Cedar Rapids was ranked fifth and Iowa City sixth on The Daily Beast’s Recession-Proof Cities ranking.

Penford Corp. plans to appeal a judge’s dismisal of its lawsuit against two insurance companies it says reneged on paying flood insurance claims..

The Cedar Rapids corn milling company  lost its lawsuit this week against the two insurance companies it says failed to pay millions in insurance claims from the June 2008 flooding on the Cedar River.

Penford Products Corp.’s plant at 1001 First St. SW was indundated by the record Cedar River flood  resulting in a temporary plant closure and damages the company  expected to exceed $56 million.

National Union Fire Insurance Co. of Pittsburgh and Ace American Insurance Co. paid $20 million on the company’s policies, but denied many of Penford’s claims.

Among other defenses, the companies claimed their obligations were capped by two $10 million “sublimits” applicable to flooding in two zones at the Cedar Rapids plant.

Chief Judge Linda Reade dismissed Penford’s case Tuesday before it went to jury on motions filed by the insurance companies.

The motions filed by Attorney Matthew Ponzi of Chicago argued Penford tried to convince the court that the policy’s zone sublimits apply only to property damage and not business interruption losses, but failed to offer “extrinsic” or external evidence to support its position.

The insurers argued that they provided evidence supporting their interpretation of the policy in the form of testimony from a witness employed by Penford’s risk management advisor, Marsh Inc., of Chicago.

The insurers also filed a motion that Penford could not recover on a claim for bad faith actions.

Ponzi argued that Penford failed to prove that the insurers’ conduct was unreasonable. By the judge’s determining that the insurance policy was ambiguous, the insurers argued that the court also determined that their interpretation of the policy’s flood sublimit was reasonable.

Penford Corp. manufactures ethanol and starch used in the paper industry.

The company said it is disappointed in the ruling in a brief statement issued Friday, August 27, and said it plans to appeal.

Judge Reade ruled that Penford must pay the insurers’ legal costs.

A  single 23.5-ounce can of Four brand malt liquor, with 12 percent alcohol by volume contains almost as much alcohol as four cans of Budweiser.

That’s plenty to get some adults legally drunk if consumed within an hour or two.

But the fruit flavors in which the beverage is sold, like peach, grape and raspberry, hardly seem to be developed with grownups in mind. The huge brightly-colored cans don’t either.

A new generation of high alcohol flavored malt beverages with names like Four and Joose  have hit store shelves in the past three months. They’re already hot sellers in some markets.

They are an unintended consequence, some say, of a March revision of Iowa’s alcohol laws intended to let Iowa microbreweries produce high-alcohol craft beers.

“With every law, there are unintended consequences, and this is one of those,” said Doug Alberhasky, beer specialist at John’s Grocery in Iowa City.

Alberhasky was a supporter of the “Iowa Beer Equality Bill.” The bill was intended in large part to help in-state microbreweries compete by allowing them to apply for licenses to produce craft beers containing up to 15 percent alcohol by volume It also allows beer wholesalers to apply for licenses to sell high-alcohol beers..

The bill was inserted into a massive government reorganization bill, Senate File 2088 signed by Iowa Gov. Chet Culver in mid-March.

Alberhasky supported the beer equality beer because he wanted Iowa breweries to be able to compete in the growing high-alcohol beer category. When the high-alcohol flavored brews started hitting the shelves this summer, Alberhasky received an e-mail from a member of the state alcoholic beverages commission chiding him: “Is this what you had in mind?”

Alberhasky responded in the negative.

Before the passage of the new beer laws, Iowa retailers could only get the high-alcohol malt beverages by ordering them from the Iowa Alcoholic Beverages Division, according to Judy Seib, special projectsion coordinator for the division. Private distributors were not allowed to sell them to retailers.

The state’s alcoholic beverage department did not stock drinks such as Four in its warehouse, Seib said, mainly because they have limited shelf life and there are too many varieties to keep them all in stock.

The law enabled private beer distributors to begin stocking and delivering the high-alcohol brews to retailers.

The first shipments of 11 percent alcohol Axe Head malt beverage arrived about three months ago at the Cigarette Outlet, a liquor and tobacco store in a lower-income Cedar Rapids neighborhood at 1404 First Ave. NE. It tasted like beer, however, and was not fruit flavored.

