By Joe Scalzo
e “Speak now or forever hold your peace” portion of a wedding ceremony dates to 1549, when the rst edition of the Book of Common Prayer
was published during the reign of King Edward VI of England.
Outside of movies like “Four Weddings and a Funeral,” asking if anyone present knows of any reason that a couple
Akron’s of ce market emblematic of national woes
By Dan Shingler
Pssst, buddy. Wanna buy a skyline?
You just about could right now. Much of the skyline of downtown Akron, including several of its most prominent high-rise buildings, is for sale.
One, the iconic 28-story, 242,000-square-foot Huntington Tower at the intersection of Main and Mill streets downtown, has been waiting years for a buyer. It went on the market in
early 2019 while Nick Browning, who retired in May, was still running Huntington in Akron.
“ at was almost ve years ago. Isn’t that something? And the tower is still for sale,” Browning said. “And I don’t know what they plan to do with Cascade 3,” he added, referring to the 88,000-square-foot adjacent building, 3 Cascade, which he suspects Huntington will sell as well.
See MARKET on Page 17
should not be joined in holy matrimony is just a formality, something o ciants say out of ritual rather than genuine concern.
But there are exceptions, which is how Eric Gebhardt
found himself inside a mustard-themed hot dog costume five years ago, standing outside a hotel reception room in downtown Cleveland, waiting for a bride and groom to finish the most
heartfelt speeches of their lives just so the officiant could ask the key words, “Does anyone have any objections to this wedding?”
See MASCOTS on Page 16
As a veteran corporate restructuring specialist, Richard Szekelyi usually has plenty of work to do, but his phone has been ringing a bit more frequently these past few months.
“We are de nitely busy,” said Szekelyi, managing director for Cleveland’s Phoenix Management Services and president of the Northern Ohio Chapter of the Turnaround Management Association.
Cedar Point and tacos are among interns’ favorite things about being in Cleveland for the summer.
PAGE 8
The Wolstein family faces the potential loss of the Ernst & Young Tower at Flats East Bank in downtown Cleveland.
PAGE 3
“We were busy throughout the entire cycle of COVID and all that,” he said. “But we are seeing things pick up because what I think is happening in some regard is a lot of people received a ton of money from the government, and that shored a lot of businesses up. But now that money is starting to run out.”
Struggling companies typically seek out restructuring experts
See BANKRUPTCY on Page 18
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e Wolstein family, which dreamed up and developed the Flats East Bank district in downtown Cleveland, is facing the loss of a key piece of that project: the Ernst & Young Tower.
Control of the 18-story o ce building is up for grabs at a Sept. 7 auction, a public sale initiated by a mezzanine lender with $25 million at stake. Court lings show that the landlord is in default on two loans. And public records indicate that the tower’s value has plunged sharply, due in large part to the looming exit of its namesake tenant.
ough remote work and interest-rate hikes are lashing the ofce market, the situation in the Flats is unique. Developer Scott Wolstein died in May 2022 at age 69 after a short battle with aggressive cancer. e Flats East Bank project was inextricably tied to Wolstein — to his net worth, his personal guarantees on debt and his hands-on management approach.
Now Axonic Capital LLC, a New York-based mezzanine lender, is positioning itself to step into the Wolstein family’s shoes.
e upcoming auction, known as a Uniform Commercial Code foreclosure, involves the ownership interests in the limited-liability company that owns the tower. e sale won’t a ect other parts of the Flats East Bank project, including the Aloft Cleveland
Downtown hotel, a gym, a parking garage, restaurants and undeveloped land.
Axonic could bid part or all of what it’s owed to become the tower’s owner. Or another bidder might pop up. Any buyer will be responsible for making payments on the senior debt, a $75 million rst mortgage that was pooled with other commercial loans and used to back bonds purchased by investors.
e auction is being advertised by brokerage JLL, which handled a similar sale of the ownership interests in the nearby Flats at East Bank apartments in January.
In that case, Axonic was also the mezzanine, or secondary, lender — and the only bidder. e company acquired a 100% stake in the entity that owns the riverfront apartment building, taking the Wolstein family out of the picture.
A lawyer for Axonic declined to comment publicly on the approaching auction.
Court records and other documents chronicle the events of the past two years. ey describe a domino e ect, in which Wolstein’s sudden illness and death led to the deterioration of the property, debt defaults and the loss of an anchor tenant.
e court lings are from a pending case in New York Supreme Court. at’s a trial court where Axonic is pursuing full repayment from Iris Wolstein, Scott’s 94-year-old mother, under
a loan guarantee she signed on behalf of a trust as part of a renancing in 2018.
Axonic asserts that Wolstein’s death was a triggering event, an unauthorized transfer of responsibility that gives the lender the right to recoup its money from the guarantor. A lawyer for Iris Wolstein disputes that claim in a letter led as part of the New York court case.
In late 2021, Scott Wolstein’s illness rendered him unable to lead the Wolstein Group, his Cleveland-based real estate company, and to oversee the o ce tower, the letter says. at left Iris Wolstein as the “sole remaining, competent, Class A member of the Wolstein Group.”
As a result, “Iris was compelled to exercise such managerial authority so that the (o ce building) borrower could continue functioning, thereby protecting the lender’s collateral,” wrote Douglas Eppler, a partner at law rm Walter Haver eld in Cleveland.
In December 2022, though, the Wolstein-led ownership group missed deadlines to repay both the mezzanine loan and the senior loan on the o ce tower, according to court records.
en Ernst & Young, the professional services rm that goes by the name EY, announced its plans to leave for a smaller space at the North Point o ce complex at East Ninth Street and Lakeside Avenue, on the other side of downtown. at decision dealt a huge blow to the tower, where EY occupies
nearly 73,000 square feet under a lease that ends in November. e rm’s departure will slash annual revenues at the property by more than $3.6 million and, based on one consultant’s analysis, shave approximately $50 million o the tower’s value. at gure comes from an evaluation conducted by the Henley Group, an advisory rm that focuses on loan workouts. A three-page letter from Henley is included in the New York court records.
In the letter, the consultant raises concerns about the landlord’s inability to access money for improvements to tenant spaces and leasing commissions for brokers.
“Avoiding a market stigma that a building does not have operating cash because a lender is trapping funds . . . is deleterious to both lender and borrower,” a Henley principal wrote to the special servicer, a third-party representative for the senior lender. “Quality tenants will quickly remove the E&Y Tower property from their short list of prospects and simultaneously brokers concerned with not collecting their brokerage fees from a special servicer will stop showing the property, e ectuating a ‘zombie’ landlord scenario.”
Steve Ross, a CBRE vice president who is part of the tower’s leasing team, declined to comment. CBRE is marketing more than 106,000 square feet for lease at the roughly 480,000-square-foot tower, along with naming rights to the building, at 950 Main Ave.
e Henley letter notes that Deloitte, an EY competitor; private-equity rm Riverside; and other tenants have expressed interest in space at the building.
It’s clear that the Wolsteins and both lenders have been negotiating for many months, to no avail. Axonic led its lawsuit over Iris Wolstein’s guarantee in June. e judge in the case has not ruled on the lender’s motion for summary judgment in its favor.
A member of Iris Wolstein’s leadership team at Heritage Development Co., based in Moreland Hills, declined to comment through an attorney. By email, so did Harrison Wolstein, Scott Wolstein’s oldest son and the executor of his estate.
Meanwhile, a lawyer for the Wolsteins is seeking a steep reduction in the tower’s value from the Cuyahoga County Board of Revision, which considers challenges to county valuations of real estate for tax purposes. A complaint led in March asserts that the tower’s market value is only $40 million — not the $95 million the county had on its books for the 2022 tax year.
e Cleveland Metropolitan School District is pushing back, striving to keep the county’s valuation where it is today. Neither side has led an appraisal or supporting documents yet.
e nancial mess is an ignominious chapter for the Flats East Bank, a pioneering project that symbolized Cleveland’s grit as the city tried to claw its way back from the Great Recession.
e Wolstein Group and then-partner Fairmount Properties closed in late 2010 on nancing for the rst phase of the project, including the o ce tower. At the time, participants in the public-private transaction described it as the most complex deal in Northeast Ohio history.
By Bev Shaffer
In today’s fast-paced and ever-evolving corporate landscape, where remote work and hybrid setups have become the norm, fostering meaningful connections among colleagues has become a priority.
Enter the breakfast meeting: a refreshing and innovative way to relax, enjoy, and get to know your coworkers while discussing business.
Morning gatherings o er a unique opportunity for employees to start their day on a positive note, promoting collaboration, creativity, and a stronger sense of team cohesion. Let’s explore how the breakfast meeting may just be the secret ingredient to spark business creativity.
As technology continues to reshape the way we work, remote and hybrid work models have gained popularity for their exibility and convenience. e shift away from the traditional o ce environment has also raised concerns about employee isolation and reduced social interactions.
Maintaining a sense of camaraderie and belonging within the team is crucial for a harmonious and productive work environment. e breakfast meeting presents an excellent solution to bridge this gap, as it encourages a relaxed atmosphere conducive to building meaningful connections.
Breakfast is often hailed as the most important meal of the day, and a well-nourished body fuels a sharp mind. It energizes individuals and sets the tone for their productivity. e time commitment is shorter, the food is quick and easier to eat and, because a breakfast meeting is rst thing in the morning, it won’t disrupt the ow of the workday.
e early hour also can help minimize last-minute cancellations because “something came up” or another meeting ran over. Remember that too early can make people cranky. Too late can push into early lunchtimes. e optimum start time for a breakfast meeting is usually around 8:30 a.m.
Unlike formal boardroom meetings, which often can feel intimidating and rigid, the breakfast meeting allows employees to be themselves and express their thoughts more freely. It’s a time for some light-hearted banter, laughter and building rapport.
e absence of strict hierarchy and the informality of the setting create a safe space for everyone to contribute without fear of judgment, making it easier to discuss new ideas and strategies as the setting allows.
is shared experience helps break down barriers and fosters a more approachable and friendly atmosphere, encouraging open communication, idea sharing
and insightful problem-solving from di erent angles.
