The Lede: Video Broadcast on State Television Was Downloaded From U.S. Drone, Iran Says

Last Updated, 2:17 p.m. Iran’s state television broadcast Wednesday what it described as video recorded by the American surveillance drone that crash-landed about 140 miles from the country’s border with Afghanistan in late 2011.

Video broadcast on Iranian state television, said to have been downloaded from an American surveillance drone that crash-landed in Iran in 2011.

As The Associated Press reports from Tehran, the state television broadcast included aerial views of what the narration described as the American air base in Kandahar, Afghanistan, plus still photographs of an RQ-170 Sentinel stealth drone at that base made public in 2011, and images of the craft being recovered in 2011 by Iran’s military.

The report also featured an interview with Gen. Amir Ali Hajizadeh, identified as the head of the aerospace division of Iran’s Revolutionary Guard Corps, who denied that the drone had simply crashed because of a computer malfunction, as American officials have claimed. “We were able to definitively access the data of the drone, once we brought it down,” General Hajizadeh said.

More footage said to have been recorded by the drone can be seen in a copy of the 24-minute Iranian report posted on YouTube on Wednesday by Lenziran, a site that monitors Iranian media.

In an analysis of the footage for Foreign Policy, the national security reporter John Reed observes that in one segment of the Iranian report, “the camera on this aircraft is positioned behind a rather complex nose landing gear assembly — a layout that matches grainy Web images of the Sentinel that show what looks like a compartment that could contain a camera positioned on the bottom of the airplane, just behind the front landing gear.”

A copy of an Iranian television report on a captured United States drone posted on YouTube.

The report, Mr. Reed adds, also features what appear to be authentic images of an American air base, “right down to C-130s parked on the ramp,” and “what looks like an MQ-9 Reaper drone (or possibly two) parked in an enclosed ramp — a drone pen if you will — complete with a walled perimeter and those tent hangars that are seen at expeditionary drone bases around the world.”

As The A.P. notes, on Thursday Iran’s Fars News Agency, which is close to the Revolutionary Guards, claimed that Iran had also started to produce functional copies of the smaller, American ScanEagle surveillance drone it displayed on state television in December. The Fars report quoted Iran’s deputy defense minister, Mohammad Eslami, saying that the country had also established a “production line for the drones in foreign countries.”

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ArcelorMittal, Announcing Loss, Indicates No Further Plant Closures in Europe

LONDON — ArcelorMittal, the world’s largest steel company, appeared to draw the line on additional European plant closures Wednesday, even as it announced a $4 billion net loss for the fourth quarter of 2012 and a $3.7 billion net loss for the year.

But the company’s results also highlighted just how bad operating conditions in Europe have been. A key reason for the losses was $5 billion in write-downs, almost all of it on its European businesses.

ArcelorMittal continues to be badly hurt by its operations in Europe, where it employs 98,000 people and where demand for steel has dropped by 30 percent since 2007, including a 9 percent decline in 2012. The company reported a $2.9 billion operating loss for the quarter in its European unit which supplies the beleaguered automobile industry.

Lakshmi N. Mittal, the company’s chairman and chief executive, said during a conference call with analysts Wednesday that he expected steel shipments to increase this year by 2 percent to 3 percent. That, he said, was because of growing demand for steel in China, Brazil and the United States, where the oil and gas industry, as well as auto and heavy equipment makers, were proving strong markets for ArcelorMittal’s products.

Unlike in Europe, he said that U.S. “businesses are getting loans.” He added that he expected Europe to remain in recession this year, but that this would be “far less severe than in 2012.”

Although ArcelorMittal is bidding on a steel plant being sold to the German steel maker ThyssenKrupp in Alabama, the company is mainly focusing on its new investments in mining, which has been more profitable than steel making of late, recording $1.2 billion in operating profit and a 22 percent operating margin last year.

The company announced Wednesday that the board had approved a big expansion and modernization of its iron ore mine in Liberia, part of a $4 billion effort to nearly double global iron ore production. The company’s iron ore output is likely to rise by 20 percent in 2013 as enlargement of its Canadian mines is completed, the company said.

Mr. Mittal said 2012 had turned out worse than expected, particularly in Europe and China, taking the industry by surprise.

“Production was not adjusted quickly enough, leading to oversupply and weak pricing,” he said, adding that steel prices were down 8.2 percent in 2012 from 2011.

Mr. Mittal created his company through a long series of acquisitions that culminated in an epic takeover battle for Arcelor, based in Luxembourg, in 2006. At the time it looked as if he had succeeded in achieving sufficient consolidation of the fragmented industry to make it highly profitable.

But conditions have been brutal since the financial crisis hit in 2008, with steel demand shrinking in Europe and North America, where ArcelorMittal has much of its operations. A large portion of the write-downs last year were noncash good will on European units acquired through the Arcelor merger.

The weak European economy “led to a downward revision of cash flow expectations” from these businesses, the company said.

