No more Twinkies? Hostess plans to shut down

Indiana Hostess plants could shut down after workers strike.

Hostess Brands Inc., the bankrupt maker of Twinkies and Wonder Bread, said it had sought court permission to go out of business after failing to get wage and benefit cuts from thousands of its striking bakery workers.

Hostess said a national strike by members of the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union that began last week had crippled its ability to produce and deliver products at several facilities.

Hostess Chief Executive Gregory Rayburn said in an interview on CNBC Friday morning that Hostess could not avoid liquidation, even if members of its bakers' union ended their strike immediately and went back to work.

The liquidation of the company will mean that most of its 18,500 employees will lose their jobs, Hostess said on Friday.

In the Chicago area, Hostess employs about 300 workers making CupCakes, HoHos and Honey Buns in Schiller Park. Hostess also has a bakery in Hodgkins, where 325 workers make Beefsteak, Butternut, Home Pride, Nature’s Pride and Wonder breads.

The 82-year-old company said it took the decision to shut down after determining that not enough employees had returned to work by a deadline on Thursday.

The company, which filed for bankruptcy in January for the second time since 2004, said it had filed a motion with U.S. Bankruptcy Judge Robert Drain in White Plains, New York, for permission to shut down and sell assets.

Irving, Texas-based Hostess has 565 distribution centers and 570 bakery outlet stores, as well as the 33 bakeries. Its brands include Wonder, Nature's Pride, Dolly Madison, Drake's, Butternut, Home Pride and Merita, but it is probably best known for Twinkies -- basically a cream-filled sponge cake.

"We deeply regret the necessity of today's decision, but we do not have the financial resources to weather an extended nationwide strike," Chief Executive Gregory Rayburn said in a statement.

"Hostess Brands will move promptly to lay off most of its 18,500-member workforce and focus on selling its assets to the highest bidders," Rayburn added.

Union President Frank Hurt said on Thursday that the crisis at the company was the "result of nearly a decade of financial and operational mismanagement" and that management was trying to make union workers the scapegoats for a plan by Wall Street investors to sell Hostess.

Hostess said its debtor-in-possession lenders had agreed to allow the it to continue to have access to $75 million to fund the wind-down process.

"There's no way to soften the fact that this will hurt every Hostess Brands employee. All Hostess Brands employees will eventually lose their jobs - some sooner than others," Rayburn said in a letter to employees.

The company has canceled all orders in process with its suppliers and said any product in transit would be returned to the shipper.

In its filing with the court, the company said it would have incurred a loss of between $7.5 million and $9.5 million from Nov. 9 to Nov. 19 in lost sales and increased costs.

"These losses and other factors, including increased vendor payment terms contraction, have resulted in a significant weakening of the debtors' cash position and, if continued, would soon result in the debtors completely running out of cash," it said.

Hostess had already reached agreement on pay and benefit cuts with the International Brotherhood of Teamsters, its largest union.

The case is In re: Hostess Brands Inc, U.S. Bankruptcy Court, Southern District of New York, No. 12-22052.

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Man charged in hit-and-run that killed father of 3

A West Rogers Park man has been charged with reckless homicide in the hit-and-run death of a leader in the Chicago area's Tibetan community this week, police said.

Fernando Jasso Perez, 23, lives just a block from where Tsering Dorjee was struck as he and his brother-in-law crossed the street in the 6400 block of North Maplewood Avenue around 6 p.m. Monday, according to police.

Perez was also charged with failure to report an accident resulting in death and failure to report an accident resulting in an injury. Police said Perez has never had a driver's license.

Dorjee had spent the day helping his brother-in-law find an apartment for his family, expected to arrive from India next month. Around 6 p.m., he and Dakpa Jorden  were crossing the street on their way to get food when they both were struck by a dark blue Volkswagen that kept on driving, police said.

Dorjee, 44, was pronounced dead late Monday night at St. Francis Hospital in Evanston, according to the Cook County medical examiner's office. Jorden suffered a broken leg and was also taken to Saint Francis Hospital.

Police found the Volkswagen around noon Tuesday and announced charges against Perez Thursday morning. Perez, of the 6400 block of North Campbell Avenue, is to appear in bond court today.