Options abound in Northeast Ohio for the ultimate breakfast meeting with colleagues. Here is a list of some breakfast hot spots that just might spark some business creativity:
If you’re getting together to relax, chat and enjoy that perfect cup of co ee, sit and sip at the elegant setting of Savour Co ee in the Key Tower Lobby on Public Square in Cleveland. While you’re there, order some chef-inspired bites to share.
Scratch Restaurant in Independence won’t disappoint. Don’t judge if one of your coworkers orders the Blueberry Moonshine Pudding French Toast or the American Classic (with expertly cooked home fries and pork belly that more-than-happily subs for bacon).
Being mindful of dietary restrictions and choices of everyone is an important part of knowing your team. Why not try the organic scratch all-vegan cuisine at Cleveland Vegan in Lakewood?
Often awarded and featured on the Food Network, Lucky’s Cafe is in the heart of Tremont’s historic district. A unique and charming setting in a renovated house, the atmosphere and food are conversation starters. Don’t skip ordering Heather’s Cocktail, an eye-opener of iced mocha with an extra shot of espresso and a shot of vanilla.
If your team loves eggs benedict, ordering the Craig’s Benedict (with smoked salmon) is a must at e Sleepy Rooster in Chagrin Falls. Some side orders of goetta (German-inspired breakfast sausage that blends the avors and texture of beef, pork, steel cut oats and more) deserve a discussion.
When your meeting is about nourishing the mind, body and soul gather with your team at Ritual Juicery. eir café on Waterloo Road in Cleveland o ers an extensive menu of superfood smoothies and smoothie bowls.
Want more privacy to discuss the business of your business?
Explore the opportunity to reserve “ e Tasting Room” at Spice Catering Co. on Tillman Av-
enue in Cleveland. It’s the perfect place with food to fuel a winning strategy session, a board meeting or executive event and their seasonal, colorful o erings would be a welcome departure from the usual.
Smoked carnitas lettuce wraps? Fried chicken, bourbon and biscuits? Meet your group at e Blue Door Café and Bakery in Cuyahoga Falls. Specials change often and the menu is extensive. Lastly, if you’re just wanting to grab a top-notch egg sandwich or a hand-rolled, kettle-boiled kosher and preservative free bagel, stop in and grab a table at the NY Bagel Deli in Medina.
A strong team is the backbone of any successful organization. e breakfast meeting strengthens team cohesion by fostering a sense of belonging and shared purpose among coworkers. As employees bond over their favorite breakfast dishes and casual conversations, not only does trust and camaraderie build naturally but overall job satisfaction increases as well.
ese meetings provide the opportunity to take on a variety of tasks. You might use this time to get everybody up to speed on where the company stands, or perhaps you want to keep it simple and use the meeting as a way for workers to become more acquainted. If the goal is to get people to mingle, why not have activities that prompt interaction?
In the ever-evolving world of remote work and hybrid setups, the breakfast meeting emerges as a powerful tool to promote business creativity and team cohesion. By creating an atmosphere that encourages openness, collaboration, and genuine connections, organizations can tap into their employees’ full potential and drive innovation.
As teams continue to adapt to new work models, embracing the breakfast meeting may prove to be the secret sauce that keeps businesses thriving in the face of change. So, next time you’re considering ways to enhance team dynamics and spark creativity, don’t underestimate the power of sharing a simple breakfast together.
Dan Shingler
If you’re a big industrial power user and, like most businesses in and around Cleveland and Akron, are a customer of FirstEnergy Corp., you should probably be watching your mail.
If you’re a smaller customer, like, say, a restaurant or retail store, then you probably should be watching your email, and maybe even being a bit careful about how you apply that spam-guard mentality you’ve honed in recent years.
If you don’t, you might miss out on your share of the House Bill 6 refunds.
some money back or are possibly about to.
According to ohioelectricitylitigation.com, the website for the administration of claims and plainti s’ counsels involved in the case, $49 million is being distributed.
e administrators could not be immediately reached to determine what portion of those funds have been distributed so far. But Brakey said some big electricity users among his client base have recently gotten some hefty refunds.
“I’ve seen multiple ve- gure checks,” Brakey said. “Of the checks I’ve seen, I’ve seen at much as $60,000 for a client. But I know that there are checks in excess of that.”
“A lot of these checks were hitting mailboxes last week,” Matt Brakey, owner and head of Brakey Energy in Chagrin Falls, which helps commercial electricity users monitor, manage and optimize their electricity purchases, said Aug. 14. “I haven’t gotten any emails since last Friday, but that doesn’t mean another wave won’t hit again soon.”
e money stems from Ohio’s House Bill 6 debacle, a $60 million bribery scheme aimed at getting more than $1 billion in legislative subsidies for FirstEnergy. Since it came to light in summer 2020, former Ohio House Speaker Larry Householder has been sent to prison, former FirstEnergy CEO Chuck Jones has been red, the company’s board has been reshu ed, and a slew of other people attached to the case have lost their jobs, gone to prison or, in one case, taken their own life in the aftermath of what’s been called the biggest scandal in Ohio history.
But if you were a customer of FirstEnergy, or its Ohio a liates Toledo Edison, Ohio Edison and Cleveland Electric Illuminating, you’ve either recently gotten
Ratepayers getting those big checks receive them in the mail, Brakey said. And, since they tend to be big and sophisticated users of electricity, they know what the checks are for, even if some are still surprised, if not skeptical.
“I’ve gotten calls from clients asking if it’s for real, thinking it’s too good to be true,” Brakey said.
But Brakey advises smaller users to be on the lookout for an email, one that also might look too good to be true and come with a suspicious-sounding email address of rewards@reward.tremendous.com.
ose are likely legit, Brakey said, but if a customer has any doubts, they can go to the ohioelectricitylitigation.com website, which has a contact phone number and email link.
Ignoring the email would likely be tantamount to throwing the money away. And even though those email notices go only to those receiving $250 or less in refunds, some businesses could have multiple accounts. Chain restaurants, for instance, often have multiple accounts.
“For a chain of small establishments, these are potentially going to come in an email,” Brakey said. “We have clients with multiple accounts.”
“I’ve gotten calls from clients asking if it’s for real, thinking it’s too good to be true.”
Matt Brakey, owner and head of Brakey Energy in Chagrin FallsLarry Householder, former speaker of the Ohio House of Representatives, speaks during the 2016 Republican National Convention in Cleveland. Householder was convicted of orchestrating a bribery scheme funded by FirstEnergy. | BLOOMBERG
Downtown is the economic engine for our region, our largest jobs hub and our main tourist attraction. It is the heart of our city. We are a neighborhood of more than 20,000 residents and 100,000 workers. More than 4 million people visit downtown Cleveland each month. Downtown Cleveland historically has been one of the safest neighborhoods in the city. But today, with recent acts of violence and an uptick in crime, many do not feel safe.
Lourenco Goncalves certainly is in the “make no small plans” school of corporate management.
e CEO of Cleveland-Cli s Inc. has never been shy about lining up big deals. Goncalves has used that strategy in the past three years to turn the company, founded in 1847 as a mine operator, into a steel powerhouse. (For good measure, it’s also this continent’s largest maker of iron ore pellets.)
First, in March 2020 came the acquisition of at-rolled carbon, stainless and electrical steel product maker AK Steel. In December that year, the company closed on its purchase of ArcelorMittal USA and subsidiaries, which made Cli s the largest producer of at-rolled steel in North America. ose deals combined cost about $2.5 billion.
Now comes a much larger target: Pittsburgh-based U.S. Steel Corp.
Cli s disclosed Aug. 13 that it had bid about $7.25 billion for U.S. Steel in a deal Goncalves said would create a lower-cost, more innovative steel supplier for manufacturers. (Regulators would look closely at that claim if a deal happens.) U.S. Steel rejected the bid as “unreasonable,” but that’s not dissuading Cli s from continuing its pursuit. Also in the hunt: Esmark, a private, family-owned industrial group that has made a higher, all-cash o er for U.S. Steel, though its status as a steel-coater and operator of steel distributors makes it an odd t, and, potentially, ArcelorMittal, the world’s second-largest steelmaker.
All the interest has pushed U.S. Steel stock higher, so if Cli s really wants to acquire the iconic — though diminished, after several quarters of falling revenue and declining pro ts — steel behemoth, it likely will have to go higher in its o er.
One advantage for Cli s in a potential deal is the support of the United Steel Workers. e union’s endorsement matters because its collective-bargaining agreement with U.S. Steel makes it a party in negotiations, which gives it the right to counter with demands.
Cli s sees upside in U.S. Steel that the company’s recent performance might make hard to see. One key factor, as Reuters noted, is that U.S. Steel “provides steel for renewable energy infrastructure, such as wind turbines, and so stands to bene t from the In ation Reduction Act (IRA), which provides tax credits and other incentives for such projects, and also comes with ‘buy American’ provisions.”
e steel industry itself, which has bene ted from im-
port tari s imposed in 2018 but has struggled with supply chain disruptions and rising in ation, sees the potential for a big boost in domestic demand from the year-old IRA. For instance, U.S. Steel CEO David Burritt said on a July conference call, “We are on the cusp of a once-in-a-generational steel cycle.”
Can Goncalves and Cli s capitalize on that and pull o a U.S. Steel deal, one that creates the country’s most important steel company, with a Cleveland headquarters? Based on recent history, we wouldn’t bet against it.
Cities don’t typically have a lot of drama around the economic development director position.
Cleveland did, as Mayor Justin Bibb’s rst choice for the role didn’t work out and lasted less than a year, leaving a critical city department operating below peak e ciency.
It’s a relief, then, to see the widespread acclaim — in for-pro t and nonpro t circles — for Bibb’s new pick to ll the job: Tom McNair, who has spent more than 13 years leading the nonpro t Ohio City Inc. McNair starts in the administration Sept. 25.
His responsibilities are many. Bibb said McNair “will carry forward the implementation of ARPA-funded initiatives including the Site Readiness for Good Jobs Fund” and will focus on “revitalizing the southeast side and minority contractor business assistance.” He also will support “e orts to revamp economic development incentives, helping small businesses grow” and bolstering “equitable neighborhood development.”