Jeff Largey, an analyst at Macquarie Securities in London, wrote in a recent research note that the company made close to $43 billion in investments, including takeovers, from 2006 through 2011, whereas the company’s market value is now only about $28 billion. He said those figures raised questions about whether ArcelorMittal “will be able to generate shareholder value gains and sufficient returns from its investment projects.”

He also said that they raised “the question of whether the steel industry is capable of generating shareholder value” over the long term.

Mr. Largey wrote in an e-mail on Wednesday that he saw “a modest uplift in earnings for 2013” for ArcelorMittal, but that the steel industry remained hampered by “overcapacity and lackluster real demand, particularly in Europe.”

The difficult economic conditions have forced Mr. Mittal to take a knife to his operations, especially in Europe, where the company produces about 45 percent of its steel. ArcelorMittal previously announced the long-term idling of blast furnaces at Florange, France, various facilities in Liège, Belgium, and electric arc mills in Spain and Luxembourg as part of what it called its “asset optimization” program, which is designed to achieve $1 billion in annual savings.

The idlings and closures led to tensions with labor unions and a showdown with the government of President François Hollande of France over the closure at Florange, which employs 2,000 workers. The French government threatened to nationalize the facility before ArcelorMittal agreed to invest €180 million, or $234 million, in the site, though it indicated that the two blast furnaces would remain closed.

“We have had to deal with the negative reactions of many stakeholders during implementation, but steps we have taken have been essential, “ Mr. Mittal said Wednesday.

Aditya Mittal, the company’s chief financial officer and Mr. Mittal’s son, said ArcelorMittal did not “expect any further restructuring in Europe.” There will be further financial charges as the reorganization progresses, Aditya Mittal said.

Despite the company’s struggles, which have included downgrades of its debt to junk status, ArcelorMittal is still able to raise money in the markets. Last month it raised $4 billion through an offering of shares and convertible notes in an effort to reduce net debt, which it forecast would be $17 billion in June, down from $21.8 billion at the end of the year.

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The New Old Age Blog: For Women, Reduced Access to Long-Term Care Insurance

“This was a very, very good business for a short time, with people buying long-term care insurance like it was candy in a candy store,’’ said Michael Perry, a vice president at the Opus Advisory Group, a strategic financial planning firm in Purchase, N.Y.

No more. Mr. Perry has sold only one long-term care policy in the last six months and is “backing off from marketing’’ them as he watches this corner of the insurance business contract, raise premiums, tighten eligibility requirements and reduce key benefits. Long-term care insurance is a comparatively new product, launched in the late ’80s, and only now, as claims begin to pour in, have the actual costs to insurers become apparent.

Companies like MetLife, Prudential Financial, Allianz and Berkshire Financial (a subsidiary of Guardian) have stopped selling new policies and are hiking premiums for the ones already in place — up 37 percent, by one estimate, in 2011. Insurers are increasing elimination periods — the period during which a beneficiary must cover his or her own costs — and reducing inflation protection to 3 percent from 5 percent, once customary. They are requiring home visits instead of phone interviews from new applicants, as well as blood tests and a thorough examination of their medical records.

But the change that has generated the most public attention is so-called gender-distinct pricing, a new strategy that will raise rates for single women by as much as 40 percent beginning in April. Genworth Financial, the nation’s largest long-term care insurance provider with more than a million policy holders, is the first to win approval by state insurance commissions to raise rates for single women purchasing new policies. Women, most of them single by the time they reach advanced age, cost the company $2 of every $3 in benefits paid so far, according to Steve Zabel, Genworth’s senior vice president for long-term care insurance.

The company also will introduce what Mr. Zabel called “enhanced underwriting,” or more stringent qualifying standards, including blood testing to check for nicotine, drugs and markers of cardiovascular disease for all new applicants, regardless of gender or marital status.

Now permitted in all states except Montana and Colorado, gender-distinct pricing will not affect Genworth’s current policyholders, only new applicants. But all other carriers are likely to follow, according to Jesse Slome, executive director of the American Association for Long-Term Insurance, a trade group in Westlake Village, Calif. With the entire industry headed toward higher rates, Mr. Slome recently warned women that “the window is closing” and that now is the time to grab a policy while the price is still manageable.

Women have always paid less than men for life insurance. But because they live longer, women are the disproportionate beneficiaries of long-term care insurance, which paid out $6.6 billion in benefits in 2011. Mr. Slome expects that number to top $7 billion in 2012.

The reasons are well known:

* On average, women outlive men by five years. Among those born in 1960, the average man will live to age 67 and the average woman to age 73. And women who reach age 65 can expect to live an average of 20 more years.

* By age 75, 7 in 10 women are widowed, divorced or have never been married. Some 40 percent of them live alone, compared to 22 percent of men. Two-thirds of those past the age of 85 are women, as are 80 percent of centenarians.

* Women who live to age 65 experience on average two years of disability requiring assistance before death. Those who reach age 80 will require three years of assistance.

