Circuit City Files Chapter 11

NEW YORK (AP) -- Circuit City Stores Inc., the nation's second-biggest electronics retailer, filed for bankruptcy protection on Monday but plans to stay open for business as the busy holiday shopping season approaches.

It filed under Chapter 11 of the bankruptcy code, which will allow it to hold off creditors and continue operations while it develops a reorganization plan.

The Richmond, Va.-based company has been struggling as nervous consumers spend less and credit has become tighter, and the retail industry overall is facing what's expected to be the weakest holiday season in decades.

Circuit City also said it would cut 700 more jobs, after announcing a week ago that it would close 20 percent of its stores and lay off thousands of workers.
"This isn't a surprise," JPMorgan analyst Christopher Horvers said, adding that the reorganization could help the company get out of leases for certain bad store locations.
Circuit City, which has had only one profitable quarter in the past year, has faced significant declines in traffic and heightened competition from rival Best Buy Co. and others. It said it decided to file for bankruptcy protection because it was facing pressure from vendors who threatened to withhold products during the holiday season.

"At the end of the day I think it's really about an inventory position," Horvers said. "If they can get inventory into the stores, I can think they'll remain competitive."
The company's biggest creditors are its vendors: Hewlett-Packard has a $118.8 million claim followed by Samsung ($115.9 million), Sony ($60 million), Zenith ($41.2 million), Toshiba ($17.9 million) and others. Smaller creditors include GPS navigation system maker Garmin, Nikon, Lenovo, Eastman Kodak and Mitsubishi.

Horvers added, "I think it's encouraging that they were able to secure financing." Circuit City said it had lined up $1.1 billion in loans to provide working capital while it is in bankruptcy protection. That replaces a $1.3 billion asset-backed loan it had been using.
Loans to operate while in bankruptcy are called debtor-in-possession, or DIP, loans.
"That's a big DIP in the current market," said John Penn, a partner at Haynes & Boone who is not involved in the case. "To secure that size DIP now is quite a achievement. With the news of the cuts last week -- and vendors wanting to know they can get paid -- having a recognizable source like a DIP can calm a lot of vendor concerns."
The company said in its filing that it had $3.4 billion in assets and $2.32 billion in liabilities, as of Aug. 31.

Circuit City Stores Inc. announced a week ago it planned to close 155 of its more than 700 U.S. stores by Dec. 31. The stores are spread throughout 28 states, including multiple locations in areas like Phoenix and Atlanta. It is laying off about 17 percent of its domestic work force, which could affect up to 7,300 people.
The company also said last week that it will further cut back on new store openings and planned to work with landlords to renegotiate leases, lower rent or terminate agreements while it dealt with tightening credit from its vendors.

Circuit City posted a wider second-quarter loss in September with a 13 percent decline in sales at stores open at least a year. The company has been under new leadership since late September when Chief Executive Philip J. Schoonover agreed to step down. He was replaced by James A. Marcum, who is now vice chairman and acting president and chief executive.
Shares in Circuit City have traded under $1 for more than a month and the company received a warning about that last month from the New York Stock Exchange.
AP Business Writer Michael Felberbaum in Richmond, Va., contributed to this report.

Source: yahoo!

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The financial crisis is yet to be over and has already swallowed another victim. At this time, Circuit City (CC) is trading at USD 0.11 (-56%) compared to arch-rival Best Buy (BBY) at USD 26.89 (+5.08%)

As bad as it is at the moment, I think that it's a catalyst that we all need to differ the strong and the weak, the good and the bad. There's always a reason behind everything no matter how bad or good it is.

Best Buy store in New York City

3 Bali Bombing Convicted Were Executed By Firing Squads

Bali bombing victim's survivors and their families can now feel at least relieved after Indonesia government executed the three convicted bombers. It was held at Central Java province, just 15 minutes from Nusa Kambangan prison complex.

The three were faced by 3 firing squad from the national police department and shot to death at exactly midnight local time. Although the news are already widespread, the authority still refused to issue a statement regarding confirmation of the execution result until morning.

Bali bombing happened in October 2002 and it tore down 2 cafes, the Paddys and Sari Club which at that time were packed with tourists, mostly Australian. About 200 were killed and more than 300 were left with injuries. Bali tourism experienced sharp decline after the incident and the world condemned the action.

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I myself condemn the act of terrorism in any magnitude for whatever reason, especially if the act cost human lifes. And truly i feel sorry for the victims and their families and friends having to bear the pain for the rest of their life.

What disturb me is, I don't really know whether the concept of death sentence is effective on fighting crimes or terrorism. If one of my loved one was a victim, I would probably want to see the convicted put to death. Thinking clearly and honestly however, I still don't think that death penalty will put an end to any of those vicious circle.

The more effective approach would be a socialization of principles or ideology since the start especially to the young ones. It is the wrong ideology that leads to horrifying act like this.

What do you think? Do you agree or disagree with the effectiveness of death penalty?