The Axe Head was followed about one month later by Four malt beverage, another high-alcohol brew, but one that came in fruit flavors. One week later, a third fruity concentrated malt beverage called Joose arrived on the scene.

Watermelon-flavored Four is now the hottest seller of any ”alcopop” malt beverage at the Cigarette Outlet. Beaupre expects the drinks to quickly surpass beer as the cheap drunk for many underage drinkers, because of the fruity flavor and high alcohol content at a low price.

“What do you think will happen when the kids catch on to this?” Beaupre asked.

Even though the store cards buyers religiously, Beaupre said it doesn’t stop the problem of adults who buy alcoholic beverages and share them with minors.

“They’re definitely targeting youth,” says Lindsay Elam, a certified prevention specialist for the Area Substance Abuse Council. “They have done this with several other energy drinks, like Sparks.”

Actually, Elam says, the new high-alcohol malt beverages are marketed as energy drinks. They contain caffeine and other ingredients that younger drinkers prefer, because they believe the stimulants will help keep partying longer.

Earlier alcopop energy drinks such as 4-percent-alcohol Sparks come in cans that look quite similar to non-alcoholic energy drinks, Elam said.

“If you don’t read labels carefully, it would be hard to identify what was what,” Elam said. “It poses a problem because it includes alcohol without the bad alcohol taste. You taste a fruity taste with it.”

While Sparks and Four could both be called alcopop energy drinks, there’s no comparison when it comes to the alcohol-to-energy ratio.

A bottle of Four costs about 40 cents more, but is 12 percent alcohol compared to Sparks’ 4 percent. The volume of beverage in a can is 50 percent greater.

One 23.5-ounce container of Joose or Four, to uninitiated young drinkers, equals one drink, Elam said.

“Kids are going to take it as, “I only had one can of alcohol, so I only had one drink.”

Although John’s Grocery in Iowa City is patronized by many University of Iowa students, Alberhasky said he won’t stock the new high-alchohol malt beverages. He called them “irresponsible,” and diametrically opposed to his goal of supporting responsible consumption of high-quality brews.

“These products are for nothing but effect,” Alberhasky said.

A call to City Brewing Co. of La Crosse, Wis., the maker of Four, was not immediately returned.

The mortgage foreclosure and delinquency rates in Iowa edged up in the second quarter, with the foreclosure rate hitting a record.

A Mortgage Bankers Association report issued Friday shows Iowa’s foreclosure rate rose to a record 2.82 percent in the second quarter. That’s up from 2.49 percent a year earlier and 2.77 percent in the first quarter.

The delinquency rate for residential mortgage loans in Iowa — homeowners 30 days or more late in making their house payments — was 6.3 percent at the end of the second quarter, up from 5.88 percent in the first quarter. The Mortgage Bankers Association said the delinquency rate excludes loans in the process of foreclosure.

The delinquency rate for prime adjustable rate mortgage loans increased from 7.69 percent in the first quarter to 8.37percent in the second quarter and the rate for prime fixed rate mortgage loans edged up from 2.47 percent in the quarter that ended March 31 to 3.56 percent in the quarter that ended June 30.

The delinquency rate for the subprime ARM loans jumped from 27.19 percent in the first quarter to 28.48 percent in the most recent quarter, while the rate for subprime fixed rate loans increased from 20.69 percent in the first quarter to 21.06 percent in the second quarter.

Among the 50 states and the District of Columbia, Iowa ranked 44th in delinquencies and 43rd in
foreclosures started, according to the Mortgage Bankers Association. Mississippi ranked first in delinquencies with a rate of 13.66 percent and Nevada ranked first in foreclosure starts with a rate of 2.93 percent.

On a national level, the delinquency rate for mortgage loans on one-to-four-unit residential
properties was 9.40 percent on a non-seasonally adjusted basis, up from 9.38
percent in the first quarter of this year. The seasonally adjusted delinquency rate on residential
properties was 9.85 percent in the first quarter, down from last quarter’s 9.64 percent
seasonally adjusted rate.

A study released Friday by the Iowa City/Coralville Area Convention & Visitors Bureau contends that the seven home Iowa Hawkeye football games will have more than a $100 million economic impact on Johnson County.