* In nursing homes, the most expensive form of long-term care, 7 in 10 residents are women. They represent 76 percent of the residents in assisted living facilities and two-thirds of the recipients of home care. Virtually none of this is paid for by Medicare, the government’s health plan for those 65-and-over. In nursing homes, Medicaid, a poverty program, kicks in for residents who run out of money.

“Woman live longer than men,” said Suzanna de Baca, a vice president of wealth strategies at Ameriprise Financial. “This may mean we experience a longer period of decline. Unfortunately, we are often less likely to have a partner around to help take care of us than our male counterparts.’’

Long-term care, Mr. Slome said, “is truly a women’s issue.”

While acknowledging the extra expense of caring for women, Mr. Slome said that in his view insurance carriers are being disingenuous in blaming the new policies on long-apparent gender differences. Rather he said, the culprit in the changing requirements is interest rates. “Blame the Federal Reserve,’’ he said.

Insurance carriers invest premiums and need to earn enough on that investment to pay benefits. When interest rates were higher, it was not all that difficult. Now the numbers don’t pencil out, and stockholders are fuming. But it is illegal to file for premium increases with the state insurance commissions based on changes in the financial market, Mr. Slome said.

This position does not endear Mr. Slome to his membership, at least one of whom disputes the claim. Asked if the new rate policies were related to interest rates, Mr. Zabel of Genworth, in an e-mail, replied with a succinct “no.”

Insurers say they were not able to judge the costs of care until the payouts began in earnest.

So what is a woman trying to prepare for old age supposed to do, especially after the elimination of the Class Act, a modest attempt to include long-term care in the Affordable Care Act?

Ms. da Baca suggests “careful and thorough budgeting,” “focusing on wellness,” and “proactive steps” to research suitable places to live when home is no longer an option. Ms. da Baca also advises women to make home modifications — incrementally, as one’s budget permits — to increase the chances that you’ll be able to stay there longer.

Mr. Perry, of the Opus Advisory Group, suggests an intriguing option: life insurance with a chronic care rider, which permits the policy-holder to spend money for such needs while alive, although doing so will reduce the tax-free death benefit. Still, not all buyers — or their survivors — are willing to sacrifice those benefits.

“The need is still there, no question about it,’’ Mr. Perry said. But long-term care insurance is likely to become much harder for everyone to find and afford, especially women.

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Read More..

The New Old Age Blog: For Women, Reduced Access to Long-Term Care Insurance

“This was a very, very good business for a short time, with people buying long-term care insurance like it was candy in a candy store,’’ said Michael Perry, a vice president at the Opus Advisory Group, a strategic financial planning firm in Purchase, N.Y.

No more. Mr. Perry has sold only one long-term care policy in the last six months and is “backing off from marketing’’ them as he watches this corner of the insurance business contract, raise premiums, tighten eligibility requirements and reduce key benefits. Long-term care insurance is a comparatively new product, launched in the late ’80s, and only now, as claims begin to pour in, have the actual costs to insurers become apparent.

Companies like MetLife, Prudential Financial, Allianz and Berkshire Financial (a subsidiary of Guardian) have stopped selling new policies and are hiking premiums for the ones already in place — up 37 percent, by one estimate, in 2011. Insurers are increasing elimination periods — the period during which a beneficiary must cover his or her own costs — and reducing inflation protection to 3 percent from 5 percent, once customary. They are requiring home visits instead of phone interviews from new applicants, as well as blood tests and a thorough examination of their medical records.

But the change that has generated the most public attention is so-called gender-distinct pricing, a new strategy that will raise rates for single women by as much as 40 percent beginning in April. Genworth Financial, the nation’s largest long-term care insurance provider with more than a million policy holders, is the first to win approval by state insurance commissions to raise rates for single women purchasing new policies. Women, most of them single by the time they reach advanced age, cost the company $2 of every $3 in benefits paid so far, according to Steve Zabel, Genworth’s senior vice president for long-term care insurance.

The company also will introduce what Mr. Zabel called “enhanced underwriting,” or more stringent qualifying standards, including blood testing to check for nicotine, drugs and markers of cardiovascular disease for all new applicants, regardless of gender or marital status.

Now permitted in all states except Montana and Colorado, gender-distinct pricing will not affect Genworth’s current policyholders, only new applicants. But all other carriers are likely to follow, according to Jesse Slome, executive director of the American Association for Long-Term Insurance, a trade group in Westlake Village, Calif. With the entire industry headed toward higher rates, Mr. Slome recently warned women that “the window is closing” and that now is the time to grab a policy while the price is still manageable.

Women have always paid less than men for life insurance. But because they live longer, women are the disproportionate beneficiaries of long-term care insurance, which paid out $6.6 billion in benefits in 2011. Mr. Slome expects that number to top $7 billion in 2012.

The reasons are well known:

* On average, women outlive men by five years. Among those born in 1960, the average man will live to age 67 and the average woman to age 73. And women who reach age 65 can expect to live an average of 20 more years.

* By age 75, 7 in 10 women are widowed, divorced or have never been married. Some 40 percent of them live alone, compared to 22 percent of men. Two-thirds of those past the age of 85 are women, as are 80 percent of centenarians.

