Bankruptcy Court in Richmond
In the Eastern Edition of Wall Street Journal, an article was published on April 14, 2009 with reports that Circuit City sought the permission of U. S. Bankruptcy Court in Richmond, Virginia to sell the "Circuit City" and "The City" brand names and related Web sites, phone numbers, and trademarks to Systemax Inc. , the same company who bought the CompUSA brand name in 2008. This kind of scenario in the business world is an example of acquisition.
As defined by the Dictionary of Finance and Investment Terms, the term “acquisition” refers to a process where: “…one company taking over controlling interest in another company. Investors are always looking out for companies that are likely to be acquired, because those who want to acquire such companies are often willing to pay more than the market price for the shares they need to complete the acquisition” (2006). In this project, the acquiring company is Systemax Inc while the target company for acquisition is the Circuit City. Systemax Inc.
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(NYSE: SYX) is a Fortune 1000 company and leading retailer of brand name like TigerDirect, CompUSA, MISCO and Global Industrial Equipment, and of private label products including personal computers, notebook computers, consumer electronics, computer-related accessories, technology supplies and industrial products. Systemax sells these products through Integrated Marketing mix such as: branded e-commerce websites, direct mail catalogs, relationship marketers and retail stores. The company also manufactures and sells personal computers under the Systemax logo and computer components under the Ultra Products brand.
The company reach extends to a wide range of customers from individual consumers, to small-to-medium sized businesses, to major corporations, to government organizations and to the educational market. On the other hand, Circuit City Stores, Inc. (Pink Sheets: CCTYQ) used to be the second largest U. S. electronics retailer, after Best Buy in brand-name consumer electronics, personal computers, entertainment software, and large appliances. At the time of liquidation, there were 567 Circuit City Superstores nationwide with store size ranging from 15,000 to 45,000 square feet (1400 to 4000 m?
), when the company announced total liquidation. When the company filed for Chapter 11 bankruptcy in November 2008, an additional 155 stores were closed with the intent of continuing business operations. However, as a consequence of global economic recession during the late 2000s, the lack of consumer spending and overall economic downturn resulted to the demise of the company. When the company shut operation, a small staff remains active at corporate headquarters to complete the company's business such as the termination of its many leases, and the sale of its company-owned real estate and Canadian subsidiary.
From the acquisition and take over that happened between Systemax Inc. and Circuit City, we can now see how the managers of these two companies strategically implemented their business plans and goals. As for the Systemax Inc, the bankruptcy of Circuit City is a blessing not only because a giant competitor has closed operations, it can now enjoy the existing infrastructures and other stakeholders of the said company. With 14 million dollars cash plus a share of future revenue generated from those assets over a 30-month period, the managers of Circuit City can now address its internal concerns with the employees and customers.
The employees can now receive separation payments as deemed by the Labor laws and the customers can now ask for refunds for the defective products sold at Circuit City. References ACQUISITION. (2006). In Dictionary of Finance and Investment Terms. Hauppauge, NY: Barron's Educational Series. Retrieved May 18, 2009, from http://www. credoreference. com. ezproxy. stedwards. edu:5000/entry/barronsfin/acquisition Morath, E. (2009, April 14). Circuit city aims to sell brand name to systemax. Wall Street Journal (Eastern Edition), p. B. 6. Retrieved May 18, 2009, from Wall Street Journal database. (Document ID: 1678320131).
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Bankruptcy Court in Richmond. (2016, Aug 14). Retrieved from https://phdessay.com/bankruptcy-court-in-richmond/
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