Dorjee worked in the Cook County Clerk’s office for 14 years and was president of the Rogers Park Chamber of Commerce. While living in India, Dorjee worked for the Tibetan government in exile, according to Lhakpa Tsering, president of the Tibetan Alliance of Chicago.

He leaves behind his wife and three children under 6.

pnickeas@tribune.com

Twitter: @peternickeas

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Texas Instruments cuts 1,700 jobs, winds down tablet chips

NEW YORK/SAN FRANCISCO (Reuters) - Texas Instruments is eliminating 1,700 jobs, as it winds down its mobile processor business to focus on chips for more profitable markets like cars and home appliances.

Texas Instruments said in September it would halt costly investments in the increasingly competitive smartphone and tablet chip business, leading Wall Street to speculate that part of the company's processor unit, called OMAP, could be sold.

The layoffs are equivalent to nearly 5 percent of the Austin, Texas-based company's global workforce.

"A sale would have been better than a restructuring but a restructuring is certainly better than nothing," Sanford Bernstein analyst Stacy Rasgon said.

TI has been under pressure in mobile processors, where it has lost ground to rival Qualcomm Inc. Leading smartphone makers Apple Inc and Samsung Electronics Co Ltd have been developing their own chips instead of buying them from suppliers like TI.

Instead of competing in phones and tablets, TI wants to sell its OMAP processors in markets that require less investment, like industrial clients like carmakers.

TI is expected to continue selling existing tablet and phone processors for products like Amazon.Com Inc's Kindle tablets for as long as demand remains, but stop developing new chips.

"This year, the Kindle runs on the OMAP 4 and next year's Kindle is slated, we believe, for OMAP 5. We believe that program is well along to completion and do not expect that the termination of OMAP will disrupt those plans," said Longbow Research analyst JoAnne Feeney.

Amazon had reportedly been in talks to buy the mobile part of OMAP.

TI said it expects to take charges of about $325 million related to the job cuts and other cost reduction measures, most of which will be accounted for in the current quarter. Its previously announced financial targets for the fourth quarter do not include these costs, TI said.

The company, which has 35,000 employees around the world, expects annualized savings of about $450 million by the end of 2013 from the action.

TI shares rose to $29 in after-hours trading after closing at $28.76, down 2 percent on Nasdaq.

(Reporting By Sinead Carew in New York and Noel Randewich in San Francisco; editing by Carol Bishopric)

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R.A. Dickey, David Price win Cy Young awards

NEW YORK (AP) — R.A. Dickey languished in the minors for 14 years, bouncing from one team to another before finally perfecting that perplexing knuckleball that made him a major league star.

David Price was the top pick in the draft and an ace by age 25, throwing 98 mph heat with a left arm live enough to make the most hardened scout sing.

Raised only 34 miles apart in central Tennessee, Dickey and Price won baseball's Cy Young awards on Wednesday — one by a wide margin, the other in a tight vote.

Two paths to the pantheon of pitching have rarely been more different.

"Isn't that awesome?" said Dickey, the first knuckleballer to win a Cy Young. "It just shows you there's not just one way to do it, and it gives hope to a lot of people."

Dickey said he jumped up and yelled in excitement, scaring one of his kids, when he saw on television that Price edged Justin Verlander for the American League prize. Both winners are represented by Bo McKinnis, who watched the announcements with Dickey at his home in Nashville, Tenn.

"I guess we can call him Cy agent now," Price quipped on a conference call.

The hard-throwing lefty barely beat out Verlander in balloting by the Baseball Writers' Association of America, preventing the Detroit Tigers' ace from winning consecutive Cy Youngs.

Runner-up two years ago, Price was the pick this time. He received 14 of 28 first-place votes and finished with 153 points to 149 for Verlander, chosen first on 13 ballots.

"It means a lot," Price said. "It's something that I'll always have. It's something that they can't take away from me."

Other than a 1969 tie between Mike Cuellar and Denny McLain, it was the closest race in the history of the AL award.

Rays closer Fernando Rodney got the other first-place vote and came in fifth.

The 38-year-old Dickey was listed first on 27 of 32 National League ballots and totaled 209 points, 113 more than 2011 winner Clayton Kershaw of the Los Angeles Dodgers. Washington lefty Gio Gonzalez finished third.