* Women who live to age 65 experience on average two years of disability requiring assistance before death. Those who reach age 80 will require three years of assistance.

* In nursing homes, the most expensive form of long-term care, 7 in 10 residents are women. They represent 76 percent of the residents in assisted living facilities and two-thirds of the recipients of home care. Virtually none of this is paid for by Medicare, the government’s health plan for those 65-and-over. In nursing homes, Medicaid, a poverty program, kicks in for residents who run out of money.

“Woman live longer than men,” said Suzanna de Baca, a vice president of wealth strategies at Ameriprise Financial. “This may mean we experience a longer period of decline. Unfortunately, we are often less likely to have a partner around to help take care of us than our male counterparts.’’

Long-term care, Mr. Slome said, “is truly a women’s issue.”

While acknowledging the extra expense of caring for women, Mr. Slome said that in his view insurance carriers are being disingenuous in blaming the new policies on long-apparent gender differences. Rather he said, the culprit in the changing requirements is interest rates. “Blame the Federal Reserve,’’ he said.

Insurance carriers invest premiums and need to earn enough on that investment to pay benefits. When interest rates were higher, it was not all that difficult. Now the numbers don’t pencil out, and stockholders are fuming. But it is illegal to file for premium increases with the state insurance commissions based on changes in the financial market, Mr. Slome said.

This position does not endear Mr. Slome to his membership, at least one of whom disputes the claim. Asked if the new rate policies were related to interest rates, Mr. Zabel of Genworth, in an e-mail, replied with a succinct “no.”

Insurers say they were not able to judge the costs of care until the payouts began in earnest.

So what is a woman trying to prepare for old age supposed to do, especially after the elimination of the Class Act, a modest attempt to include long-term care in the Affordable Care Act?

Ms. da Baca suggests “careful and thorough budgeting,” “focusing on wellness,” and “proactive steps” to research suitable places to live when home is no longer an option. Ms. da Baca also advises women to make home modifications — incrementally, as one’s budget permits — to increase the chances that you’ll be able to stay there longer.

Mr. Perry, of the Opus Advisory Group, suggests an intriguing option: life insurance with a chronic care rider, which permits the policy-holder to spend money for such needs while alive, although doing so will reduce the tax-free death benefit. Still, not all buyers — or their survivors — are willing to sacrifice those benefits.

“The need is still there, no question about it,’’ Mr. Perry said. But long-term care insurance is likely to become much harder for everyone to find and afford, especially women.

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TIMESCAST: PC Industry Shifts as Dell Goes Private

February 6, 2013By Fritzie Andrade, Zena Barakat, Emily B. Hager, Erica Berenstein, Krishnan Vasudevan, Kriston Lewis, Abe Sater and Robin Lindsay

TimesCast Media+Tech: The effects of Dell’s landmark deal. | Kit Eaton reviews video editing apps | The entrepreneur and inventor James Dyson.

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The Lede: Video of Protests Across Tunisia After an Opposition Leader Is Gunned Down

Video of a protest outside the interior ministry in Tunis on Wednesday from the blog Nawaat.

As my colleagues Kareem Fahim and Gerry Mullany report, there were protests across Tunisia on Wednesday following the assassination of Chokri Belaid, a leader of the secular opposition.

Video shot by activist bloggers for the independent Tunisian site Nawaat showed protesters rallying outside the interior ministry on the tree-lined Avenue Habib Bourguiba in Tunis early in the day, and then being chased from the street by police officers who fired tear gas into the crowd and beat demonstrators.

The Tunisian blog Nawaat’s video of police officers attacking protesters in Tunis on Wednesday.

After the avenue was cleared, witnesses reported that a small crowd accompanied the ambulance carrying Mr. Belaid’s body down the same street.

L’avenue vidée par une violente charge policière avant l’arrivée du cortège funéraire

— Maher Tekaya (@MaherTekaya) 6 Feb 13

Les ACAB font tout pour disperser les gens autour de l’ambulance http://t.co/l6ye72HC

— Selim (@Selim_) 6 Feb 13

L’ambulance #ripbelaid http://t.co/r2dsc15p

— Selim (@Selim_) 6 Feb 13

Retour a l’avenue, l’ambulance est la, grande émotion.. http://t.co/k5zxR8Nb

— Amira Yahyaoui (@Mira404) 6 Feb 13

As news of the assassination spread, there were protests in other cities and reports of attacks on the offices of Ennahda, the ruling Islamist party. Mr. Belaid had criticized Ennahda’s leaders for failing to condemn violent attacks on his party’s activists by young Islamists, in a television appearance shortly before his death, the French radio station Europe 1 reported.

Agence France-Presse video showed protesters marching in Sidi Bouzid, the town where the Tunisian revolt began.

More video of the demonstration in Tunis, and a clip of protesters occupying the headquarters of Ennahda in the city of Sfax, was posted online by Jadal, a Tunisian news site set up by the Institute for Peace and War Reporting.