McNair’s history at Ohio City Inc. — on matters ranging from creating the Near West Land Trust to establishing the Ohio City Special Improvement District and working with community partners to lay the groundwork for what will become the 23-acre Irishtown Bend Park — shows he gets things done.
Ohio City is one of Cleveland’s most vibrant neighborhoods. ere are a lot of reasons for that, and McNair’s leadership at Ohio City Inc. is one of them. e city needs a creative, can-do spirit and a focus on results in the economic development department. McNair looks like an excellent choice to foster that.
Our mayor, police chief, county executive, sheri and county prosecutor have taken several steps to nd those who have committed crimes, hold them accountable and restore a sense of safety. We applaud this collaboration, the quick responses to recent criminal activity throughout our city and the holistic approach being taken to address the root of the violence. We commend the Cleveland City Council’s advocacy for bringing more resources to bear to address the problem of violence in our neighborhoods.
e recent news that, at the request of the mayor, the Sheri ’s O ce will be deploying county deputies to patrol downtown in addition to the Ohio State Highway Patrol is welcome. We thank Cuyahoga County Executive Chris Ronayne for this increase in a visible, uniformed presence that will improve the sense of safety for downtown residents, commuters and visitors. Furthermore, the city’s investment in expansions to ShotSpotter, camera access, crime analysts and pay increases for o cers, in addition to expanding after-school and summer youth programs, are designed to create longer-term improvements. We also strongly support Mayor Justin Bibb’s recently introduced RISE (Raising Investment in Safety for Everyone) initiative, a comprehensive plan aimed at reducing crime.
But for those of us who are not law enforcement and who aren’t elected to lead this city, our message is this: is is not the moment to give up. is is the moment to come together, commit to our city and move forward. We each have a role to play to strengthen the downtown environment, advance the economy and enhance the experience.
Safety is multi-dimensional and encompasses more than just law enforcement presence. It includes lighting, public infrastructure, and large- and small-scale experiences that increase foot tra c, vibrancy and a stronger sense of community. For Downtown Cleveland Inc., this work is what we do every day. We understand how these issues intersect and are working tirelessly with all stakeholders to drive investment in our environment and support e orts to strengthen and reimagine downtown for all.
In June, Mayor Bibb, with support from Downtown Cleveland Inc., Cuyahoga County Executive Ronayne, the Greater Cleveland Partnership, Destination Cleveland and Ward 3 Council Member Kerry McCormack, launched a comprehensive plan to Reimagine Downtown Cleveland. e strategies — including investing in infrastructure, technology and lighting — are designed to create noticeable improvements over the next 24 months.
We all have a role in making
According to the Census Bureau, since 1950, Ohio and its major cities have struggled to retain current and attract new residents. At a time when companies are struggling to ll jobs, it is detrimental that Northeast Ohio continues to lose educated workers to competing cities across the U.S.
If we want to revitalize our population, we need to retain our talent.
Biggest Cities USA notes that Cleveland has shrunk by 22.7% since 2000. In recent years, immigration has cut our population loss in half. e report New Americans in Northeast Ohio by New American Economy nds that in 2019, the total population of Northeast Ohio decreased by 0.4%, and without international newcomers, that gure would exceed 0.8%.
If we want to halt our population decline and revitalize our economy, we need to attract more international newcomers, and data show that a wonderful place to start is to increase the number of international students we retain.
also shows that the region saw 1,063 international students graduate with STEM degrees. Furthermore, Immigrants in Ohio, a report by the American Immigration Council, states that international students supported over 9,000 jobs in the state and New American Economy nds that they support nearly 3,000 in Northeast Ohio alone.
In addition to being highly educated members of the workforce, Ohio’s international students are making signi cant contributions to our economy. According to the American Immigration Council, in 2019, they contributed an estimated $858.4 million.
In an economic impact study, New American Economy estimates that if Ohio can raise the percentage of international students studying here by about 1.3%, we would gain 5,751 new jobs and $420 million in additional economic contributions.
Ohio consistently ranks in the top 10 for states welcoming international students. e Migration Policy Institute found that for the 2019-20 academic year, Ohio hosted about 36,000 international students, or 3.3% of the total U.S. international student population. is put Ohio in competition with states like Florida and Pennsylvania. However, less than one-third of these students stay in Ohio after graduation.
A focus on attracting and retaining more international students will undoubtedly bene t the economy and population of Ohio. In “Can Ohio Turn the Tables on Brain Drain?” published by Midstory Media, a nonpro t think tank, Caixia Cui contends that international students represent a valuable in ux of educated minds, o ering a potential solution to counteract Ohio’s loss of highly skilled professionals. e report, New Americans in Northeast Ohio,
Nevertheless, the study New Americans in Northeast Ohio from New American Economy nds that Ohio retains only 31.4% of our international students. Yet, these international students still contributed $858.4 million to Ohio’s economy. Imagine the bene ts we would reap if we retained 40% or even 50% of this population. e more international students that stay in Ohio after graduation, the better for all of us.
To retain this talent, we need to give them more opportunities to build careers. is support can range from employers being open to sponsoring visas or hiring international talent, to partnering with Global Cleveland and local colleges and universities to learn more about this untapped talent pool.
International students and newcomers should be embraced as valued contributors. ey are a crucial part of the solution to Ohio’s many challenges. Without the presence of immigrants and international students residing and studying here, our population decline would be exacerbated, and our economy would su er a signi cant blow.
It is critical that we recognize and harness the power of international students in Northeast Ohio to unlock the region’s full economic potential.
International students in Ohio should be encouraged to stay once they graduate
Jashan Shukla, 20, a junior from Punjab, India, who attends Purdue University, interned at KeyBank doing data analytics.
Where did you live?
“I lived in the Edge, near Playhouse Square in downtown. When I needed to get anywhere, I mostly took Uber there and I ended up spending a lot of money on Uber.”
Would you intern/work in Cleveland again?
“I would say I really like the city. I really like the things that it has to o er and would de nitely come back. Maybe not in the winter, but during the summer.”
What was your favorite thing about interning in Cleveland?
“One of the most enjoyable things was having the lake nearby. Where I live in India, there are no water sources around us. Having a lake nearby and getting to see the sunset was great.”
What was your least favorite thing?
“I would say the biggest downside was I was working primarily remotely. I did go to the o ce like a couple of days during the week, but the majority of my work was from home. I was living in a studio apartment, and it was hard meeting new people and making friends. And even if you met someone, it’s really hard to convert those short interactions into friendships.”
What was the best meal you had/ restaurant you visited while here?
“ e one that does stand out to me is the Nuevo Modern Mexican & Tequila Bar by the Rock and Roll Hall of Fame. It is perfectly located by the lake. It has good Mexican food and there’s always something going on there.”
Brenda Ray, 20, is a junior from Pittsburgh who attends the University of Pittsburgh and interned at Lubrizol.
Where did you live?
“I live downtown and I liked it, but at night it could get a little crazy.”
What was your favorite thing about interning in Cleveland?
“Probably the nature. Honestly, I didn’t realize how much nature was accessible around here. I really liked exploring all the Metroparks, which I did using the Metroparks app; it was a big help. I liked going to all the beaches. e Solstice Steps, in Lakewood, is my favorite spot. I absolutely love it. I’ve been to Edgewater and Mentor Headlands, and the Cuyahoga Valley National Park.”
Would you intern/work in Cleveland again?
“I would, 100%. I’ve really enjoyed it. It’s like a big small city, but there’s so much to do. I was pleasantly surprised. To everyone that says there’s nothing to do in Ohio, I say, ‘ at’s not true.’ ”
What was your least favorite thing?
“It’s windy, and it would be hard to get around without a car.”
What was the best meal you had/ restaurant you visited while here?
“My favorite place to shop and eat was Gallucci’s. e Italian grocery store is so cute. We also went to a Greek festival and ate something I really loved at one of the churches.”
Each summer, thousands of students descend on Northeast Ohio to ll the scores of internships o ered by Fortune 500 companies, smaller private companies and nonpro ts.
e group of 19- to 24-year-olds represents one of the most sought-after demographics.
In an e ort to cement with them a positive impression of the region, the Greater Cleveland Partnership, the Cleveland Talent Alliance and others hosted three events this summer to show o what Cleveland has to o er. e Summer in the Land events drew a total of nearly 1,000 interns at 360 companies, representing students from 155 schools, 34 states and nine countries.
In June, about 700 interns attended the rst outdoor event, held around Playhouse Square. at was followed in July by a beach and music event at Edgewater Park, and then in August with an evening at Pins Mechanical Co. & 16-Bit Bar Arcade on West 25th Street.
Kara Carter, managing director of partnerships at the Greater Cleveland Partnership, said the Summer in the Land events came out of a conversation with a local company.
“ ere was this ‘aha’ moment when we realized that we have thousands of interns in the region every year,” Carter said. e goal was to help ensure that those internships are a successful experience by creating a space for them to meet their peers, get to know them, have fun and see Cleveland through a di erent lens, she added.
e program was helpful for interns working remotely or at large companies, where interns are spread over di erent departments, or for someone at a small company who might be the only person in their age group, Carter said.
Even with those interns working around the region but not Cleveland itself, the Summer in the Land events allowed them to experience the best of downtown.
e events were seen as a success, Carter said, and she said plans are in place for 2024 Summer in the Land.
“We are doing an impressions survey of all of the attendees,” she said. “We want to try and understand a little bit about the events and how this experience either changed or in uenced the perceptions of living and working in Cleveland.”
Crain’s asked the summer interns what they liked and didn’t about their time in Cleveland, and if they would come back. Also: What was the best thing they ate while here?
Kaitlyn Fortuna, 19, is a sophomore from Brunswick who attends the University of Toledo and worked in DevOps at Hyland Software.
Where did you live when you interned?
“I lived with my parents in Brunswick and worked virtually.”
What was your favorite thing about interning in Cleveland?
“I have to say that the Summer in the Land events have been great. I really enjoyed being able to meet other interns, even from my company, because my company is mostly virtual and really helped me make some connections. ... My favorite event was the baseball game. (Interns who attended the Summer in the Land event were given free tickets to a Guardians game). We got to meet people, talk, eat and then go to the game. It was something fun and interactive. And they did win. It was close, but they won.”
