PhillyDeals: Plenty of anger over Pizzi's Tasty Baking payment, but ...

The last employment contract for Charles Pizzi, the Tasty Baking Co. boss, called for him to collect more than $3 million in the event the company was sold.

The $4-a-share offer by Flowers Foods is great news for anyone who bought the stock after it collapsed this winter. But it's a disappointing discount from where the stock traded for most of the last 20 years.

Angry readers keep calling, posting, and e-mailing to ask why Pizzi deserves anything for being at the helm when the ship ran onto the rocks.

He was the prime mover of the $80 million, partly state-financed new Navy Yard bakery that failed to deliver higher profits on schedule, forcing Tasty's sale to the Southerners responsible for Mrs. Freshley's sugar-coated buns.

If I were a longtime Tasty shareholder, I'd feel burned. But let's compare Tasty's story with the other corporate sell-offs that have carved holes in this town.

When CoreStates Financial Corp., Philadelphia's last big bank, stopped growing, chief executive Terrence Larsen and his board did the sensible thing: They sold to the former First Union Corp. at a price that still stands as an industry high-water mark, given the size of the deal.

Result: Larsen pocketed $50 million, plus $3 million a year. First Union's share price soon fell, and never recovered. More than 10,000 Philadelphia-area workers lost their jobs.

When Schmidt's owner Billy Pflaumer got sent away for tax evasion, he sold the aging Girard Avenue brewery to G. Heilman, which promptly shut it down and threw everyone out of work.

Bell Atlantic, Conrail, PSFS - all sold and whacked and moved. We got a hundred of them.

But Flowers boss George Deese didn't buy an aging brewery or a staffed-up back office running dated middleware. He got a new plant, and he says he plans to keep it running, with its 700-plus bakers and other workers, and more than 400 contract drivers, who are themselves small-business owners with six-figure investments in their routes.

Flowers says it isn't looking for ways to boost production. And it has promised to pay back Pennsylvania taxpayers and other Tasty creditors, which Flowers, unlike Tasty, can afford from its cash flow.

This isn't economist Joseph Schumpeter's "creative destruction," the process by which capitalism replaces losers with winners, given time.

It's not necessarily the highest and best use for the private and public millions risked lending to Tasty - though lenders now stand to be repaid, with interest.

A responsible board likely would not have taken a chance on a new plant, if it knew how things would turn out. Instead, Tasty could have sold its brands to a buyer who would have shut its aging Hunting Park plant, and gotten a better price for shareholders.

But the new plant got built.

Result: Unlike the many ex-Philly CEOs who took their millions and ran, Pizzi will leave something substantial here.

Shares of both Tenet Healthcare Corp. and Community Health Systems fell Monday after Tenet sued Community, alleging "systematic" Medicare fraud at Community's 150 hospitals.

Community illegally told Medicare it had "admitted" thousands of emergency-room patients each year, who in reality were outpatients waiting for test results and other basic services, says Tenet's suit. That allowed Community to collect thousands of extra dollars per visit, without providing extra care, according to the lawsuit, filed in federal court in Dallas.

Texas-based Tenet says Community's practices leave it liable to federal action, raising questions about Community's ability to go through with the unsolicited $6-per-share, $3.3 billion takeover offer it launched for Tenet last winter.

In a statement, Community called Tenet's allegations "without merit, unfounded and irresponsible," and part of a "self-serving entrenchment strategy" designed to "distract Tenet shareholders from [Community's] pending offer."

Community disclosed in February that its Medicare emergency-room billing procedures were under investigation by the Texas Attorney General's Office.

Tenet is a national hospital chain that owns Hahnemann Hospital at Drexel University and St. Christopher's Hospital for Children. Community is a larger chain of smaller and suburban facilities including, locally, Chestnut Hill Hospital in Philadelphia and others in Coatesville, Phoenixville, Jennersville, Pottstown, and Salem.

Tenet says it discovered the Medicare classification problems while reviewing Community financial documents. Analysts said Community plans layoffs and cutbacks that would shave as much as $400 million from Tenet's $9 billion annual budget - if the deal goes through.