Cincinnati right-hander Johnny Cueto and Atlanta closer Craig Kimbrel each received a first-place vote, as did Gonzalez. Kershaw had two.

Dickey joined Dwight Gooden (1985) and three-time winner Tom Seaver as the only Mets to win the award. The right-hander went 20-6 with a 2.73 ERA, making him the club's first 20-game winner since Frank Viola in 1990, and became the first major leaguer in 24 years to throw consecutive one-hitters.

Perhaps most impressive, Dickey did it all during a season when the fourth-place Mets finished 74-88.

"It just feels good all over," he said on MLB Network.

Dickey switched from conventional pitcher to full-time knuckleballer in a last-ditch effort to save his career. It took him years to finally master the floating, darting pitch, which he often throws harder (around 80 mph) and with more precision than almost anyone who used it before him.

"I knew what I was going to be up against in some regard when I embraced this pitch," Dickey said.

He was the first cut at Mets spring training in 2010 but earned a spot in the big league rotation later that season and blossomed into a dominant All-Star this year. He led the NL in strikeouts (230), innings (233 2-3), complete games (five) and shutouts (three) — pitching through an abdominal injury most of the way.

"I am not a self-made man by any stretch of the imagination," Dickey said. "The height of this story, it's mind-blowing to me, it really is."

A member of the 1996 U.S. Olympic team and a first-round draft pick out of Tennessee, Dickey was devastated when the Texas Rangers reduced their signing-bonus offer from more than $800,000 to $75,000 after they discovered during a physical that he was missing a major ligament in his pitching elbow.

Undeterred, perseverance got him to the big leagues anyway. When he failed, the knuckleball brought him back.

Among those he thanked ceaselessly for helping him on that long and winding road to success were all his proud knuckleball mentors, including Charlie Hough, Tim Wakefield and Hall of Famer Phil Niekro.

"It brings a real degree of legitimacy I think to the knuckleball fraternity and I'm glad to represent them and I'm certainly grateful to all those guys," Dickey said. "This was a victory for all of us."

Dickey said he received 127 text messages and 35-40 phone calls in the moments immediately following the Cy Young announcement.

The only call he took was from Niekro, a 318-game winner from 1964-87. The first texts Dickey responded to were from Wakefield and Hough.

"Most well-deserved," Niekro said in a comment provided by the Hall of Fame. "I'm super proud of him, as a pitcher and as an individual."

Dickey has one year left on his contract at $5.25 million and New York general manager Sandy Alderson has said signing the pitcher to a multiyear deal is one of his top offseason priorities. Alderson, however, would not rule out trading his unlikely ace.

"I believe the Mets are going to be a lot better and I want to be part of the solution," Dickey said, adding that he hopes the sides can strike a deal and he'd be happy to end his career in New York.

"I want to be loyal to an organization that's given me an opportunity," he said. "At the same time, you don't want to be taken advantage of. I've been on that side of it, too, as a player."

Price went 20-5 to tie Jered Weaver for the American League lead in victories and winning percentage. The 27-year-old lefty had the lowest ERA at 2.56 and finished sixth in strikeouts with 205.

Verlander, also the league MVP a year ago, followed that up by going 17-8 with a 2.64 ERA and pitching the Detroit Tigers to the World Series. He led the majors in strikeouts (239), innings (238 1-3) and complete games (six).

Price tossed 211 innings in 31 starts, while Verlander made 33. One factor that could have swung some votes, however, was this: Price faced stiffer competition in the rugged AL East than Verlander did in the AL Central.

"I guess it's a blessing and a curse at the same time," Price said. "There's not an easy out in the lineups every game. It feels like a postseason game."

The No. 1 pick in the 2007 amateur draft out of Vanderbilt, Price reached the majors the following year and has made three straight All-Star teams.

Despite going 19-6 with a 2.72 ERA in 2010, he finished a distant second in Cy Young voting to Felix Hernandez, who won only 13 games for last-place Seattle but dominated most other statistical categories that year.

The two MVP awards will be announced Thursday. Verlander's teammate, Triple Crown winner Miguel Cabrera, is a leading contender in the American League.