What was your least favorite thing?
“Probably not knowing as much of what was going on in the community because by being virtual it was harder to get connected.”
Would you intern/work in Cleveland again?
“I’d love to. And I hope there are more Summer in the Land events.”
What was the best meal you had/ restaurant you visited while here? e tacos at Pins Mechanical Co. and 16-Bit Bar and Arcade on West 25th. (Note: Fortuna was eating tacos at the time of the interview.)
Kingsford Adomako, 23, is a senior from Northern Virginia who attends North Carolina Agricultural and Technical State University and interned for Medtronic Inc. in Independence.
Where did you live?
“I stayed on the campus of Case Western Reserve University with a lot of the other Cleveland interns.”
What was your favorite thing about interning in Cleveland?
“Living on the Case campus was the most fun because you were able to meet people and get to a lot of stu from campus.”
Would you intern/work in Cleveland again?
“I would intern in the city again because I feel like I didn’t get the full experience; I was taking summer classes. I want to come back next summer and use those free tickets to Cedar Point.”
What was your least favorite thing?
“I was the only intern at my internship. Also, my schedule was compact. It was work, go home, chill for an hour, do virtual classes, go to the gym, and then the day’s over.”
What was the best meal you had/ restaurant you visited while here?
“De nitely, the Indian Flame restaurant on Euclid (near) the Case campus. I ate there a lot. A lot.”
When it comes to sports gambling’s e ect on Ohio’s horse racing industry, one thing seems clear through the rst six months of 2023:
e neigh-sayers … er, naysayers were right.
e total handle (i.e., the amount wagered) at Ohio’s seven commercial racetracks from Jan. 1 to June 30 was down more than 14% compared with the like period in 2022, according to gures from the Ohio State Racing Commission (OSRC).
Ohio’s rst-half racing handle in 2023 was $48,802,956, down from $56,882,322 over the like six months in 2022.
Meanwhile, Ohioans wagered nearly $4 billion on sports through the rst six months of 2023, nearly all of it (97%) online or through mobile apps.
e dollar gures come from Ohio’s three thoroughbred racetracks — JACK’s istledown racino in North Randall, the Mahoning Valley Race Course in Youngstown and Belterra Park in Cincinnati — and its four harness (or standardbred) tracks: MGM North eld Park, Dayton Raceway, Miami Valley Raceway in Lebanon and Scioto Downs in Columbus.
If you add Sandusky’s Cedar Downs — Ohio’s only o -track betting parlor — Ohio’s 2023 handle through June 30 was $50,782,802, compared with $58,957,992 in 2022, a 13.9% drop.
at gap isn’t encouraging for racing fans (or racetracks), but PlayOhio managing editor Danny Cross believes it’s too early to draw any long-term conclusions about sports gaming’s e ect on racing, especially as Ohioans were blitzed by advertisements and promotions when sports betting became legal Jan. 1.
“January, in particular, was a super-publicized time,” Cross said. “You had people trying out (gambling) for the rst time during the NFL playo s and then you had the Super Bowl in February, followed
by March Madness. at kind of on-ramp for sports books in Ohio was really perfect.
“It will take more time to fully see how these industries a ect each other or interact.”
Sports betting is legal in more than 30 states — with more on the way — and that market already dwarfs the horse racing industry. Sports gambling in the U.S. produced a handle of $93.2 billion last year, compared with $12.1 billion for horseplayers, according to the American Gaming Association.
Cuyahoga County’s only racino, istledown, saw its racing handle drop 5.7% through the rst six months of 2023, from $7,516,745 to $7,090,145. Much of that money came from simulcast betting, since istledown didn’t begin offering live racing until late April.
istledown’s live racing handle was $697,139 through its rst 10 weeks (April 24-June 30), compared with $787,298 over that same stretch last year.
MGM North eld has taken a bigger hit. e Summit County racino saw its handle drop 14.8% year-over-year, from $17,454,563 over the rst six months of 2022 to $14,871,102 in 2023. North eld offers live racing year-round, and its live handle over the rst six months ($3,184,684) was 18.9% less than that same period in 2022 ($3,926,795).
“What we’re seeing is, racinos
are down in other states as well,” Cross said. “So it might be a larger racino industry situation and not necessarily because of sports betting launching.”
e U.S. pari-mutuel handle on thoroughbred racing was $12.2 billion in 2021, a signi cant drop from its high of $15.2 billion in 2003 but an increase from 2014, when it bottomed out at $10.6 billion, according to the Paulick Report. ( ose numbers are not adjusted for in ation.)
While many horse racing fans believe sports betting is bad for their industry, “opposing the spread of sports betting is fruitless,” wrote Ray Paulick, the report’s author. “It is here and isn’t going away. A marriage between sports and horse betting can and should be in racing’s best interest.”
Cross agreed, noting that Ohio’s seven racinos have also opened sportsbooks — giving them an additional draw for bettors who
come to play the slots or the ponies.
Case in point: Bettors have wagered $13,333,872 at North eld’s retail sportsbook in 2023, while istledown’s sportsbooks had gross receipts of $7,700,876.
“It’s another amenity they can enjoy,” Cross said of retail sportsbooks. “I would not think they (racing and sports betting) would cannibalize each other. ey work in tandem pretty well.”
Still, that sportsbook revenue may be good for racinos, but it doesn’t really help Ohio’s horse racing industry. e OSRC does get 3% of all casino tax revenue to use for race purses and day-to-day operations, per the 2009 law that legalized racinos. But Ohio’s sports betting law does not give any speci c consideration to horse racing, which has shrunk considerably since its peak in 1998, when Ohioans wagered $628,783,858 on racing.
While there is some year-toyear variance — Ohio’s 2021 handle was $128,350,304, compared with $97,439,909 for the COVIDwracked 2020 season — it’s an ominous trend, one that could accelerate thanks to sports betting.
Ohio’s horse industry leaders have been reluctant to talk about sports gambling’s e ects on their sport, a trend that continued with this story.
A spokesperson for Jack Entertainment (which owns istledown) declined to comment, while MGM North eld, the OSRC and the Ohio oroughbred Breeders and Owners (OTBO) did not respond to repeated requests for comment.
But in a May interview with Spectrum News, OTBO executive director Michael Annechino admitted “sports gambling can’t help but have at least a little negative impact” on horse racing.
“If somebody bets $10 on the Browns or the Bengals, that’s $10 less they have to bet on a horse,” he said. “ ere’s only so much money people have to bet.” at comparison is worth watching in the second half of 2023 since Americans bet on the NFL more than any other sport, with 81% of bettors placing an NFL wager, according to a CRG Global report in October. e NBA is second at 54%.
Bottom line, while some Ohioans will continue to bet on the ponies, it’s a safe bet than many others will choose the Broncos or Colts instead.
As Ryan Virtue prepared to introduce the main speaker during a “Coaching With Empathy” workshop on Aug. 15, he pulled out his phone and started typing a few search terms on Google, just to see what the autocomplete feature suggested.
It wasn’t encouraging.
“For ‘sports make me …’ (the) No. 1 (suggestion) was ‘depressed,’” Virtue, a partnership manager for the Positive Coaching Alliance (PCA), told his audience at the Cleveland Metroparks Zoo’s Reinberger Education Center. “For ‘sports give me’? e rst option was ‘anxiety.’ And ‘my coach makes me’? e rst two were ‘want to quit’ and ‘feel bad.’”
Virtue wasn’t trying to vilify coaches — after all, kids probably aren’t going to search “My coach makes me happy,” even if they feel that way — but he did want to remind them of the importance of their roles in student-athletes’ lives, and how that role isn’t always positive.
“All of you will have a massive in uence on the type of experience these kids have — and it needs to be positive,” Virtue said. “ is (playing sports) is an enjoyable experience and, more importantly, it’s a developmental experience for kids.”
About 30 middle school and high school coaches from around the region attended the free workshop, which was part of the Greater Cleveland Sports Commission’s (GCSC) Cleveland Power of Sport Summit series leading up to the 2024 NCAA Women’s Final Four. Last week’s event focused on mental health issues impacting middle school and high school student-athletes and how coaches can support them. Mental health has become an important issue among athletes in recent years, thanks to the openness of athletes such as Cavs forward Kevin Love and Olympic gymnast Simone Biles. at awareness has trickled down to lower levels, and coaches need to understand how they can help young athletes with their mental and emotional health, said Vincent Caringi, chief medical o cer at e Centers and team psychiatrist for the Cleveland Browns.
former Chagrin Falls girls soccer coach Pamela Malone, who won 398 games over three decades with the Tigers, including two state championships.
Malone said PCA’s model is built around the “double-goal” coach, which involves striving to win while also teaching life lessons.
“I don’t have 398 victories just because I wanted to have a good time,” she said. “But I also wanted to teach life lessons. We want to make athletes into better people, because in the end that makes better people.”
Malone was rst exposed to PCA in 2016 at the United Soccer Coaches Convention, where she was blown away by a presentation from PCA head trainer Kelly Kratz.
“I was like, ‘Holy cow, this is really good stu ,’” she said.
PCA’s program helped Malone reevaluate some of her coaching techniques, which led to even more team success. In the fall of 2016, Chagrin Falls advanced to the state championship game, then made the state nal four in both 2017 and 2019.
Os, Malone said. But that’s not what players remember from their athletic experiences, she said.
To illustrate that point, she had all the coaches in the room grab three Post-It notes and write down what they remember from their coaches. ey then separated those notes into two categories in the front of the room:
◗ X&Os (i.e. strategies, skills, offense and defense); and
◗ Life skills (character, life lessons, emotions).
ter lessons and how they made you feel.
“It goes back to that quote from Maya Angelou. People won’t remember what you did. ey won’t remember what you said. But they will always remember how you made them feel.”
Perspective: Identify their emotions and behaviors, rather than trying to x the problem.
“Listen to understand,” she said. “We’re not therapists. We’re not going to x it. We want to listen to things from their perspective and try to understand.”
◗ Align: Believe that this is their reality.
“Don’t say, ‘Oh, that’s nothing. Oh my gosh, I should tell you what happened to me when I was going through puberty,’” she said. “No, this is their reality.”