Video from the Tunisian news site Jadal, said to show protesters occupying the offices of the ruling party in Sfax on Wednesday.

A demonstration outside the office of Ennahda in the coastal city of Mahdia was caught on video by a Nawaat blogger.

manifestation ce matin devant le siège d’Ennahdha a #Mahdia #chokribelaid http://t.co/0B3Vp7eK

— Nawaat ~ Tunisia (@nawaat) 6 Feb 13

Before the demonstration at the interior ministry was attacked by the police, activists in the crowd posted updates on the protest on Twitter.

En ce moment à l’avenue. Venez nombreux! http://t.co/8JEZiIat

— Maher Tekaya (@MaherTekaya) 6 Feb 13

“La révolution continue, la mort de Chokri est une leçon pour tous” crit un manifestant http://t.co/Y7cwHEOA

— Selim (@Selim_) 6 Feb 13

Vidéo tremblotante où on voit à la fin qu’ils sont prêts à gazer http://t.co/2MtxaGAW

— Amira Yahyaoui (@Mira404) 6 Feb 13

Among the chants, witnesses reported, were calls for the resignation of the interior minister, Ali Larayedh, a leader of Ennahda who is a former dissident.

“larayedh resignation” is their request http://t.co/HYkBj1nv

— myriam ben ghazi (@myriambenghazi) 6 Feb 13

Mr. Larayedh called the assassination of Mr. Belaid a “terrorist act” and “a blow to the democratic transition experience in Tunisia,” the state news agency reported.

One member of the crowd was Amira Yahyaoui, the president of the rights organization Al Bawsala, who suggested that Tunisians had waited long enough for reform of the hated police force. After Mr. Balaid’s death, she wrote, it was “necessary to go inside the interior ministry and clear out the incompetents and, worse, the facilitators” who had allowed such acts of political violence to take place.

Aujourd’hui il faut entrer a l’intérieur de ministère de l’intérieur et en dégager les incompétents, pire, les facilitateurs. #ChokriBelaid

— Amira Yahyaoui (@Mira404) 6 Feb 13

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Bucks Blog: Many Relying on Home Equity for Retirement

Even though the housing market has not recovered, nearly half of older working Americans expect to use equity in their homes to help finance their retirement, a new survey finds.

Roughly 47 percent of employed Americans ages 50 to 70 said they were relying on equity in their homes, the Retirement Check-In survey from Ameriprise Financial found. The finding is surprising, an accompanying report notes, because housing values in many parts of the country remain below the level they were before the recession. Also, 37 percent of homeowners say they’re not on track to pay off their mortgage before they retire.

More people said they were relying on home equity now compared with before the recession, the report finds. When participants were asked whether, before the downturn, they had expected to rely on home equity to help pay for their retirement, just 39 percent said yes.

While the reason for that shift isn’t entirely clear, the report says its plausible that the loss in value of other investments during the recession may have been so steep that many older workers feel they have no other alternative, even if their homes are worth less than they used to be.

“My hypothesis is that people didn’t think they were going to need to tap into equity because they thought they would have sufficient assets,” said Suzanna de Baca, vice president of wealth strategies at Ameriprise Financial. “Now, despite the fact they have reduced home equity, the shortfall between what they’ve saved and what they need is greater.”

The finding is typical of a “perplexing disparity” between Americans’ emotional outlook for retirement and the reality they face, the report said.

For instance, nearly three-quarters indicated that their dream retirement included taking “really nice vacations.” Yet, when asked if they would be able to afford the essentials in retirement, fewer than half said they felt “extremely” or “very” confident. And just 38 percent said they were confident they could afford the extras they had been anticipating in retirement, like traveling and hobbies.

The telephone survey included 1,000 employed Americans age 50 to 70, with investable assets of at least $100,000 (including employer-based retirement plans, but not real estate) and who are planning to retire at some point. Koski Research conducted the survey on behalf of Ameriprise Financial from Oct. 31 and Nov. 14, 2012. The margin of sampling error is plus or minus 3 percentage points.

What role does home equity play in your retirement plans?

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Well: Warning Too Late for Some Babies

Six weeks after Jack Mahoney was born prematurely on Feb. 3, 2011, the neonatal staff at WakeMed Hospital in Raleigh, N.C., noticed that his heart rate slowed slightly when he ate. They figured he was having difficulty feeding, and they added a thickener to help.

When Jack was discharged, his parents were given the thickener, SimplyThick, to mix into his formula. Two weeks later, Jack was back in the hospital, with a swollen belly and in inconsolable pain. By then, most of his small intestine had stopped working. He died soon after, at 66 days old.

A month later, the Food and Drug Administration issued a caution that SimplyThick should not be fed to premature infants because it may cause necrotizing enterocolitis, or NEC, a life-threatening condition that damages intestinal tissue.

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Catherine Saint Louis speaks about using SimplyThick in premature infants.

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Experts do not know how the product may be linked to the condition, but Jack is not the only child to die after receiving SimplyThick. An F.D.A. investigation of 84 cases, published in The Journal of Pediatrics in 2012, found a “distinct illness pattern” in 22 instances that suggested a possible link between SimplyThick and NEC. Seven deaths were cited; 14 infants required surgery.