NOTES: The last AL pitcher to win back-to-back Cy Youngs was Boston's Pedro Martinez in 1999 and 2000. San Francisco RHP Tim Lincecum did it in the National League in 2008-09. ... Price and Dickey became the fourth pair of Cy Young winners born in the same state, according to STATS. The others were Jim Lonborg and Mike McCormick in 1967 (California), Viola and Orel Hershiser in 1988 (New York) and Pat Hentgen and John Smoltz in 1996 (Michigan). ... Niekro and his brother, Joe, both finished second in Cy Young voting, as did fellow knuckleballer Wilbur Wood.

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'30 Rock' heroine Liz Lemon to wed this month

NEW YORK (AP) — Liz Lemon is getting married and you're invited.

Fans of "30 Rock" might have reasonably assumed that Lemon, the harried TV producer played by Tina Fey, would ride out the series' seventh and final season as a perennial bachelorette unlucky in love. But Fey, who is also the creator and producer of the NBC comedy, clearly thought otherwise.

In the "30 Rock" episode airing Nov. 29, Lemon will wed.

Who's the lucky guy? He's Liz's latest fella, Criss Chross (played by guest star James Marsden), a Peter Pan-ish would-be entrepreneur who hatches ventures such as an organic gourmet hot-dog truck.

On Thursday, NBC made the grand announcement that Ms. Elizabeth Miervaldis Lemon, 42, would be presenting herself to be married to Mr. Crisstopher Rick Chross — "But not in a creepy way that perpetuates the idea that brides are virgins and women are property."

The invitation also specifies that guests (i.e., you viewers) should plan to "bring your own snacks."

No preview of the episode has been made available.

The series, which airs Thursdays at 8 p.m. EST, will conclude early next year.

"30 Rock" is the saga of Lemon, the overextended producer of a fictitious comedy show loosely inspired by "Saturday Night Live" (where Fey toiled for nine seasons as cast member and writer). Liz is surrounded by kookie comrades like company boss Jack Donaghy (Alec Baldwin) and Tracy Jordan (Tracy Morgan), her boisterously unhinged star.

A recurring theme of "30 Rock" has been Lemon's comicaly flawed love life. Short-lived boyfriends have included quirky airline pilot Carol Burnett (played by Matt Damon), immature businessman Dennis Duffy (Dean Winters) and dimwitted pediatrician Dr. Drew Baird (Jon Hamm).

But clearly there was something special about Criss, who first arrived on the scene last season.

Even before meeting him, Donaghy was disapproving: "Lemon, I have said 'Good God' to you before," he huffed, "but I don't think I've ever MEANT it until now: Good God!!!"

But Criss is different, Liz insisted: "I'm more relaxed around him. My jaws stopped popping. And for once I'm not overthinking everything."

Jack wasn't convinced. He noted that Criss is a puppy-dog-eager dork who carries a Sunglass Hut credit card and owns a ukulele plastered with an Obama sticker.

Is this a match made in heaven? The wedding invitation says, "Whatever. It's no big whoop." But the episode is sure to be a very big whoop.

___

Online:

http://www.nbc.com/30-rock

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McDonald's U.S. chief steps down

Jan Fields, president of McDonald's USA, at a McDonald's restaurant in Oak Brook in 2011. (Alex Garcia/ Chicago Tribune / November 15, 2012)

Reuters

7:58 a.m. CST, November 15, 2012

McDonald's Corp. said Thursday it is replacing Jan Fields, president of its U.S. business.

The move comes a week after the world's largest hamburger chain reported its first monthly decline in global restaurant sales in nine years.

Fields, 57, will be succeeded by Jeff Stratton, currently the company's global chief restaurant officer.

Company spokeswoman Heidi Barker Sa Shekhem said the move was "a business decision by senior management."

"We feel that now was the right time to make a change in leadership for the U.S. business," Shekhem said. She said she did not know what Fields's future plans were.

McDonald's replaced its chief executive officer in July.

Fields has been with McDonald's for more than 35 years.

MCD data by YCharts

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40-year-old fatally shot inside Gresham neighborhood store

A man was found fatally shot in a store on 1100 block of West 84th Street. (WGN-TV / November 14, 2012)

By Peter Nickeas and Julie Unruh




Chicago Tribune

7:24 a.m. CST, November 14, 2012

A man was shot and killed as he worked behind a plexiglass barrier in a convenience store in the Gresham neighborhood on the South Side, police said.