The Iowa City/Coralville Area Convention and Visitors Bureau collaborated on the study conducted fall by students enrolled in a University of Iowa graduate class under the direction of Michael Lomax, associate professor of leisure studies in the UI’s College of Liberal Arts and Sciences.

The survey-based study was conducted on Nov. 6 and Nov. 7, 2009, when Hawkeye fans visited the Iowa City/Coralville area for Iowa’s game against Northwestern.  A total of 572 surveys were completed by randomly selected fans assembled near Kinnick Stadium, aboard the Hawkeye Express, and in the lobby of five area hotels.

Out of 572 surveys, 465 were completed correctly and included in the study.

The data collected produced the following results:

–The projected economic impact of one Iowa football game on Johnson County is more than $14.5 million.

–The projected economic impact of one seven-game season on Johnson County is more than $100.1 million.

–The Northwestern game attracted more than 51,000 visitors to Johnson County.

–The average size of a travel party is 3.7 persons.

–On average, a travel party that indicated they stayed in a local hotel spent $944 during their stay.

–On average, a travel party that indicated they didn’t stay in a local hotel spent $273 each game weekend.

–Thirteen percent of respondents, who were here for the game, did not actually attend.  They reported being here for tailgating and retail activities.

Additional survey data will be collected this fall at the Ball State and Ohio State weekend games.

A problem with the delivery of engines by one of two suppliers has prompted Boeing Co. to delay deliveries of its new 787 Dreamliner until the first quarter of 2011.

Boeing on Friday said concerns about British engine manufacturer Rolls-Royce PLC’s ability to meet delivery schedules forced the Chicago-based airplane supplier to delay initial deliveries of the new commercial airliner.

Rolls-Royce said the delay was not related to the reported failure of an engine for the 787 Dreamliner in a recent test.

“We have been informed by Boeing that the currently planned dates for Trent 1000 engine deliveries will not support their latest flight test program requirements,” Rolls-Royce said in a statement Friday.

FlightGlobal, an aviation news Website, reported this week that a Trent 1000 engine suffered an “uncontained” failure  with debris breaking through the engine casing during a test on Aug. 2.

Rockwell Collins supplies the airplane’s flight deck, display system, crew alerting system, pilot controls, communication system, surveillance system, common data network and core network cabinet. The Cedar Rapids-based company also serves as systems integrator.

Boeing said the 787 Dreamliner delivery delay will not affect its financial outlook.

The 787 Dreamliner is made of many composite materials designed to make it lighter and more fuel-efficient than comparable planes used by the world’s airlines. Japan’s All Nippon Airways is the first customer slated to take delivery of the 787 Dreamliner.

Christopher Zock, former Cunat executive

The former executive vice president of operations at Cunat Inc., owner of two Cedar Rapids apartment complexes, is suing his former employer and business partner, claiming he is owned millions.

Christopher Zock, 32, claims in a lawsuit filed Aug. 18 in Cook County (Ill.) Circuit Court that Brian Cunat, 53, and his development company owes Zock $18.8 million for his stakes in 11 ventures to build projects in three states. Zock, who was forced out of Cunat Inc. last year, also is seeking to recover $1.85 million in loans that he made in 2008 to various company affiliates.

Cunat Inc. of McHenry, Ill., owns and operates The Pointe and Windsor on the River apartment complexes in Cedar Rapids. Cunat invested more than $20 million in the purchase and substantial upgrading of the 46-year-old Spring Park complex in northeast Cedar Rapids before renaming it The Pointe.

Cunat, founded in 1976, controls 13 apartment communities in the Chicago area, primarily in the northwest suburbs. In addition to its Cedar Rapids properties, the company also has developed and manages properties in Nashville, Tenn.

Zock’s lawsuit says Brian Cunat does not dispute the value of his ownership stakes, but claims Zock owes him more than $36 million. Zock’s complaint states that Brian Cunat’s claims are without merit.

An executive of a Cedar Rapids-based animal feed additive company says processes and safeguards are in place to assure food chain safety.

Mark Kujawa, vice president of international business at Diamond V Mills in Cedar Rapids, says the animal nutrition industry has strict processes and check points to ensure product quality.

“Today’s modern animal feed and feed additive production is way different from what it was 50 years ago,” Kujawa said. “There are a lot of quality control checks within the system. Every batch of animal feed has to be traced back to its original ingredients, almost back to the individual farm.

“There is federal and state oversight as well as industry oversight.”

