Hartford Business Journal

6 Hartford Business Journal • March 2, 2015 www.HartfordBusiness.com By the NumBers $60M The amount by which the Office of Policy & Management miscalculated the state's constitutional spending cap for the next fiscal year, which means further budget cuts may be necessary. $325M The amount of money Treasurer Denise Nappier says Gov. Dannel P. Malloy has underbudgeted for bonding costs in 2016 and 2017. 6% The percent of Connecticut residents without health insurance last year, down from more than 12 percent in 2013, according to Gallup. $10 A lawmaker's proposed cap on utility companies' monthly fixed residential charges, which is well below Connecticut Light & Power's current fee of $19.25. top 5 most read on HartfordBusiness.com ■ Back9 suspends operations amidst cash crunch ■ UConn prez: Proposed funding cuts would have 'devastating impact' ■ Former CT mental health commish lands at Hartford Healthcare ■ Whitcraft inks $234M Pratt contract ■ Nappier: Malloy budget assumes aggressive debt service savings stay CoNNeCted For breaking and daily Greater Hartford business news go to www.HartfordBusiness.com. HBJ on Twitter: @HartfordBiz HBJ on Facebook: www.facebook.com/HartfordBiz HBJ on LinkedIn: www.linkedin.com/company/ the-Hartford-Business-Journal Daily e-newsletters: HBJ Today, CT Morning Blend www.HartfordBusiness.com/subscribe Weekly e-newsletters: CT Green Guide Weekly www.HartfordBusiness.com/subscribe top story Back9 suspends operations amidst cash crunch Hartford's Back9Network suspended operations last week due to what it described as a temporary shortfall in capital. "Management and the board of directors are planning next steps and will continue their efforts to secure long-term, operating capital," Back9 said. On the morning of the Feb. 23 announcement, a Back9 spokesman said the company would not comment further on its situation. The development comes after a slew of challenges the fledgling media com- pany has faced since its programming went live on DirecTV in September. It cut its workforce by 40 percent in late January, and a source told the Hartford Business Journal soon after that the company was seeking signifi- cant capital in order to keep its doors open. The company sued shareholder and former CEO James Bosworth in De- cember, alleging he had violated his separation agreement by making dispar- aging comments to potential investors and disclosing financial information. The suit went to arbitration earlier this month. The company received a nearly $5 million loan in 2012 from the Depart- ment of Economic and Community Development, which said last week it is monitoring the situation. Law Anthem hit with class-action lawsuit over data breach An East Hampton woman has filed suit against Anthem, alleging that the health insurer was negligent in protecting the personal data of its 37 million customers. Anthem customer Wilma J. Peterson's Feb. 20 complaint in Connecticut's U.S. District Court asks Judge Victor Bolden to certify class action status for an unknown number of affected Anthem customers, whose collective claims exceed $5 million. The suit alleges negligence, breach of contract, unjust enrichment, and viola- tion of Connecticut's Unfair Trade Practices Act. An Anthem spokeswoman said last week that the company does not com- ment on pending litigation. The Milford law firm representing Peterson did not return a call seeking comment. Anthem disclosed the breach on Feb. 4, saying that thieves accessed 80 million customer records, which included names, dates of birth, and social security numbers. That information would allow a hacker to set up fraudulent financial accounts or tax returns in a customer's name, the suit says. The company has offered two years of credit monitoring services, which Pe- terson — who purchased credit insurance after the breach was announced — said is inadequate. The hack creates a larger problem for customers than other recent breaches — in which debit and credit card information was stolen — because it will require monitoring credit reports for a much longer period, the complaint says. "Hackers tend to lay low when data breaches are exposed," the suit reads. "They often wait until consumers are less likely to be on the lookout for fraudulent activities." heaLth Care & INsuraNCe Access Health enrollment tops 204K as uninsured rate falls The state's health insurance exchange, Access Health CT, said it enrolled 204,358 members during Obamacare's second annual enrollment period, which ended Feb. 15. Of that number, 80 percent, or 162,494, are in Medicaid plans while the re- maining 20 percent, 41,864, are in plans offered by commercial payers. A total of 5,889 people enrolled at Access Health enrollment centers in New Britain and New Haven, while 2,416 signed