Last September, after more adverse events were reported, the F.D.A. warned that the thickener should not be given to any infants. But the fact that SimplyThick was widely used at all in neonatal intensive care units has spawned a spate of lawsuits and raised questions about regulatory oversight of food additives for infants.

SimplyThick is made from xanthan gum, a widely-used food additive on the F.D.A.’s list of substances “generally recognized as safe.” SimplyThick is classified as a food and the F.D.A. did not assess it for safety.

John Holahan, president of SimplyThick, which is based in St. Louis, acknowledged that the company marketed the product to speech language pathologists who in turn recommended it to infants. The patent touted its effectiveness in breast milk.

However, Mr. Holahan said, “There was no need to conduct studies, as the use of thickeners overall was already well established. In addition, the safety of xanthan gum was already well established.”

Since 2001, SimplyThick has been widely used by adults with swallowing difficulties. A liquid thickened to about the consistency of honey allows the drinker more time to close his airway and prevent aspiration.

Doctors in newborn intensive care units often ask non-physician colleagues like speech pathologists to determine whether an infant has a swallowing problem. And those auxiliary feeding specialists often recommended SimplyThick for neonates with swallowing troubles or acid reflux.

The thickener became popular because it was easy to mix, could be used with breast milk, and maintained its consistency, unlike alternatives like rice cereal.

“It was word of mouth, then neonatologists got used to using it. It became adopted,” said Dr. Steven Abrams, a neonatologist at Texas Children’s Hospital in Houston. “At any given time, several babies in our nursery — and in any neonatal unit — would be on it.”

But in early 2011, Dr. Benson Silverman, the director of the F.D.A.’s infant formula section, was alerted to an online forum where doctors had reported 15 cases of NEC among infants given SimplyThick. The agency issued its first warning about its use in babies that May. “We can only do something with the information we are provided with,” he said. “If information is not provided, how would we know?”

Most infants who took SimplyThick did not fall ill, and NEC is not uncommon in premature infants. But most who develop NEC do so while still in the hospital. Some premature infants given SimplyThick developed NEC later than usual, a few after they went home, a pattern the F.D.A. found unusually worrisome.

Even now it is not known how the thickener might have contributed to the infant deaths. One possibility is that xanthan gum itself is not suitable for the fragile digestive systems of newborns. The intestines of premature babies are “much more likely to have bacterial overgrowth” than adults’, said Dr. Jeffrey Pietz, the chief of newborn medicine at Children’s Hospital Central California in Madera.

“You try not to put anything in a baby’s intestine that’s not natural.” If you do, he added, “you’ve got to have a good reason.”

A second possibility is that batches of the thickener were contaminated with harmful bacteria. In late May 2011, the F.D.A. inspected the plants that make SimplyThick and found violations at one in Stone Mountain, Ga., including a failure to “thermally process” the product to destroy bacteria of a “public health significance.”

The company, Thermo Pac, voluntarily withdrew certain batches. But it appears some children may have ingested potentially contaminated batches.

The parents of Jaden Santos, a preemie who died of NEC while on SimplyThick, still have unused packets of recalled lots, according to their lawyer, Joe Taraska.

The authors of the F.D.A. report theorized that the infants’ intestinal membranes could have been damaged by bacteria breaking down the xanthan gum into too many toxic byproducts.

Dr. Qing Yang, a neonatologist at Wake Forest University, is a co-author of a case series in the Journal of Perinatology about three premature infants who took SimplyThick, developed NEC and were treated. The paper speculates that NEC was “most likely caused by the stimulation of the immature gut by xanthan gum.”

Dr. Yang said she only belatedly realized “there’s a lack of data” on xanthan gum’s use in preemies. “The lesson I learned is not to be totally dependent on the speech pathologist.”

Julie Mueller’s daughter Addison was born full-term and given SimplyThick after a swallow test showed she was at risk of choking. It was recommended by a speech pathologist at the hospital.

Less than a month later, Addison was dead with multiple holes in her small intestine. “It was a nightmare,” said Ms. Mueller, who has filed a lawsuit against SimplyThick. “I was astounded how a hospital and manufacturer was gearing this toward newborns when they never had to prove it would be safe for them. Basically we just did a research trial for the manufacturer.”

Read More..

Well: Warning Too Late for Some Babies

Six weeks after Jack Mahoney was born prematurely on Feb. 3, 2011, the neonatal staff at WakeMed Hospital in Raleigh, N.C., noticed that his heart rate slowed slightly when he ate. They figured he was having difficulty feeding, and they added a thickener to help.

When Jack was discharged, his parents were given the thickener, SimplyThick, to mix into his formula. Two weeks later, Jack was back in the hospital, with a swollen belly and in inconsolable pain. By then, most of his small intestine had stopped working. He died soon after, at 66 days old.

