1. I've Got a Secret

You ever have one of those moods where you say, "I'm going to make a phone call. And this very phone call will initiate a chain of events that, five years from now, will culminate in a landmark Supreme Court decision"?

Yeah? Well, neither do we.

Anyway, we at the Five Dumbest Things Research Lab got all obsessed this week about the Supreme Court decision handed down regarding Victoria's Secret.

On Tuesday, the court unanimously ruled that a guy named Victor who sells sex toys in Elizabethtown, Ky., is allowed to call his store Victor's Secret. Victoria's Secret owner

Limited Brands

(LTD)

can stop him only if Limited can actually prove he has diluted the strength of Victoria's Secret trademarks, which the court said Limited hadn't.

What got us interested in the case, aside from our preadolescent sense of humor, was how it all began. As the court reported in its decision, when the store opened back in 1998, it placed an ad in a newspaper delivered to residents at the Fort Knox military base. An army colonel, offended by the store's merchandise and the similarity of its name to Victoria's Secret, called up Limited, then faxed the company a copy of the ad. The lawyers took it from there.

Victory!
Move over Victoria, a new man's in town

Gosh, are we jealous. We write about Dumb ads all the time at the research lab, but none of them ever end up in writs of certiorari. So we wanted to ask that same Army colonel how it felt to make a phone call, then have somebody make, um, well, a federal case out of it.

The colonel, reached this week at an undisclosed location, allowed that he had some opinions about the case, but had no interest in sharing them with us. Thus, we're reduced to perusing a sworn deposition the colonel, himself an attorney, made in 1999. "I was both professionally and personally offended by defendants' use of a bona fide, reputable company's trademark to promote defendants' unwholesome, tawdry merchandise -- that is, 'adult' novelties and gifts.

"Moreover," continued the colonel, "since my wife ... and 17-year-old daughter ... both shop at Victoria's Secret, I was further dismayed by defendants' effort to associate itself with, trade off on the image of and in fact denigrate a store frequented by members of my family."

Oh, the outrage!

Meanwhile, the research lab is flabbergasted that no one has commented on how Victor's Secret actually

strengthens

the Victoria's Secret brand. We call your attention to how Victor's famous ad announces the store's grand opening "Just in time for Valentine's Day!" Loyal readers of our research may remember how last year our local Victoria's Secret

opened up within days of Valentine's Day -- but, unfortunately for everybody, days

after

.

Oh well. To Victor go the spoils.

2. Old News at Adelphia

Speaking of wacky court cases, we were fascinated to read a filing this week in the bankruptcy proceedings of

Adelphia Communications

(ADELQ)

. Somewhere in the middle of its 78 pages, we began to feel a wee bit less morose about

The New York Times

scooping us in January.

Some words of explanation. On Jan. 8, we at the lab -- along with all the other reporters covering the ill-fated cable operator -- simultaneously marvelled with admiration and seethed with jealousy over an Adelphia story in the

Times

written by Pulitzer Prize-winning reporter Gretchen Morgenson.

If ever a story resonated with the outrage over sky-high executive pay against the backdrop of shareholder losses, Morgenson's story was it. Headlined "A New Route to Riches at Adelphia," the piece examined employment contracts for two executives slated to revive Adelphia, which filed for bankruptcy protection last year.

Not only were the two men, William Schleyer and Ronald Cooper, set to receive as much as $65 million for two years -- an eye-popping amount for a relatively brief commitment. But also, noted the

Times

, the benchmark in the contract for determining bonus payments for their work was set ridiculously low. "This sets up the possibility," wrote Morgenson, "that Mr. Schleyer and Mr. Cooper could receive significant payouts for creating little value at the company."

In comparison, Morgenson wrote, another executive contract for a well-known bankruptcy turnaround -- the deal for Michael Capellas to take the helm of

WorldCom

(WCOEQ)

-- was both less generous and more intelligently structured.

Like the proverbial cavalry, the Jan. 8 Adelphia story arrived just in time to stave off disaster, a

Times

reader might assume. The generous payouts would take place "if the terms of the employment contracts are approved at a board meeting today," wrote Morgenson. The terms of the contracts weren't public, but were obtained by the

Times

"from someone involved in Adelphia's hiring process." The implication being that publicity of the shameful terms might shame Adelphia into doing the right thing.