CNN reported Thursday that feed given to hens at two Iowa farms is a likely source of contamination that led to a nationwide salmonella outbreak.

Federal officials said the disease also has turned up in manure samples taken around the farms as well.

The feed could have become contaminated after it went through heat treatment that was sufficient to kill salmonella, officials from the Food and Drug Administration told CNN.

Produced at a mill at a Wright County Egg facility, the feed was given to pullet chickens at both Wright County Egg and Hillandale Farms, which between them recalled more than a half-billion eggs since the salmonella outbreak.

The outbreak has sickened a reported 2,403 people between May 1 and Aug. 25, the U.S. Centers for Disease Control and Prevention said in a conference call.

Kujawa said food safety has become a global issue.

“People are concerned about food safety everywhere,” he said. “That’s why our whole industry has aligned itself with food safety and security for many years. Whatever the animal eats ultimately makes its way into people.”

Diamond V Mills, founded in 1943, specializes in yeast supplements and new animal feed technology for cattle, horse, swine, poultry and pet foods.

For the 14th consecutive quarter, Iowans had the lowest average credit card debt in the nation as the overall use of “plastic” continues to decline.

TransUnion’s quarterly analysis showed the average balance for a bank-issued card in Iowa was $3,792 at the end of the second quarter on June 30, down from $3,872 at the end of the first quarter on March 31 and $4,139 at the end of 2009.

TransUnion, a credit-reporting company, said the average credit card  debt declined for the fifth consecutive quarter nationally by 4.1 percent to $4,951 from the previous quarter’s $5,165, and down 13.4 percent compared with $5,719 at the end of the second quarter of 2009.

The second-quarter figure represented the first period that average credit card debt nationally was below $5,000 since the first quarter of 2002.

The national credit card delinquency rate (the ratio of bankcard borrowers 90 days or more delinquent on one or more of their credit cards) declined to 0.92 percent in the quarter that ended June 30, down 17.1 percent from the previous quarter. Year over year, credit card delinquencies fell by 21.3 percent.

Only Alaska showed an increase in credit card delinquency, up 7.4 percent.

Ezra Becker, director of consulting and strategy in TransUnion’s financial services business unit, said five consecutive quarters of decreases in average credit card balances show consumers continue to pay down their credit cards in response to economic uncertainty and high unemployment.

“Many consumers view available credit as a liquidity reserve that can be drawn upon in the event of a personal hardship,” Becker said. ”We also see the impact of this pay-down effort on the later-stage delinquency side of the equation. Both the 90-day and 120-day non-payment rates showed the largest declines on a quarter-over-quarter and year-over-year basis since the recession began at the end of 2007.”

The Commerce Department recently reported the consumers have been saving more relative to their disposable income than previously thought. The national savings rate as a percentage of disposable personal income was reported to be just over 6 percent in the second quarter of 2010, the highest level since June 2009.

The Federal Reserve recently reported that consumer spending and personal incomes remained flat in June.

Lauren Wathen of Coralville looks at shorts for her boyfriend as she shops at the Coralville Stuff Etc in April. The 25-year-old Iowa City-based consignment store chain plans to open its fifth location later this year in Waterloo. It will be the company's first store outside the Cedar Rapids-Iowa City Corridor. Jim Slosiarek/SourceMedia Group News

Stuff Etc, the Iowa City-based consignment store chain, will open its first store outside the Cedar Rapids-Iowa City Corridor and fifth location later this year in Waterloo.

The 25-year-old business, with locations in Iowa City, Coralville, and two in Cedar Rapids, will lease a 23,000-square-foot building that formerly housed an Office Depot store at 1210 Flammang Dr., near Crossroads Shopping Center and Target.

The Waterloo Stuff Etc on Oct. 1 will begin accepting gently used items that include, but are not limited to, furniture, adult through infant clothing and shoes, appliances, books, electronics, household items, sportswear and home décor. 

The store, which will be roughly the same size at the company’s Iowa City location, is expected to open in early November.

During an interview in April, Mary Sundblad, co-founder of Stuff Etc, said stores owned by franchisees are expected to open later this year in Ankeny and Cedar Falls. Sundblad also expressed a desire to see Stuff Etc franchise stores eventually open in every state.  

Lockard Realty of Cedar Falls handled the leasing arrangements.