up at partner locations. Including 2014 enrollment of more than 208,000 people, the exchange now has just over 110,000 commercial insurance customers, Access said. Meanwhile, Gallup reported last week that 6 percent of Connecticut's population was uninsured in 2014, down from 12.3 percent in 2013. Connecticut was tied with Hawaii last year for second-lowest uninsured rate. Massachusetts, which passed a healthcare reform law in 2006, remains at the top, with 4.6 percent uninsured. GoverNmeNt & poLItICs S&P settlement lowers CT's FY15 deficit The state reduced its fiscal 2015 deficit by nearly half over the last month, thanks largely to Connecticut's $36 million settlement with Standard & Poors over its ratings of mortgage-backed securities leading up to the 2008 financial crisis, budget officials said. The settlement, announced earlier this month, and a series of budget rescissions announced Jan. 23 combined to reduce the projected deficit for the year ending June 30, 2015, from nearly $121 million to $61.2 million, Office of Policy Manage- ment Secretary Benjamin Barnes said in a Feb. 20 letter to Comptroller Kevin Lembo. Barnes said his forecast assumed 25 percent growth in personal income tax collections in April. Those collections have been tricky to predict, increasing 20 percent in 2013 and falling 20 percent in 2014. Each percentage point the prediction is off is worth $13 million. reaL estate Snow sandbags CT's Jan. house sales A frigid, snowy January cut into sales of Connecticut single-family houses last month, two Realtors surveys said last week. House sales statewide totaled 1,629 last month, a 6.5 percent drop from the 1,743 houses sold in January 2014, the Connecticut Association of Realtors (CAR) said. In the Hartford region, the Greater Hartford Association of Realtors (GHAR) also blamed the weather for a 7 percent fall in January house sales to 534 vs. 574 the same month last year. Statewide, median price for a home sold in January fell 3 percent to $235,000 vs. $242,374 for one sold the same month a year earlier. The Hartford region's median home-sale price plummeted nearly 15 percent, to $187,344 vs. $219,500 a year ago, GHAR said. GamING Fitch: New competition may force CT casinos to restructure debt Despite recent debt restructurings that trimmed their borrowing costs, Connecti- cut's two casinos are still facing significant financial headwinds and they may be forced to renegotiate their debt again, particularly as competition from the Bay State heats up in the years ahead, Fitch Ratings warned last week. Fitch said Mohegan Suns' and Foxwoods' casino operations have not recovered in recent years, and the impending gaming market expansion in Massachusetts could take a $136-million bite out of their combined businesses. Mohegan, which has lower relative debt than Foxwoods and gets less of its busi- ness from Massachusetts, is in a better position to weather the headwinds, Fitch said. The Mohegan Tribal Gaming Authority saved itself $16 million a year in interest by refinancing a portion of its debt in 2013, and its 15-year-old separation agreement with the company that developed and once managed the casino expired in January. That will save MTGA $50 million a year, Fitch said. Mashantucket Pequot Tribal Nation, which operates Foxwoods, is already in default on certain debt tranches, the company noted. Foxwoods also faces a greater impact from the impending Massachusetts gaming market, because nearly one-third of its customers come from the Bay State, com- pared to 18 percent at Mohegan Sun. Assuming a 50 percent decline in business from Massachusetts, the two casinos could lose a combined $136 million from their earnings before interest, taxes, depre- ciation and amortization, Fitch said. utILItIes Spanish utility subsidiary to buy UIL for $3B Orange-based UIL Holdings Corp. said it has agreed to be acquired by Spanish util- ity operator Iberdrola USA for approximately $3 billion. The private Iberdrola and the public UIL would form a new publicly traded entity, which will be led by UIL CEO James Torgerson, who said last week that the deal creates a company with greater scale and financial resources to invest in system reliability and infrastructure. Iberdrola, which has no Connecticut holdings, would own 81.5 percent of the new company. The combined company would have 3.1 million customers across seven geo- graphic markets served by Iberdrola's utility subsidiaries in New York and Maine, and UIL's holdings in southern Connecticut and western Massachusetts. Week IN revIew Back9Network executives and Hartford city officials celebrated the company's rib- bon-cutting last year. Last week the firm announced it suspended operations. P H O T O | C O n T r i b u T e d

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