◗ Connect: Con rm what you’ve heard from them, and care about what they’re going through.
“What I hear is that you are (blank) because of (blank),” she said. “So there’s no miscommunication.”
◗ ink: Re ect on what happened and recognize whether you handled the situation well.
“Coaches can and really need to be an anchor for a kid,” Caringi said. “Being a compassionate listener is more important than giving advice. Respectful curiosity goes farther than what you tell them.”
Last week’s main speaker was
In 2021, the Tigers won their second state title.
“I had a lot of success before, but, man, when I adopted the PCA philosophy, it just took o ,” she said. “It was a lot about relationships.”
Too many coaches — especially young kids — focus on Xs and
“What do you notice there?” Malone said, pointing to the dozens of notes under life skills. “What do you remember about your former coaches? Do you remember that Syracuse back-door o ense in basketball? Do you remember ‘squash a bug, hips forward, arms out’ (baseball swing)? No, you remember the life skills, the charac-
While even the best coaches will fail at times — Malone cringes when she thinks of times when she criticized an athlete publicly, or failed to understand how othe- eld concerns (school testing, issues at home, a bad breakup) might be contributing to a bad practice — but she believes PCA’s program can minimize those mistakes, particularly when it comes to addressing an athlete’s mental and emotional health.
To that end, she said empathetic coaches should rely on the acronym PACT whenever one of their athletes is struggling:
“ is is on you,” she told the coaches. “Did I do the right thing there?”
Malone said there are at least ve situations during her coaching career where she looks back and thinks, “I would have handled that di erently.” But she also knows she’s had her share of successes — and not just on the scoreboard.
Her goal with PCA is to help other coaches feel that way, too.
“It’s a big job to be a coach,” she said. “You in uence lives for a long time.”
For more information on PCA, visit PositiveCoach.org.
“Coaches can and really need to be an anchor for a kid. Being a compassionate listener is more important than giving advice. Respectful curiosity goes farther than what you tell them.”
Vincent Caringi, chief medical of cer at The Centers and team psychiatrist for the Cleveland Browns
By Bev Shaffer
Most careers in the food industry are a result of the twists and turns that life throws our way, and for Ann LoParo (known to friends and family as “Annie”), her career path to becoming a pastry chef and culinary instructor was no different.
LoParo started her education at Kent State University, wanting to become a teacher, but her attention-de cit disorder issues forced her to switch paths and nish with a bachelor’s degree in ne arts.
For the better part of a decade after graduation, she worked as a social worker at the Cuyahoga County Department of Children and Family Services, dedicated to supporting children at risk of abuse and neglect. But the creative call of baking beckoned her heart.
In 2006, LoParo made a bold decision. She left behind her social work career to pursue her lifelong passion for pastry.
She enrolled at Johnson & Wales University in Charlotte, North Carolina, where she acquired an associate degree in baking and pastry
arts, a pivot that changed the course of her life. Baking now wasn’t just a hobby; it was a means of expression, stress relief and a way to indulge her own sweet tooth.
In her newfound journey, in August 2017, she opened her bakery, Annie’s Signature Sweets.
ing featured in two national maga zines), requests began to arrive from all over the world for virtual baking classes. Pivoting once again, she was able to adapt and teach her baking classes via Zoom, connecting with aspiring bakers worldwide.
LoParo still teaches a few virtual classes, sending recipes, ingredient and equipment lists in advance to each participant and showing the methods of prepara tion as the class progress es.
cranberries and more).
I asked LoParo what her top two favorite classes were to teach: “Cinnamon rolls and cake rolls class (especially chocolate cake rolls),” she said.
And her ve most popular classes? ere was little hesitation as she rattled o the top ve, “French macaroons, bagels, focaccia, cake rolls and ourless torte (which is gluten-free).”
Circling back to her ADD, LoParo mentioned that “baking actually helps me keep focused and calm; it’s kind of a superpower.”
Annie’s Signature Sweets takes her demonstration-only classes on the road at seven Northeast Ohio libraries: Parma Snow, Avon, Fairview Park, Rocky River, Hudson, Strongsville and Orange. LoParo also is available for private threehour classes for eight people.
e bakery wasn’t just about regular desserts; it was about reimagining classics with a twist. Her creations were fresh, fun and unforgettable. But the journey was no cake walk, as the COVID-19 pandemic forced her to close her location, and it was time once again for a fresh start.
Her new venture, driven by a passion and purpose, was teaching baking classes. Classes began in February 2018 and were an instant success. LoParo shared her 17 years of pastry chef experience with each new in-person class.
During the pandemic (after be-
On Aug. 27, LoParo will begin another journey as Annie’s Signa ture Sweets opens at its new bricks-and-mortar location, 1433 W. Bagley Road in Berea, with an open house that day from noon to 3 p.m. e location will focus on classes, which will begin in Sep tember; registration is available on the website.
Her in-person classes at her new shop in Berea will follow the same format as her previously successful in-person classes. Her interactive classes are usually limited to 10 to 12 people. For several classes, such as her cinna-
mon roll class, she instructs everyone as they create a base recipe, then they can adapt the nal version to suit their personal tastes (e.g., pecans or walnuts,
Over 800 classes have been taught in 5½ years at Annie’s Signature Sweets.
e bakery side of the business has taken a backseat to her true passion: teaching.
LoParo loves that every person has a di erent story, a story that explains why they’re in class and what intimidates them about baking. Her overarching class goals are to make baking less stressful and more fun, and to have participants not worry too much about what’s next … just enjoy that mixing, stirring and baking moments of joy.
Over 800 classes have been taught in 5½ years at Annie’s Signature Sweets.
Rachel Abbey McCafferty
Walsh University in North Canton this summer added a new educational o ering: an MBA with a specialization in School District Leadership.
“Replenishing the leadership pipeline takes time,” said Mike Dunphy, vice president for academic a airs at Walsh, in a news release. “With the imminent turnover of superintendents and other school district executives in the next ve to ten years, we’re averting a potential crisis by being intentional and creating a professional development opportunity today for our leaders of tomorrow.”
e program is a hybrid one, combining in-person and online components, and it’s expected to take participants two years to complete, going part time. It was designed by James Falter, director of graduate programs for the university’s DeVille School of Business.
e release noted that Walsh worked with the Stark County Educational Service Center to create the new program, and Falter said the educational service center and the Jackson Local Schools had both reached out with interest in creating a curriculum that focused on their needs for future leaders. Walsh had o ered some specialized MBA programs in the past, in areas like marketing and analytics, but those were based on perceived market needs. is program was designed with direct employer feedback.
“ at’s really what was di erent is that, rather than us forcing a curriculum onto the public, it really was a partnership, where they described what they wanted to do,” Falter said.
Christopher DiLoreto, superintendent of the Jackson Local Schools, went through an MBA program himself a few years back and, though it was valuable, he realized it was sometimes a challenge to apply those lessons to the K-12 setting. at experience, coupled with e orts to proactively attract, retain and develop future leaders, made him think a more specialized MBA would be a good
experience for potential K-12 administrators.
Baby Boomers are retiring and leaving the eld, DiLoreto said, and there just aren’t as many people in the next generation to ll those needs. Plus, superintendents haven’t been staying in the role for many years.
“And, on top of that, the job itself has become really challenging,” he said.
Ultimately, Walsh’s new program is designed for succession planning, Falter said, helping districts promote potential leaders from within. e program brings together Walsh’s MBA content with its graduate education program. Additionally, there’s a co-op component, Falter said, and the curriculum overall aims to focus on education-related examples and case studies, instead of the more traditional corporate ones used in many MBAs. And graduates will not only earn their MBA, but also a certi cate that allows them to serve as a school district business manager or treasurer in the state.
Falter said the superintendents Walsh talked to were interested in that being part of the program, as it would give future superintendents the nancial skills they need to lead.
e program is open to anyone, but participants have to be willing to make the drive for the in-person portions on ursdays. And they need some sort of recommendation or show of support from their school district, Falter said.
Conversations around potential curricula began in the fall of last year, and classes started in July.
Falter said he could see Walsh adding other MBA concentrations to meet direct employer needs like this in the future, in areas like health care or manufacturing management. It’s a “competitive marketplace,” he said, and it benets colleges and universities to be “nimble and entrepreneurial.”
DiLoreto said the Jackson schools had reached out to other local universities as well, with the idea for such a specialized MBA, but it was Walsh, particularly Falter, that was open to taking on the challenge.
A recently led shareholder lawsuit accuses Cleveland’s KeyCorp (NYSE: KEY) and its top executives of misleading investors about KeyBank’s liquidity for the past few years, contributing to a large sell-o of the bank’s stock and a signi cant decrease in the value of those securities that damaged investors, according to the complaint.
e suit was led on Aug. 4 in the U.S. District Court of the Northern District of Ohio by Menachem Gurevitch, a Key shareholder in Kings County, New York.
Named defendants in the suit include KeyCorp CEO Christopher Gorman, former CEO Beth Mooney, current chief nancial o cer Clark Khayat and former CFO Donald Kimble.
e suit alleges that over the past three years, the aforementioned executives made misleading statements — or otherwise failed to disclose details — about the bank’s actual situations with respect to liquidity and net interest incomes (NII). NII is calculated as the di erence between interest income received on earning assets (like loans and securities) plus loan-related fee income and interest expense paid on deposits and borrowings.
“Key has repeatedly downplayed concerns regarding its liquidity while touting the e ectiveness of its long-term liquidity strategy,” according to the complaint. “For example, the Company has repeatedly assured investors that its strong core deposit base, in conjunction (with) other funds, supports the Company’s liquidity risk management strategy, and that the Company’s liquid asset portfolio, inter alia, exceeds the estimated amount needed to
manage through an adverse liquidity event.”
Speci cally, the suit accuses the company of not just downplaying its liquidity but also overstating its projected NII for Q2 and full-year 2023 as well as NII drivers.
e suit notes how Key in early March downwardly revised FY 2023 guidance for NII as it submitted public lings related to the RBC Capital Markets Financial Institutions Conference. In 2022, the company had predicted that NII would grow between 6% to 9% in FY 2023 over 2022 levels, but it revised that to a range of 1% to 4% ahead of the RBC conference.