Police responded to a call of shots fired in the 1100 block of West 84th Street around 7:40 p.m. Tuesday and found Elahmadi Goba, 40, lying behind the counter, authorities said.

He appeared to have been shot by someone who fired through the plexiglass that separated the register area from the rest of the store, police said. The glass had at least one bullet hole in it and the door to the closed off area was locked, police said. Paramedics had to force their way in.

A resident in the neighborhood, Katrina Simmons, described Goba as a "good man" who was pleasant to his customers.

"(If you’re) short a couple dollars, he’ll be like, 'Yea, go ahead, go ahead on and get you what you need. You could always come back and give me back whatever you have to owe me or whatever,' " she said. "He was a good man."

It's not clear if the store was robbed, police said. The store is just east Paul Cuffe Math-Science Technology Academy Elementary School.

An autopsy is scheduled for Wednesday afternoon. Goba had lived in the 500 block of East 79th Street, officials said.

pnickeas@tribune.com
Twitter: @peternickeas

Peter Nickeas is a Tribune reporter. Julie Unruh is a WGN-TV reporter.

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AT&T sees $1 billion opportunity in company cybersecurity

BARCELONA (Reuters) - Companies will double or triple spending on cybersecurity in the coming years as attacks grow more sophisticated and frequent, creating a billion dollar business opportunity for U.S. carrier AT&T Inc, it said on Wednesday.

Attacks on AT&T networks have doubled in the past four months and now tend to be more targeted to evade detection, Frank Jules, president of AT&T's global enterprise unit, said at the Morgan Stanley TMT conference.

"We see them on a daily basis and they are now getting smaller instead of coming in huge waves, which were easier for us to detect," he said.

"Every chief information officer at major corporations that I meet wants to talk about security. I think this will be a $40 billion market one day."

Jules said AT&T's strategy for its global business solutions unit was to accompany big multinationals as they expand overseas to provide them not just with connectivity but new products and services like security and machine-to-machine technology, which puts mobile SIM cards into everything from cars to vending machines.

AT&T said in early November it would boost capital spending on its U.S. network by about 16 percent to $22 billion a year for the next three years to upgrade its wireless and wireline networks.

The announcement came after two consolidation deals this autumn look set to change the competitive landscape in the U.S. telecom market in which Verizon and AT&T are leaders and Sprint Nextel Corp and Deutsche Telekom's T-Mobile are trying to keep up with their network and marketing firepower.

Japanese mobile operator Softbank Corp announced in mid-October it would buy about 70 percent of Sprint for $20.1 billion, which some have predicting will give Sprint the capital to expand its network and potentially buy peers.

Deutsche Telekom is also seeking to merge its T-Mobile USA unit with smaller rival MetroPCS in an effort to keep up with larger operators in the United States.

Competition regulators scuppered a plan for AT&T to buy T-Mobile last year over concern it would lead to higher prices for consumers and a worse service.

Asked to comment on the Softbank deal, Jules said it was too early to see how newly-strengthened Sprint would impact the market.

"We wish we were able to buy T-Mobile, but we weren't permitted to do that. This new Sprint will be a competitor that we'll watch very closely," he said.

(Reporting by Leila Abboud; Editing by Mark Potter)

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AP source: Marlins trade 3 stars to Blue Jays

MIAMI (AP) — Reacting to the Miami Marlins' latest payroll purge on Twitter, slugger Giancarlo Stanton gave it three exclamation marks.

He wasn't exaggerating. The Marlins' spending spree a year ago didn't work, so they went the salary-dumping route again Tuesday, shedding some of their biggest stars and multimillion-dollar salaries in one blockbuster deal.

The Marlins swapped high-priced talent for top prospects, trading All-Star shortstop Jose Reyes, left-hander Mark Buehrle and ace right-hander Josh Johnson to the Toronto Blue Jays, a person familiar with the agreement said.

The person confirmed the trade to The Associated Press on condition of anonymity because the teams weren't officially commenting. The person said the trade sent several of the Blue Jays' best young players to Miami.