A month later, the Food and Drug Administration issued a caution that SimplyThick should not be fed to premature infants because it may cause necrotizing enterocolitis, or NEC, a life-threatening condition that damages intestinal tissue.

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Catherine Saint Louis speaks about using SimplyThick in premature infants.

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Experts do not know how the product may be linked to the condition, but Jack is not the only child to die after receiving SimplyThick. An F.D.A. investigation of 84 cases, published in The Journal of Pediatrics in 2012, found a “distinct illness pattern” in 22 instances that suggested a possible link between SimplyThick and NEC. Seven deaths were cited; 14 infants required surgery.

Last September, after more adverse events were reported, the F.D.A. warned that the thickener should not be given to any infants. But the fact that SimplyThick was widely used at all in neonatal intensive care units has spawned a spate of lawsuits and raised questions about regulatory oversight of food additives for infants.

SimplyThick is made from xanthan gum, a widely-used food additive on the F.D.A.’s list of substances “generally recognized as safe.” SimplyThick is classified as a food and the F.D.A. did not assess it for safety.

John Holahan, president of SimplyThick, which is based in St. Louis, acknowledged that the company marketed the product to speech language pathologists who in turn recommended it to infants. The patent touted its effectiveness in breast milk.

However, Mr. Holahan said, “There was no need to conduct studies, as the use of thickeners overall was already well established. In addition, the safety of xanthan gum was already well established.”

Since 2001, SimplyThick has been widely used by adults with swallowing difficulties. A liquid thickened to about the consistency of honey allows the drinker more time to close his airway and prevent aspiration.

Doctors in newborn intensive care units often ask non-physician colleagues like speech pathologists to determine whether an infant has a swallowing problem. And those auxiliary feeding specialists often recommended SimplyThick for neonates with swallowing troubles or acid reflux.

The thickener became popular because it was easy to mix, could be used with breast milk, and maintained its consistency, unlike alternatives like rice cereal.

“It was word of mouth, then neonatologists got used to using it. It became adopted,” said Dr. Steven Abrams, a neonatologist at Texas Children’s Hospital in Houston. “At any given time, several babies in our nursery — and in any neonatal unit — would be on it.”

But in early 2011, Dr. Benson Silverman, the director of the F.D.A.’s infant formula section, was alerted to an online forum where doctors had reported 15 cases of NEC among infants given SimplyThick. The agency issued its first warning about its use in babies that May. “We can only do something with the information we are provided with,” he said. “If information is not provided, how would we know?”

Most infants who took SimplyThick did not fall ill, and NEC is not uncommon in premature infants. But most who develop NEC do so while still in the hospital. Some premature infants given SimplyThick developed NEC later than usual, a few after they went home, a pattern the F.D.A. found unusually worrisome.

Even now it is not known how the thickener might have contributed to the infant deaths. One possibility is that xanthan gum itself is not suitable for the fragile digestive systems of newborns. The intestines of premature babies are “much more likely to have bacterial overgrowth” than adults’, said Dr. Jeffrey Pietz, the chief of newborn medicine at Children’s Hospital Central California in Madera.

“You try not to put anything in a baby’s intestine that’s not natural.” If you do, he added, “you’ve got to have a good reason.”

A second possibility is that batches of the thickener were contaminated with harmful bacteria. In late May 2011, the F.D.A. inspected the plants that make SimplyThick and found violations at one in Stone Mountain, Ga., including a failure to “thermally process” the product to destroy bacteria of a “public health significance.”

The company, Thermo Pac, voluntarily withdrew certain batches. But it appears some children may have ingested potentially contaminated batches.

The parents of Jaden Santos, a preemie who died of NEC while on SimplyThick, still have unused packets of recalled lots, according to their lawyer, Joe Taraska.

The authors of the F.D.A. report theorized that the infants’ intestinal membranes could have been damaged by bacteria breaking down the xanthan gum into too many toxic byproducts.

Dr. Qing Yang, a neonatologist at Wake Forest University, is a co-author of a case series in the Journal of Perinatology about three premature infants who took SimplyThick, developed NEC and were treated. The paper speculates that NEC was “most likely caused by the stimulation of the immature gut by xanthan gum.”

Dr. Yang said she only belatedly realized “there’s a lack of data” on xanthan gum’s use in preemies. “The lesson I learned is not to be totally dependent on the speech pathologist.”

Julie Mueller’s daughter Addison was born full-term and given SimplyThick after a swallow test showed she was at risk of choking. It was recommended by a speech pathologist at the hospital.

Less than a month later, Addison was dead with multiple holes in her small intestine. “It was a nightmare,” said Ms. Mueller, who has filed a lawsuit against SimplyThick. “I was astounded how a hospital and manufacturer was gearing this toward newborns when they never had to prove it would be safe for them. Basically we just did a research trial for the manufacturer.”

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DealBook: Dell Goes Private in $24 Billion Buyout, Largest Since 2007

9:32 a.m. | Updated

Dell announced on Tuesday that it had agreed to go private in a $24.4 billion deal led by its founder and the investment firm Silver Lake, in the biggest leveraged buyout since the financial crisis.