Key attributed this negatively revised guidance to “Deposit Beta and Funding Costs,” explaining that “(marginal) funding costs are increasing with rising market interest rates, and are expected to weigh on (NII),” according to the complaint.
Key’s stock decreased 3.31% on that news, closing at a per share price of $17.55 on March 7. is was all followed by the failures of nancial institutions Silvergate Bank, Silicon Valley Bank and Signature Bank, which raised broad concerns about liquidity at other large regional banks, including Key. Bank stocks were downgraded across the industry.
Odeon Capital Group downgraded Key’s stock from “buy” to “hold,” and BofA Global Research cut its price target on Key stock from $20 to $17, according to the shareholder lawsuit.
On the heels of that news, Key’s stock dropped by 41% to a closing price of $11.38 per share on March 13.
On June 12, the complaint continues, at the Morgan Stanley U.S. Financials, Payments, & CRE
Conference, Khayat disclosed that Key projected Q2 2023 to be softer than anticipated “based on funding mix and deposit cost pressures.” At the same conference, Gorman noted that customers were demanding higher interest rates on deposits and that banks of Key’s size were likely facing higher capital and liquidity requirements.
Following that news, Key’s stock took yet another hit, falling 4.3% to close at a value of $10.22 per share on June 12.
“As a result of (Key’s) wrongful acts and omissions, and the precipitous decline in the market value of the Company’s securities, Plainti and other Class members have su ered signicant losses and damages,” the lawsuit argues.
On Aug. 4, when the lawsuit was led, Key’s stock was trading at $11.92 per share. e stock closed trading Aug. 14 at $11.02 per share.
Gurevitch’s suit aims to certify a class of plainti s who owned Key stock between Feb. 27, 2020, and June 9, 2023.
Since February 2020, the greatest value reached by Key’s stock was $25.07 per share, which it hit in February 2022. at means the stock has lost about 56% of its value since that high point.
A spokeswoman for Key said the company does not comment on pending litigation. Court lings do not currently list defense counsel.
Gurevitch and the proposed plainti class are being represented by lawyers from the o ces of Pomerantz LLP of New York and Dittmer, Wagoner & Steele of Gahanna, Ohio.
Key, the largest bank in Northeast Ohio, reported approximately $195 billion in total assets as of June 30.
Bankrupt electric-vehicle maker Lordstown Motors Corp. has agreed to pay $40 million to settle a Karma Automotive LLC lawsuit alleging that the company lifted designs and technology to develop its agship Endurance truck.
e settlement disclosed in bankruptcy court papers Aug. 15 averts an upcoming trial that threatened to derail Lordstown’s e orts to sell its business in Chapter 11.
e deal is for substantially less than the more than $900 million Karma had been seeking, but it ensures Karma is compensated despite Lordstown’s bankruptcy. Lordstown said that while it still
From Page 6
We know, however, that the challenges we face and the fears that have been sparked by recent crimes need to be addressed today.
To help deter criminal activity, our Neighborhood Safety Specialists provide a uniformed, unarmed presence. ey are trained to verbally de-escalate situations where an individual may be in crisis. We recently hired additional Clean and Safe Ambassadors, who can be spotted in bright blue and yellow uniforms walking and biking throughout downtown, and expanded the weekend hours of Ambassador and Safety Specialist deployments to grow the uniformed presence downtown.
We also have grown our partnership with the Cleveland Police through collaborative work on crisis intervention and have increased coordination with social service providers, including transportation to area treatment facilities. Downtown Cleveland Inc. will continue to provide outreach and support to local business owners and employees, in addition to convening downtown stakeholders and nonpro ts on comprehensive, long-term solutions.
We are determined to push downtown to reach its full potential – a clean, safe, welcoming and vibrant 24/7 global city that weaves districts and surrounding neighborhoods into a seamless urban fabric. But we can’t do it alone. Our business community, partners in the nonpro t world, elected o cials and civic leaders, downtown residents, and employees can all be a part of creating signi cant change in downtown Cleveland.
At the most basic level, if you see something, say something.
Call 216-621-6000 for all Clean and Safe Ambassador requests, including safety escorts, services for the unsheltered, motorist assists, gra ti removal and all cleanliness needs. Call 911 for all criminal activity, regardless whether the perpetrator remains at the location and the number of incidents. It’s important that we document the activity downtown, as it helps us advocate for additional resources.
disputes Karma’s allegations, a settlement was necessary to avert a costly and time-consuming jury trial that posed a “signi cant impediment” to its sale process and risked scaring o potential bidders.
e deal was struck weeks after Judge Mary Walrath ruled Lordstown would have to go to trial over Karma’s allegations despite the fact that the company recently led Chapter 11, an action that usually pauses litigation. e outcome of a trial was expected to determine which company owns assets related to the Endurance, meaning the dispute could have determined what
potential bidders could actually acquire from Lordstown.
e $40 million settlement must be approved by Walrath. e settlement amount includes a $5 million royalty payment, according to court documents.
Lordstown led Chapter 11 in June amid a separate, costly dispute with iPhone maker Foxconn Technology Group over a deal to make pickup trucks for Lordstown at an assembly plant in Ohio.
e bankruptcy is Lordstown Motors Corp., 23-10831, US Bankruptcy Court for the District of Delaware.
— Bloomberg
At MetroHealth, we believe every person in our community deserves access to high-quality care. With vision and innovation, our President and CEO, Dr. Airica Steed—alongside the more than 8,000 dedicated providers, specialists, nurses, and sta who call MetroHealth home—will shape a future dedicated to a healthier community.
Dr. Airica Steed, President & CEO MetroHealth
IS ABOUT MORE THAN MEDICINE.
It’s about hope, equity, and a healthier community.Lordstown Motors’ Endurance truck is displayed at a press event. | BLOOMBERG
en …
“ ree Four! Ahhhhhh, ahhhhhh, ahhhhhh …”
As the Presidents of the United States of America started singing, “All this energy callin’ me ...,” the three hot dogs who have gone from afterthought to the city’s most sought-after wedding crashers — Ketchup, Mustard and Onion — ran down the aisle, interrupting what, in Gebhardt’s words, is supposed to be a top three moment of people’s lives.
e crowd’s reaction? ey relished it.
“Everyone was standing up and in shock,” said Gebhardt, who had been hired by the bride and groom. “But when they saw us, they were all smiles, from ear to ear.”
ey’re not the only ones.
Over the past 18 years, the Cleveland Guardians’ once-minor characters have become a major part of the Progressive Field experience.
ey have their own social media accounts, their own T-shirts (which have become big sellers at the team shop) and their own fan bases, ones that often match, or exceed, the popularity of Slider, a 2008 inductee in the Mascot Hall of Fame.
But, more than that, they’ve surprisingly become part of the community’s fabric, appearing at between 100 and 150 community events each year, from birthday parties to store openings to school events to auto shows to food (and toy) drives to charity races to, yes, weddings — although they usually crash the reception, not the ceremony. ( ey cost $600 per 30 minutes, in case you’re interested.)
ey were even featured in this year’s Rock ‘N’ Blast reworks shows at Progressive Field, with Mustard making a cameo appearance on the Beatles’ “Sgt. Pepper” album cover (he was next to the wax gure of Sonny Liston) and all three hot dogs dancing to Beyonce’s “Single Ladies.”
“ ey have de nitely grown a lot since they rst started, to the point where they’ve taken on a life of their own,” said Kelly Dredge, the Guardians’ director of live experience. “At our heart at Progressive Field, we try to create a family-friendly, wholesome, approachable, fun environment where people can come and enjoy themselves, and all of those things are who the hot dogs are.
“We’re so lucky to have them.”
e hot dogs arrived in Cleveland in 2005 when the Indians decided to follow the lead of many other MLB teams and add an ingame mascot race. Hot dogs were a natural choice, considering the city’s tie to Bertman’s Ballpark Mustard. ( e club’s Dollar Dog promotion, which started two years later, also gave them a boost).
e fth inning Hot Dog Derby quickly became a hit, and the club added facial features to give each hot dog its own personality. But until Gebhardt joined the Indians’ promotions team in 2013, the hot dogs still played a supporting role
at Progressive Field, appearing for about 20-30 minutes a game, over three half-innings.
Two things changed that.
First, Gebhardt took over the mascot program and gave the hot dogs their own social media accounts, allowing the club to showcase their best races/stunts/interactions and build their brand. ( e hot dogs now have nearly 21,000 followers on Twitter and more than 16,000 on Instagram.) As their popularity grew, so did their in-game exposure. e hot dogs now appear somewhere in the stadium for seven of the nine innings, “which is way more than other teams do,” Gephardt said.
“Obviously, the heat can be a lot at times, but you almost don’t feel it until you’re done,” he said. “It’s almost like a runner’s high. You’re out there sweating, but you’re creating memories.”
e second thing was ukier.
Soon after Gebhardt started performing as Mustard, he spotted the Guardians’ sideline reporter, Andre Knott, doing a live pregame spot on then-Sports Time Ohio. He walked over, put his arm around Knott and rubbed his bald head.
“I interjected myself into his live camera feed,” Gebhardt said, “and he kind of pushed back and was yelling at me.”
e moment was totally unplanned. But, like the rst time Moe Howard poked Larry Fine in the eyes, it was (condi)meant to be.
“He was just a condiment willing to mess with me on air,” said Knott, who now works for Bally Sports Great Lakes. “And if you know me, I like busting people’s balls. And it took balls to start messing with me like he did.”
Added Gephardt, “Ever so slightly, it turned into this thing.”
Gephardt and Knott started meeting before games to come up with bits — Knott admits he knows when something is about to happen about 95% of the time, which is the baseball equivalent of nding out there’s no Tooth Fairy — and the fans ate it up. Mustard often messes with Knott on-air, hitting him with pies, dumping packets of mustard on his head, dangling donuts behind his ear or mimicking his gestures on camera. Knott, in turn, isn’t afraid to get physical, pushing Mustard o chairs, dumping water on him and hitting him with a bat or a shovel as he walks by the dugout. Knott also never calls him Mustard.