Ah, nothing like the disinfecting power of sunlight to clean up corporate America.

Except there's a small problem with this scenario. By the time the

Times

warned of the contracts, Adelphia's board had already rejected them. That's the conclusion, at least, of U.S. Bankruptcy Judge Robert Gerber, who discusses the

Times

article in the opinion he issued Tuesday approving the contracts ultimately negotiated by Schleyer and Cooper.

As early as Dec. 30, Adelphia Chairman "Erkie" Kailbourne sent other board members a memo comparing the Schleyer and Cooper contracts unfavorably to Capellas', writes Gerber. And by the night before Morgenson's story appeared, Adelphia's board had agreed to reject the contracts. (The ones approved this week, in fact, were closely modeled on the Capellas deal.)

Old News Travels Fast
Read all about it -- after the fact

In other words, Morgenson did the journalistic equivalent of yelling, "The Russians are Coming! The Russians are Coming!" -- but she did it one day after the Russians left.

OK, OK, let's give Morgenson the credit she's due. First off, she managed to obtain some delicious reading -- contracts that prove once again that when U.S. executives focus on their salaries, their grandiosity knows no bounds. Second, the official kibosh on the original contracts likely didn't come until after her expose had been filed.

Plus, it's plausible that the original contracts still had a fighting chance. When Morgenson spoke to the Research Lab this week, she raised the possibility that her pesky prepublication questions about the original contracts may have crystallized private opinion against their terms. The Adelphia people she spoke to in her research "certainly" never told her the pay package was ancient history, says Morgenson. "I remember they were still defending the contract off the record," she says.

3. Trying to Make a Killing in the Market

Speaking of court cases, Philadelphia-area broker Joel Sandler sure had some strange ideas about preservation of wealth.

The onetime Merrill Lynch employee was sentenced Tuesday to eight-and-a-half to 25 years in jail, after a January conviction for attempted murder and other crimes.

Back in March 2001, Sandler was unhappy about the prospect of splitting his $4 million-plus fortune with Mrs. Sandler, who had told him she was seeking a divorce, according to the

Philadelphia Daily News

.

So, in what prosecutors said was an effort to avoid the costs of a divorce, Sandler hired someone he thought was a hit man to kill his wife. (The hit man was actually an undercover cop.)

Caught Red-Handed
Money isn't always everything

It's unclear how much of his money Sandler will have left once he serves his jail time. But at least he can console himself with the power of compound interest.

4. Fries on the Prize

Good news

McDonald's

(MCD) - Get Report

customers! The beleaguered Happy Meal retailer announced Thursday that it has instituted new security protocols "to protect and ensure the integrity of its promotional games."

Perhaps you'll remember what brought this on. Back in 2001, the FBI broke up what it called a six-year scheme to rig contests at the fast-food chain. Evidently, that effort you once put in to collect Monopoly game pieces was all for naught. The fix was in.

"With the new security protocols," says a McDonald's executive in a statement, "we can ensure that McDonald's customers will have a fair chance to win exciting and fun prizes when they visit our restaurants."

Great. Instead of a zero chance of winning a million bucks, you now have a 1-in-10,000,000 chance.

5. In Search of Excellence. Search and Destroy, That Is.

We've already pointed out one of

Circuit City's

(CC) - Get Report

latest moves to make its stores more customer-friendly:

staffing them with

fewer

salespeople.

But wait. There's more.

As several papers have reported, the electronics chain came up with an outside-the-box way of deciding which salespeople to keep on staff and which to let go.

Guess what? It laid off the salesmen earning the highest commissions. As in, it got rid of the salespeople who sold the most merchandise.

Um, isn't that what good salespeople are supposed to do? Sell stuff?

OK, OK, OK. There is some kind of logic behind firing top performers.

As a spokesman explained to us, times have changed. Product prices are rapidly declining. Shoppers come into stores with a lot of knowledge about prospective purchases. "We needed to adapt to the marketplace," says the spokesman, "and, unfortunately, from an economic standpoint we could not afford to pay certain wages to sell DVD players

priced under 60 bucks."

But still. What kind of message is the company sending to the remaining employees?

One formerly successful Circuit City salesman, now an unemployed one, says of the survivors, "They've been rewarded for their mediocrity."

If that isn't a valuable lesson in corporate America, what is?