty-nine people, out of a total of 44 at oxygen.com, are expected to lose their jobs over the next three months, bring the site's total staff to 15, said spokeswoman Kassie Canter.

TREASURY AUCTION: The interest rate on the U.S. Treasury's four-week bills increased at the weekly auction of the securities. The Treasury sold $25-billion of the bills at a discount rate of 1.685 percent, up from 1.66 percent a week ago and the highest since 1.70 percent on July 30. Treasury bills, which represent short-term government borrowing, are sold at a discount from maturity value.

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