“I’m that ‘Yellow ing’ or that ‘Yellow Guy,’” Gephardt said.
e rivalry has become so famous, Knott will get heckled by Mustard fans (or cheered by Ketchup/Onion lovers) at Progressive Field, at visiting ballparks and even out in public. One family even dressed up as the hot dogs, while the dad dressed as Andre Knott.
“ e funny thing is, we’re friends,” Knott said of Gephardt. “I think Eric is brilliant. He’s the future of WWE (wrestling).”
e other funny thing? Knott actually likes mustard — although he prefers Ballpark Mustard to yellow mustard — and Gephardt hates it.
“I might have had it once or twice in my life at McDonald’s or Burger King, but I don’t like the taste,” Gephardt said, laughing. “I don’t like it all.”
Pranks and social media posts aside, the condiments’ popularity is still tied to the Hot Dog Derby, which Gephardt leveraged brilliantly in 2022.
Before the season started, he decided Mustard would lose every race. Even better, his 0-50 start prompted the Guardians to send him down to the Class-A Lake County Captains. After winning his rst race at Classic Park, he was recalled by the Guardians and appeared to snap his MLB losing streak on Aug. 19. But that victory was overturned by replay, and it wasn’t until the nal homestand that he broke through for his rst win. (Onion won the season title, edging Ketchup 40-39.)
“ at was such a fun storyline,” Dredge said. “It blew up on social media and it got a lot of play in the media. ere was this feeling that came over the ballpark as soon as the hot dog race started. is anticipation like, ‘Will Mustard win this time?’”
e interest went beyond the ballpark. Mustard’s losing streak got covered by SportsCenter, by newscasts in places like California,
“ e core group of mascots that we’ve had over the last ve or six years are very, very passionate about being in costume,” he said. “Every mascot you come in contact with, that’s their creative outlet. It’s like you’re performing a play every day in front of 18,000 to 35,000 people. Each interaction, you’re able to be creative in your own way. And you’re creating memories for fans of all ages, from kids to grandmas and grandpas.”
e hot dogs’ success puts pressure on the promotional team to top itself, and Gephardt admitted he’s constantly trying to think up new ways to connect with fans, particularly during the o season. His best idea of 2023? He sent out 232 consecutive tweets from their Twitter account, with the rst word of each tweet matching the lyrics of the Backstreet Boys’ song “I Want It at Way,” only in reverse. (“I was trying to think of a song that was appropriate, with no swearing, and kind of popular,” Gebhardt said.)
His last tweet came on May 23: “Yeah, we did it!!!!!! Hey @backstreetboys fans, check out the rst word of our last 232 tweets dating back to November 6th! ere might be something special waiting for you!”
As a sample, here were the last seven posts:
“You can’t make this up.”
“Are you ready for Kids Sunday Fun Day?”
“My, oh my! e belt has changed buns once again!”
“Fire it up, Onion!”
“ e winner by a purse!”
“One day we’re all gonna look back and realize how great it was to be alive during the Cleveland Guardians Hot Dog Derby reign.”
“Desire to be like @JimmyButler is at an all time high!”
(“You are my re. e one desire.”)
Iowa and Texas, and even showed up on a few media outlets outside the United States.
“ e whole plan all along was for him to win on fan appreciation night,” Gephardt said. “And when he nally did, it got picked up again around the United States. You’d see ‘Mustard nally won’ on SportsCenter and they were even talking about it in Iowa again.
“It must have been a slow news day in Iowa.”
Consequently, Mustard has emerged as the most popular hot dog — “Team Mustard” T-shirts are the Guardians’ fth-best-selling men’s T-shirt this calendar year, “which is just a crazy sentence to even say,” Gephardt said — but Ketchup and Onion have their share of fans. Ketchup is known as a world-class cheater, while Onion (who isn’t above swinging her purse to gain an edge in the Derby) is a favorite of Guardians’ female fans, including Knott’s daughter.
Unlike Mustard, the Guardians use a rotating cast to play Ketchup and Onion, but regardless of who is wearing the costumes, one thing remains the same.
ey’re not rivals. ey’re teammates.
“It was a fun experience, but I also never want to hear that song again,” Gephardt said. “I was very nervous I was going to miss a day, so I constantly was checking the lyrics, making sure I’m at the right lyric. And some words are very difcult to start o a tweet with.” at level of dedication oors Knott, who believes Gephardt has elevated the hot dogs to the level of baseball’s greatest mascots, like the Phillie Phanatic.
“It just gives families in Northeast Ohio another element of fun when they come to the ballpark,” he said. “ ey may not be able to get an autograph with Jose Ramirez. ey may not get a picture with Shane Bieber. But if you come down early, you can get a picture from Mustard. And you may see Andre and Mustard ght. Or you may see Andre and Mustard tell each other they stink.” at’s not just fun for families. It’s fun for Knott, too.
“It’s been one of the best perks of my job,” he said. “Nobody wants to hear me complain — I’m living the dream — but getting through 162 games can be tiring at times. Little things like getting to mess with the mascot every once in a while, that makes the dog days easier.
Knott laughed, then added, “No pun intended.”
Add to that the 195,000-squarefoot Akron City Centre building that recently went on the market, and FirstEnergy’s 19-story headquarters, also on Main Street, which it leases but intends to buy to facilitate its move to West Akron.
Go to LoopNet.com or one of the other real estate tracking sites and search for o ce buildings for sale in and around downtown Akron, and you’ll see a string of smaller buildings, though some still of signi cant size, all on the market. ey dot Main Street like a strand of pearls missing only a few beads.
Akron’s o ce market, in the wake of years of Main Street construction, COVID restrictions and a work-from-home trend that’s still having a hangover, like it is in much of the rest of the nation, is a hot and too-empty mess.
“It’s a disaster,” said Stu Lichter. Lichter might know better than anyone how the market is doing, in both Akron and the nation. He’s one of the largest landlords in the U.S.; his company, Industrial Realty Group, has more than 100 million square feet of space in its national portfolio.
In Akron, Lichter turned Goodyear’s sprawling, 1.4 millionsquare-foot former headquarters complex on East Market Street, just southeast of downtown, into the East End mixed-use development. With its size and mix of residences, o ces and retail businesses, it’s nearly a second downtown for the city.
East End’s o ce space there is only a few years old at the most, all modern, Class A space. Some of it has only recently been completed and is not occupied.
But he can’t lease it, so Lichter’s going to tear out a good portion of it and convert it into residential spaces.
“We’re converting areas we didn’t plan to convert because residential is doing better than o ce,” Lichter said. “We keep building more apartments because we keep renting them. . . .I don’t see anything changing.”
Lichter said he’s looking at plans that would convert 50,000 to 100,000 square feet of East End o ce space to apartments, which would complement the 66 lofts and 106 apartments already at the site. He said those are all rented and there is demand for more.
Lichter’s rolling with punches that he and others in the o ce real estate market say have been coming fast and hard as of late, staggering much of the industry. Akron’s feeling it as much as anyone, they say, but it’s only emblematic of a national crisis.
“A national disaster, that’s what it is,” Lichter said. “And I’m not sure how big the shoe is that’s going to drop, because I don’t know enough to know the extent of the banks’ exposure on o ce building loans. But I have some concerns that when this comes to light, there will be other banks that are overexposed. . . .Most of the o ce buildings in the country are underwater, and if they
have any leverage are worth less than their debt. I don’t think the impact of that has been fully felt yet.”
Lichter and others describe a market in chaos. Banks are looking at commercial real estate loans for buildings that are producing less revenue as companies downsize or just move out of o ce space altogether. Many tenants can’t determine how much space they even need, as they struggle to gure out whether they should let their people work from home full-time, parttime or have them fully return to the o ce — or whether they even can make such demands.
Rents are going down while vacancies go up, and even the rising vacancies bankers see likely don’t tell the whole story, according to Browning.
ere are what’s become known as “shadow vacancies” waiting in the wings, he said, and they don’t bode well for the nearterm health of the market. “ e vacancies don’t sound as high because of shadow vacancies,” which are cases in which “people are making their lease payments for space that they’re not occupying,” Browning said.
at happens when a tenant nds itself with one foot on the proverbial boat and the other on the dock, while the boat can’t decide if it’s coming or going. ey sent their people home during the pandemic and either have not called or can’t call them back to the o ce. But they aren’t convinced the situation is permanent, so for now they just keep making lease payments.
Everyone knows, though, that those tenants aren’t going to do that forever. Soon, they’ll either abandon their leases or nd a way to get their people back to the o ce. But that might be a trillion-dollar national question.
ose same conditions are creating shorter leases or even tenants on month-to-month terms with landlords who must choose between shorter terms or no lease payments at all. at then creates a bad situation for both lenders and borrowers, Browning said, because banks do not like to make loans that extend beyond the terms of the leases that will service that debt.
lumbus, Cincinnati or Detroit, just go down the line of its peers, or even some big cities like Atlanta,” Pacella said.
Another source of hope might be that, well, this is Akron. e city has come back from many challenges in the past, from the loss of several major industries over the course of its history to the more recent redevelopment of some major downtown buildings, like the Bowery Project, into big apartment buildings.
Browning, for one, is optimistic.
“I’m very hopeful,” he said. “We haven’t seen redevelopment downtown since the Bowery ( nished in 2018), and that’s a great springboard. . . .All the resources of Akron, the port authority, the banks, the city and developers made it happen. It will happen again with those same thought leaders. . . .It has to.”
which are still in demand.
“We can look at the empty o ce buildings and run them through a lter. If they have the potential to be Class A o ce space, you need to preserve that o ce space,” Taylor said. “Because eventually, the pendulum is going to swing the other way and we’re going to need it again.”
In the meantime, Taylor, who like Lichter said he has had virtually no trouble renting apartments downtown, is interested in doing more residential conversions. He and others believe that more residences downtown will support existing retail establishments and then make downtown more attractive to o ce tenants.
“If you’re a banker you look at it and you say, ‘You’ve got a building of 100,000 square feet and you have 10 tenants, and their leases are all month-to-month, that’s a risk,’” Browning said in a hypothetical example. “From a banking standpoint, it’s di cult to have three- or ve-year (loan) terms if all your leases are shorter-term than that.”
