PhillyDeals: Chesco firm sues NASA over experiments

A Chester County firm that made a deal with

NASA

to do research in space has sued the government for $21.6 million in damages, six years after the space shuttle

Columbia

broke apart, killing its crew, scattering its payload over Texas and stalling both the shuttle program and the firm's plans to profit from space-based industry.

Instrumentation Technologies Associates Inc., now based in Downingtown, says it developed a way to grow crystals of urokinase, an enzyme that is used in treatment of blood clots, in the weightless environment of earlier shuttle trips. Urokinase, the suit contends, also had potential as a cancer treatment.

ITA hired staff to prepare new missions, before NASA bungled the Columbia recovery and suspended new flights, according to the lawsuit and John Cassanto, company chairman and chief executive.

"Everybody's laid off," he said yesterday. "We're a small business. We were not insured. We put all our eggs into Columbia."

It's not just the crash, according to the lawsuit: The firm's experiments hit Earth intact, but the crystals dissolved when NASA wouldn't let the company recover or properly store its equipment, which was dumped in a NASA warehouse for three months.

Cassanto said he's had to let go more than 30 scientists, engineers, technicians and support workers at the firm, which he started in 1985 with a Pennsylvania state grant. It began using NASA flights in 1991, and tried to negotiate a settlement for four years before filing suit.

NASA spokesman Mike Cabbage said the agency doesn't comment on litigation. He confirmed NASA had paid SpaceHab Inc., of Houston, $8 million when it lost research equipment with Columbia - about 10 percent of what SpaceHab asked for in a lawsuit that was later withdrawn.

Liberty Property Trust kept its buildings more than 90 percent full through the end of last year. But its hard-pressed tenants are starting to demand free rent.

The company, which built the Comcast tower and owns office parks in Malvern, Horsham, South Jersey and around the country, sacrificed growth plans to cut costs and boost profits, to $52 million last quarter from $36 million a year ago, in the face of an ugly property market.

Liberty said yesterday that it sold property, reduced its dividend, sold stock and used proceeds to pay down debt, and trimmed day-to-day expenses to keep its numbers up, preparing for the worst.

"Two thousand and nine will be a very tough year," chairman and chief executive William P. Hankowsky told investors in a conference call.

To prepare, Liberty sold off five properties worth $41 million in the fourth quarter, and collected a $1.6 million penalty when the sale of a South Jersey property didn't close. Last month, Liberty sold six buildings near Greenville, S.C., for another $35 million. It expects to raise another $50 million from sales by the end of April, said chief investment officer Michael Hagan.

There's limits to what a company can sell, said chief financial officer George Alburger Jr., under analysts' questioning. "The land market," he said, "is very, very thin. . . . People are having a hard time figuring out what land values are. But they're down."

Meanwhile, "very few tenants are expanding," said chief operating officer Robert E. Fenza. Most companies - more than two-thirds - renewed leases instead of trading up or going elsewhere.

Big national tenants have begun asking for a month each year "free" at recent rents, Fenza added. "I'm not saying we're giving it, but that's what generally they're looking for."

Shares of

PNC Financial Services Group

fell yesterday when Pennsylvania's largest bank said it lost a quarter-billion dollars last quarter and will cut 5,800 jobs, both due to its takeover of

National City Corp.

, of Cleveland.

PNC says it will end "redundant" jobs. It won't say, for now, what happens to National City's Philadelphia-based corporate-lending group, which is headed by a group of former Philadelphia National Bank lenders; or NatCity's busy Special Situations Group, which focuses on distressed companies from its offices in West Conshohocken.

PNC expects "the U.S. economy will remain in severe recession with unemployment well in excess of 8 percent," chief financial officer Richard J. Johnson told investors in a conference call. That means more loan losses, but also more companies looking for "traditional bank financing," now that other financial markets have dried up.

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