The stunning agreement came less than a year after the Marlins added Reyes, Buehrle and closer Heath Bell in an uncharacteristic $191 million spending binge as they rebranded and moved into a new ballpark. The acquisitions raised high hopes, but the Marlins instead finished last in the NL East.

Salary-paring actually began in July, when the Marlins parted with former NL batting champion Hanley Ramirez, second baseman Omar Infante and right-hander Anibal Sanchez, among others. Bell, the team's high-profile bust, was traded to Arizona last month.

Under owner Jeffrey Loria, long the target of fan acrimony, the Marlins have usually been among baseball's thriftiest teams. Management pledged that would change with the new ballpark, but team officials were disappointed with attendance in 2012, and revenue fell far short of their projections.

Even so, the blockbuster deal came as a shock. The players involved must undergo physicals before the trade becomes final.

Stanton, the Marlins' precocious slugger, wasn't involved in the deal but wasn't happy about it.

"Alright, I'm (mad)!!! Plain & Simple," he tweeted shortly after the news broke.

The housecleaning was also the subject of much mirth on Twitter.

"Good trade, I think we won it," tweeted FakeSamson, a site that mocks team president David Samson.

Toronto star Jose Bautista had a different interpretation.

"Its a good day to be a bluejay!" he tweeted.

The swap was easier for the Marlins to swing because of their longstanding policy of refusing to include no-trade clauses in contracts.

The deal gave an immediate boost to the Blue Jays, who have not reached the playoffs since winning their second consecutive World Series in 1993. Toronto went 73-89 this season and finished fourth in the AL East for the fourth straight year, again falling short in a division that includes big spenders.

The Marlins changed their name a year ago but failed to change their losing ways, and instead of contending for a playoff berth, they finished 69-93, their worst record since 1999.

The Marlins drew more than 2.2 million fans but had projected attendance of nearly 3 million. Team officials blamed the difference in part on manager Ozzie Guillen's laudatory comments early in the year about former Cuban leader Fidel Castro, which antagonized a large segment of an already-small fan base.

Guillen was fired after only one season with the team and replaced this month by the Marlins' former backup catcher, Mike Redmond.

President of baseball operations Larry Beinfest hinted at a big change in direction less than two weeks ago.

"We've kind of lost our Marlins way," he said. "The real Marlins way was we always outperformed our challenges. Whatever our challenges were, whether it was playing in a football stadium or weather or a lack of fans, or lack of revenue for that matter, we always found a way to outperform our challenges."

It now appears management will field a team with the expectation players will outperform their contracts, which was the franchise model for most of the past decade. The roster shake-up during the season reduced the payroll to $90.3 million from $112 million on opening day, and now could be dramatically lower next season.

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Report: FDA wanted to close Mass pharmacy in 2003

WASHINGTON (AP) — Nearly a decade ago, federal health inspectors wanted to shut down the pharmacy linked to a recent deadly meningitis outbreak until it cleaned up its operations, according to congressional investigators.

About 440 people have been sickened by contaminated steroid shots distributed by New England Compounding Center, and more than 32 deaths have been reported since the outbreak began in September, according to the Centers for Disease Control and Prevention. That has put the Framingham, Mass.-based pharmacy at the center of congressional scrutiny and calls for greater regulation of compounding pharmacies, which make individualized medications for patients and have long operated in a legal gray area between state and federal laws.

The House Energy and Commerce Committee released a detailed history of NECC's regulatory troubles on Monday, ahead of a meeting Wednesday meeting to examine how the outbreak could have been prevented. The 25-page report summarizes and quotes from FDA and state inspection memos, though the committee declined to release the original documents.

The report shows that after several problematic incidents, Food and Drug Administration officials in 2003 suggested that the compounding pharmacy be "prohibited from manufacturing" until it improved its operations. But FDA regulators deferred to their counterparts in Massachusetts, who ultimately reached an agreement with the pharmacy to settle concerns about the quality of its prescription injections.

The congressional report also shows that in 2003 the FDA considered the company a pharmacy. That's significant because in recent weeks public health officials have charged that NECC was operating more as a manufacturer than a pharmacy, shipping thousands of doses of drugs to all 50 states instead of small batches of drugs to individual patients. Manufacturers are regulated by the FDA and are subject to stricter quality standards than pharmacies.