“ e banks are tightening their belts and requiring more and more on (re nancings),” said Nichole Booker, senior vice president of SVN Summit Commercial Real Estate Advisors in Akron. “So you have o ces with decreased demand, increased vacancy and lenders are calling loans.”
Borrowers in such situations have few, if any, places to turn.
“ en, you need to re nance, but no one wants to re nance an o ce building right now,” said Alec Pacella, president of NAI Pleasant Valley real estate, which works across Northeast Ohio, including in Akron.
Meanwhile, downtown su ers as a whole. Other businesses, such as bars and restaurants, have to get by with far fewer people on the streets than before.
e southern end of downtown Akron, where rents tend to be a little cheaper, the tenants a little younger and the businesses more retail-oriented, still has some foot tra c. But the heart of Main Street in the area of Cascade Plaza, basically the block between the Huntington Tower to the FirstEnergy building, is hurting.
“I’ve spent a lot of time around Cascade Square over the past couple of months. All the buildings with the big bank names on them? No one’s really home,” Pacella said. “ ere’s probably about 1.4 million square feet of (o ce) space there, and I bet there’s not more than 250 people there at any one time.”
at number used to be in the thousands, with Huntington alone reportedly once employing 1,200 people in its tower.
If there are any silver linings to this situation, one might be that Akron is not alone in it. Virtually all cities are experiencing the same problems.
“I don’t think Akron’s any worse o than Cleveland, Co-
One of those leaders is Don Taylor, CEO of Welty Building Co., which brought the $40 million Bowery project across the nish line with nearly 100 apartments.
Taylor said the city needs to do two main things: identify the Class A o ce buildings it should keep while continuing to convert other o ce buildings to apartments,
Taylor thinks the FirstEnergy building and the adjacent Akron City Centre (with Chase Bank as its main tenant) are the best bets in terms of Class A space.
As for future residential conversions, he sees plenty of opportunities, but said he thinks the Huntington Tower, in particular, would make a great apartment building.
“Huntington, to me, is probably Class B (o ce space) or less,” Taylor said. “But Huntington as a residential building would be very cool.”
like Szekelyi in hopes of nding some alternative to costly bankruptcy proceedings.
But bankruptcy can’t always be avoided. And after trending down for the past few years, bankruptcy lings are beginning to tick back up, fueled by a coalescing of factors affecting companies across industry segments.
As such, there’s a sense in the business sector that we could be in the early innings of a growing wave of commercial bankruptcies.
“It’s three years since the pandemic began, and we’re still reeling with impacts of the pandemic and its impact on supply chains. We’re still really recovering from global supply chain issues,” said Anna Rathbun, chief investment o cer for CBIZ Advisory Services. “Because of the complexity of the global supply chain and the immense amount of mess the pandemic created, I think a lot of companies are still struggling.”
Cracks were already showing in the corporate sector before the pandemic, Rathbun said.
But the availability of cheap money in a prolonged low-interest-rate environment, coupled with government stimulus programs during the health crisis, masked a lot of those issues.
Massive debt loads are catching up with companies that may have bitten o too much while money was cheap. A $500 billion cloud of distressed corporate debt is looming over the economy, according to a recent Bloomberg analysis.
With pandemic e ects still lingering, in ation rising, supply chains still recovering, interest rates growing and bank credit tightening, a bankruptcy storm seems to be brewing.
“ is is not a friendly environment,” Rathbun said. “If you are overleveraged and having all sorts of problems delivering goods to clients because of supply chain issues and you face labor market problems while also losing pricing power, that is a recipe that doesn’t look great.” rough midyear 2023, commercial bankruptcy lings across the U.S. have increased by 18% compared with the same period last year, according to the American Bankruptcy Institute. Chapter 11 lings have spiked by 68%.
STG Electric Services
Larry Lott recently joined the STG Electric Services team as a project manager. He is a journeyman electrician with more than 40 years of experience in the construction industry. His background includes ground-up residential, multi-family, and commercial projects. He is a hands-on project leader with a passion for historic building preservation.
UBS Wealth Management USA
Charlie Bergman joins UBS as a Financial Advisor at the Pepper Pike of ce. He has more than 25 years of investment management experience helping clients pursue their nancial objectives by managing de ned strategies, which may incorporate individual stocks and bonds, portfolios, and third-party investment strategies. He leads the four-person advisor team, BG Wealth Management.
Total bankruptcies led in Ohio have increased by 16% as of midyear, with commercial lings up by 8%.
Of course, commercial bankruptcies are often led not in Ohio but in federal courts in other states, like Texas, Delaware, California and others. So those stats don’t account for Ohio companies that led bankruptcy cases in other jurisdictions. Regardless, whether they were led here or elsewhere, the Ohio market has already seen a number of high-pro le bankruptcy cases — predominantly Chapter 11s, which allow a company to reorganize assets and distressed debts, versus Chapter 7, which commences a liquidation.
Some big Ohio names that have already led for or completed Chapter 11 bankruptcy proceedings this year include a mix of companies like Invacare Corp., Diebold Nixdorf, Lordstown Motors, ViewRay Inc., University Square Real Estate Holdings and trucking company Yellow Corp., which is not based in Ohio but has operations in Akron and Columbus.
While situations that lead to bankruptcy include factors unique to each business, a common theme
right now is rising interest rates pummeling companies with large debt loads.
“Rates are going higher and higher, and that is going to a ect anyone who has to comply with nancial covenants in their loan documents,” said Elliot Smith, a partner at Benesch specializing in Chapter 11 bankruptcies and insolvencies. “If they have a debt-service ratio, interest rates are higher, and the debt service they pay is higher as a result, they might blow compliance with those nancial covenants.”
Smith said he’s seeing more defaults on nancial covenants right now than payment defaults.
Another factor that could drive bankruptcies is the extent to which bank lenders are prepared to be patient or exible with distressed borrowers.
During periods of economic uncertainty, banks tend to tighten credit standards. And according to the Federal Reserve’s July Senior Loan O cer Opinion Survey on Bank Lending Practices, banks are doing just that and tightening lending across a spectrum of loan categories, including commercial and industrial as well as commercial and residential real estate, credit
cards and other consumer loans.
“Banks most frequently cited a less favorable or more uncertain economic outlook and expected deterioration in collateral values and the credit quality of loans as reasons for expecting to tighten lending standards further over the remainder of 2023,” according to the Fed.
While traditional lenders typically are inclined to work with borrowers, a liquidity crunch in the banking sector could impede exibility.
Bankers don’t typically like to talk openly about the negotiating landscape.
“I think the banks have to be exible because oftentimes people borrowing from that bank have other relationships,” Rathbun said. “And I think small banks are stuck between a rock and a hard place because they don’t want to lose deposits, and right now there is a war for deposits. I think everyone wants to keep good relationships, but at the same time, (banks) really need the cash. So I think a lot of lenders are thinking about relationships in totality rather than solely looking at loans.”
Some companies that received debt lifelines are failing anyway.
UBS Wealth Management USA
Justine Greenwald joins UBS as a Financial Advisor at the Pepper Pike of ce with BG Wealth Management. She has more than 25 years of experience in nancial services, and has worked with small businesses, individuals and families, helping clients pursue their objectives by building personalized portfolios aligned with individual goals.
UBS Wealth Management USA
LEGAL
Cavitch Familo & Durkin
Cavitch, Familo & Durkin is proud to announce Harold O. Max eld, Jr.’s election to Managing Partner.
He’s been on the Board of Directors since 2007 and was named Ohio Super Lawyer 2023 and Best Lawyer in America 2024 for the fth year in both corporate and real estate law. With 37 years of experience, he specializes in corporate law, including contracts, tax, mergers, acquisitions, and real estate law, including purchases, sales, nancing, zoning, construction, and joint ventures.
Cavitch Familo & Durkin
Cavitch, Familo & Durkin is proud to announce Gregory E. O’Brien’s election to the rm’s Board of Directors. He chairs the insurance law committee and earned the prestigious title of Best Lawyer in America 2024 in insurance law and professional malpractice law – defendants for the second consecutive year. Greg is an adept appellate practitioner who has handled over 100 cases before the U.S. Sixth Circuit Court of Appeals, the Ohio Supreme Court, and intermediate Ohio appellate courts.
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Cavitch, Familo & Durkin is proud to announce attorney Michael R. Rasor was elected to the rm’s Board of Directors. He is the Chairman of the rm’s Capital and Finance Practice Group and the Co-Chairman of the Business Practice Group. Michael was selected as one of Crain’s Cleveland Forty Under 40 (2017) and named a Super Lawyers Rising Star (2024). Michael focuses his practice on counseling and advising privately held businesses, investment funds, and nancial institutions.
Moavero
“What I’m seeing right now, and this is always the case, but you have some banks that are being very di cult to deal with,” Szekelyi said. “But most banks will go into situations with troubled companies looking for the best outcome because that is their job. However, the best outcome for them might be to liquidate and get out.”
Liquidation is not the path most lenders really want to take. But whether that avenue is pursued will often depend not just on nancials but a lender’s faith in company management.
Another lever banks can pull with distressed clients is to push the deal o to another bank or nance company.
PoratLisa Moavero and Alona Porat join UBS Wealth Management USA as Client Associates at the Pepper Pike of ce with BG Wealth Management. Together, they bring a wealth of knowledge and experience to their roles ensuring clients’ needs are met and exceeded. BG Wealth Management manages $640 million in invested client assets with a focus on providing tailored investment strategies and comprehensive wealth management advice.
“But that is getting tougher and tougher because thosenance companies are looking to the future, and they don’t have a clear picture of what’s going to happen,” Szekelyi said. “ e re nancing option is getting dicier than it was in the past where it was pretty easy to re nance someone out of the bank. ose banks are still there, but they are getting tougher. So there may not be as many alternatives as there once was.”
All these factors combined seem to portend a coming wave of corporate bankruptcies and restructurings.
“Low interest rates created a lot of zombie companies with unsustainable businesses that have been sustained through cheap nancing. As thatnancing becomes more expensive, when they roll that over, they may not be able to service that debt,” Rathbun said. “ e expectation is we will see a wave of bankrupt companies down the road that had relied on cheap nancing.”
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