Under the terms of the deal, the buyers’ consortium, which also includes Microsoft, will pay $13.65 a share in cash. That is roughly 25 percent above where Dell’s stock traded before word emerged of the negotiations of its sale.

Michael S. Dell will contribute his stake of roughly 14 percent toward the transaction, and will contribute additional cash through his private investment firm, MSD Capital. Silver Lake is expected to contribute about $1 billion in cash, while Microsoft will loan an additional $2 billion.

Dell’s board is said to have met on Monday night to vote on the deal. In its statement, the company said Mr. Dell recused himself from any discussions about a transaction and did not vote.

As a newly private company – now more firmly under the control of Mr. Dell – the computer maker will seek to revive itself after years of decline. The takeover represents Mr. Dell’s most drastic effort yet to turn around the company he founded in a college dormitory room in 1984 and expanded into one of the world’s biggest sellers of personal computers.

But the advent of new competition, first from other PC manufacturers and then smartphones and the iPad, severely eroded Dell’s business. Such is the concern about the company’s future that Microsoft agreed to lend some of its considerable financial muscle to shore up one of its most important business partners.

“I believe this transaction will open an exciting new chapter for Dell, our customers and team members,” Mr. Dell said in a statement. “Dell has made solid progress executing this strategy over the past four years, but we recognize that it will still take more time, investment and patience, and I believe our efforts will be better supported by partnering with Silver Lake in our shared vision.”

Still, analysts have expressed concern that even a move away from the unyielding scrutiny of the public markets will not let Mr. Dell accomplish what years of previous turnaround efforts have failed to achieve.

Nevertheless, the transaction represents a watershed moment for the private equity industry, reaching heights unseen over the past five years. It is the biggest leveraged buyout since the Blackstone Group‘s $26 billion takeover of Hilton Hotels in the summer of 2007, and it is supported by more than $15 billion of debt financing raised by no fewer than four banks.

“Michael Dell is a true visionary and one of the pre-eminent leaders of the global technology industry,” Egon Durban, a managing partner at Silver Lake, said in a statement. “Silver Lake is looking forward to partnering with him, the talented management team at Dell and the investor group to innovate, invest in long-term growth initiatives and accelerate the company’s transformation strategy to become an integrated and diversified global I.T. solutions provider.”

Mr. Dell first approached the board about taking the company private in August. That prompted the board to form a special committee, with JPMorgan Chase and the law firm Debevoise & Plimpton as advisers. It was charged with considering alternatives to a management buyout, including other deals or borrowing money to pay out a special dividend.

To help ward off accusations of self-dealing by Mr. Dell, the special committee has hired an independent investment bank, Evercore Partners, specifically to oversee a 45-day “go shop” period in which the company will solicit other potential buyers.

“The special committee and its advisers conducted a disciplined and independent process intended to ensure the best outcome for shareholders,” Alex J. Mandl, the head of the Dell independent committee, said in a statement. “Importantly, the go-shop process provides a real opportunity to determine if there are alternatives superior to the present offer from Mr. Dell and Silver Lake.”

Dell itself was advised by Goldman Sachs and the law firm Hogan Lovells, while Mr. Dell retained Wachtell, Lipton, Rosen & Katz as legal counsel. Silver Lake was advised by Bank of America Merrill Lynch, Barclays, Credit Suisse, RBC Capital Markets and the law firm Simpson Thacher & Bartlett.

On Tuesday, Mr. Dell sent a memo to company employees about the deal. Here is a copy of the memo:

Today, we announced a definitive agreement for me and global technology investment firm Silver Lake to acquire Dell and take it private.

This transaction is an exciting new chapter for Dell, our team and our customers. We can immediately deliver value to stockholders, while continuing to execute our long-term growth strategy and focus on helping customers achieve their goals.

Together, we have built an incredible business that generates nearly $60 billion in annual revenue. We deliver enormous customer value through end-to-end solutions that are scalable, secure and easy to manage, and Enterprise Solutions and Services now account for 50 percent of our gross margins.

Dell’s transformation is well underway, but we recognize it will still take more time, investment and patience. I believe that we are better served with partners who will provide long-term support to help Dell innovate and accelerate the company’s transformation strategy. We’ll have the flexibility to continue organic and inorganic investment, and grow our business for the long term.

I am particularly pleased to be in partnership with Silver Lake, a world-class investment firm with an outstanding reputation and significant experience in the technology sector. They know all the technology business models, understand the value chain and have an extremely strong global network of contacts. I am also glad that Microsoft is part of the transaction, further building on a nearly 30-year relationship.

I am honored to continue serving as chairman and CEO, and I look forward to working with all of you, including our current senior leadership team, to accelerate our efforts. There is much more we can accomplish together. I am committed to this journey and I am grateful for your dedication and support. Please, stay focused on delivering results for our customers and our company.

There is still considerable work to be done, and undoubtedly both challenges and triumphs lie ahead, but as always, we are making the right decisions to position Dell, our team and our customers for long-term success.

Michael

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