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Big bankruptcies top state news


HELENA - The bankruptcy filings of two prominent companies that emerged from the breakup of the former energy giant Montana Power Co. ranked as the top news story in Montana during 2003.

The bankruptcy liquidation of Butte-based Touch America, the telecommunications subsidiary of Montana Power, and the bankruptcy reorganization of the South Dakota-based NorthWestern Corp., which bought Montana Power's transmission and distribution system, were together voted the No. 1 news story by journalists at Associated Press member newspapers and broadcast stations in Montana.

Rounding out the top 10:

2. Wildfires blacken more than 650,000 acres.

3. Gov. Judy Martz decides not to seek a second term.

4. Drought continues to grip much of the state.

5. The Legislature uses a combination of spending cuts and tax increases to erase a $230 million deficit.

6. Discovery of mad cow disease in Alberta closes the U.S.-Canadian border to live cattle shipments.

7. A former director of the state crime lab comes under heavy criticism after a second man convicted largely on the director's testimony is proven innocent.

8. The Environmental Protection Agency decides that cleanup of a stretch of the Clark Fork River will include removal of the Milltown Dam.

9. Montana gets $73 million in federal relief funds.

10. A shooting spree that begins in Ennis with seven people shot outside a bar ends hours later along the Idaho border in another shootout with law enforcement.

1. Bankruptcies

In June, after a string of setbacks following its conversion from the Montana Power Co., and months of speculation that the company couldn't survive, Touch America Holdings Inc., filed for federal bankruptcy protection in Delaware. Chairman and CEO Bob Gannon said the decision was ''based on the continuing uncertainty about our liquidity.'' Touch America's financial turmoil began almost immediately after the March 2000 announcement that the 90-year-old Montana Power was giving up its electricity monopoly in much of the state to focus instead on its then-fledgling Touch America telecommunications offshoot. Montana Power sold its energy properties for about $1 billion in cash, investing most of it in laying 24,000 miles of fiber-optic cable. That conversion, however, came just as the telecom industry fell flat. The situation worsened for the company last summer when Touch America's stock fell below $1 a share and never recovered, prompting its delisting from the New York Stock Exchange in March, 2003. In November, a federal bankruptcy judge gave final approval to the sale of most of Touch America's assets to 360networks of Vancouver, British Columbia. NorthWestern Corp., the Sioux Falls, S.D. company that bought Montana Power's transmission and distribution systems, filed for bankruptcy reorganization in September after struggling for months to get back on track. Its Montana subsidiary, NorthWestern Energy, provides electricity to about 300,000 customers in Montana, and natural gas to about 157,000. Company officials have said the reorganization should not disrupt service to Montana customers.

2. Fires.

The 2003 wildfire season started early and ended with more than 650,000 acres across the state burned. The season was so intense that at one time, more than a dozen major fires were burning. Blazes forced repeated temporary closures of popular areas of Glacier National Park, where about 140,000 acres burned. Fires also forced temporary evacuations of residents near Lincoln, Missoula and Condon. Despite the number of fires, no lives were lost and only about 10 homes burned, compared with some 320 homes and other buildings destroyed in 2000.

3. Martz Re-election.

Republican Gov, Judy Martz, who had labored under low job approval ratings most of her first term, announced in August that she would not run for a second term. In her announcement, Martz said she wanted to spend more time with her family and insisted that her sagging popularity was not a factor in her decision. Four men entered the GOP primary to take on the only announced Democratic candidate for governor, Brian Schweitzer.

4. Drought.

Farmers in much of the state continued battling with a relentless drought. Federal agriculture officials said crop losses for 2003 likely won't be as high as in 2002, but that was the worst loss year since 1985. In December, U.S. Agriculture Secretary Ann Veneman declared the state a drought disaster area, making way for affected farmers and ranchers to apply for emergency loans.

5. Budget.

The Montana Legislature used a combination of spending cuts and tax increases to erase a $230 million state deficit. The budget was praised by supporters as a worthy achievement in light of the state's financial woes, but condemned by critics as an inadequate plan laced with temporary fixes that will leave the next Legislature in the same budget squeeze once again. The budget combined about $70 million in spending cuts and relied on about $75 million in sales tax increases.

6. Mad Cow.

Discovery of a cow with mad cow disease in Alberta led to the closure of the U.S.-Canadian border to live cattle shipments and, for a short time, even beef from Canada. Officials later learned that five bulls from the Canadian herd linked to the cow that tested positive were shipped to Montana. Officials confirm, however, that none of the bulls showed any symptoms of mad cow disease.

7. Crime Lab Director.

A former director of the Montana State Crime Lab came under heavy criticism after a second man convicted largely on the director's testimony about hair samples is exonerated of a 13-year-old rape charge. An audit by the state attorney general's office later identified at least five more instances in which Arnold Melnikoff may have given questionable testimony on hair samples. A report by the Washington State Patrol, where Melnikoff now works, concluded Melnikoff performed shoddy work at the Spokane crime lab and should be fired. He currently is on paid leave.

8. Milltown Dam.

The Environmental Protection Agency decided in April that the aging Milltown Dam at the end of the nation's largest Superfund site should be removed under the proposed cleanup of tons of mine waste that washed down the Clark Fork River for decades. The cost - which includes removing contaminated sediment, tearing down the dam, restoring the confluence of the Clark Fork and Blackfoot rivers, and restoring vegetation - is estimated at $95 million.

9. Federal Relief.

Montana received $73 million in federal relief funds, but it sparked disputes between Democrats and Republicans over how and when most of the money should be spent. Gov. Judy Martz settled the question, ordering most used to pay state firefighting costs and much of the rest set aside for next year's fire season. Higher education got $2.7 million, which the Board of Regents decided in December to use to help financially struggling Montana students stay in college.

10. Shootout.

A gunman opened fire on a crowd outside an Ennis bar in June, killing one man and injuring six other people. The suspect, later identified as a ranch hand, George H. Davis, fled. He shot and wounded a Ravalli County deputy sheriff who stopped him hours later in the Bitterroot Valley. Davis was finally stopped near the Idaho border after a vehicle chase and another shootout. He was wounded while exchanging gunfire with police and remains jailed on charges of murder and attempted murder.


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