The report offers the most detailed account yet of the numerous regulatory complaints against the pharmacy, which nearly date back to its founding in 1998. Less than a year later, the company was cited by the state pharmacy board for providing doctors with blank prescription pads with NECC's information. Such promotional items are illegal in Massachusetts and the pharmacy's owner and director, Barry Cadden, received an informal reprimand, according to documents summarized by the committee.

Cadden was subject to several other complaints involving unprofessional conduct in coming years, but first came to the FDA's attention in 2002. Here are some key events from the report highlighting the company's early troubles with state and federal authorities:

__ In March of 2002 the FDA began investigating reports that five patients had become dizzy and short of breath after receiving NECC's compounded betamethasone repository injection, a steroid used to treat joint pain and arthritis that's different from the one linked to the current meningitis outbreak.

FDA inspectors visited NECC on April 9 and said Cadden was initially cooperative in turning over records about production of the drug. But during a second day of inspections, Cadden told officials "that he was no longer willing to provide us with any additional records," according to an FDA report cited by congressional investigators. The inspectors ultimately issued a report citing NECC for poor sterility and record-keeping practices but said that "this FDA investigation could not proceed to any definitive resolution," because of "problems/barriers that were encountered throughout the inspection."

__ In October of 2002, the FDA received new reports that two patients at a Rochester, N.Y., hospital came down with symptoms of bacterial meningitis after receiving a different NECC injection. The steroid, methylprednisolone acetate, is the same injectable linked to the current outbreak and is typically is used to treat back pain. Both patients were treated with antibiotics and eventually recovered, according to FDA documents cited by the committee.

When officials from the FDA and Massachusetts Board of Pharmacy visited NECC later in the month, Cadden said vials of the steroid returned by the hospital had tested negative for bacterial contamination. But when FDA scientists tested samples of the drug collected in New York they found bacterial contamination in four out of 14 vials sampled. It is not entirely clear whether FDA tested the same lot shipped to the Rochester hospital.

__ At a February 2003 meeting between state and federal officials, FDA staff emphasized "the potential for serious public consequences if NECC's compounding practices, in particular those relating to sterile products, are not improved." The agency issued a list of problems uncovered in its inspection to NECC, including a failure to verify if sterile drugs met safety standards.

But the agency decided to let Massachusetts officials take the lead in regulating the company, since pharmacies are typically regulated at the state level. It was decided that "the state would be in a better position to gain compliance or take regulatory action against NECC as necessary," according to a summary of the meeting quoted by investigators.

The FDA recommended the state subject NECC to a consent agreement, which would require the company to pass certain quality tests to continue operating. But congressional investigators say Massachusetts Board of Pharmacy did not take any action until "well over a year later."

__ In October 2004, the board sent a proposed consent agreement to Cadden, which would have included a formal reprimand and a three-year probationary period for the company's registration. The case ended without disciplinary action in 2006, when NECC agreed to a less severe consent decree with the state.

Massachusetts officials indicated Tuesday they are still investigating why NECC escaped the more severe penalty.

"I will not be satisfied until we know the full story behind this decision," the state's interim health commissioner Lauren Smith said in a transcript of her prepared testimony released a day ahead of delivery. Smith is one of several witnesses scheduled to testify Wednesday, including FDA Commissioner Margaret Hamburg.

The committee will also hear from the widow of 78-year-old Eddie C. Lovelace, a longtime circuit court judge in southern Kentucky. Autopsy results confirmed Lovelace received fungus-contaminated steroid injections that led to his death Sept. 17.

Joyce Lovelace will urge lawmakers to work together on legislation to stop future outbreaks caused by compounded drugs, according to a draft of her testimony.

"We now know that New England Compounding Pharmacy, Inc. killed Eddie. I have lost my soulmate and life's partner with whom I worked side by side, day after day for more than fifty years," Lovelace states.

Barry Cadden is also scheduled to appear at the hearing, after lawmakers issued a subpoena to compel him to attend.

The NECC has been closed since early last month, and Massachusetts officials have taken steps to permanently revoke its license. The pharmacy has recalled all the products it makes, including 17,700 single-dose vials of a steroid that tested positive for the fungus tied to the outbreak.

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