Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Politics : Sioux Nation -- Ignore unavailable to you. Want to Upgrade?

To: Travis_Bickle who wrote (161906)	2/27/2009 6:41:36 PM
From: koan	Respond to of 362361

Who?

To: Travis_Bickle who wrote (161906)	2/27/2009 9:10:33 PM
From: stockman_scott	Respond to of 362361

Bankruptcy Code Changes Considered to Avoid Circuit City Redux By Lauren Coleman-Lochner Feb. 27 (Bloomberg) -- Lawmakers are considering changes to the U.S. bankruptcy code that would give retailers more time to find a buyer or restructure and avoid going out of business, according to a person familiar with the proposed legislation. A hearing scheduled for March 3 will examine whether to eliminate the 210-day limit retailers have to determine which store leases to keep, said the person, who declined to be identified because the content of the hearings isn’t public. “The 210-day period is too short to make a meaningful and informed decision on whether to assume that lease,” said Jack Williams, a law professor at Georgia State University who is also resident scholar at the American Bankruptcy Institute. Proponents of the plan say current rules are causing creditors to press for quicker sales of companies and making liquidation more likely, as in the case of Circuit City Stores Inc. The session being held by the House Subcommittee on Commercial and Administrative Law next week is entitled “Circuit City Unplugged: Why Did Chapter 11 Fail to Save 34,000 Jobs?” Also to be discussed at the hearing is whether to lift a requirement that companies in bankruptcy pay in full for any goods they received within 20 days of a filing, the person said. Separately, an 18-month deadline for companies to file reorganization plans before creditors can produce competing plans will be reevaluated, according to the person. 210 Days Funding for operations during bankruptcy is tied “in one way or the other to the 210 days,” said Lawrence Gottlieb, a bankruptcy attorney at Cooley Godward Kronish in New York. That means creditors push for a sale or disposition in the first two months, reasoning that a going-out-of-business sale will take four or five more. The current lease-limit rule was part of a broader overhaul of the bankruptcy code in 2005. For landlords, the lack of a deadline before the 2005 act produced “the inability to plan your future,” said Howard Brod Brownstein, a principal in NachmanHaysBrownstein, a Narbeth, Pennsylvania restructuring firm. “Landlords were kind of stuck.” Brownstein said he thought the 2005 change corrected an imbalance. Retailers can identify stores they want to close before filing Chapter 11, he said. Circuit City Circuit City Stores, the consumer-electronics chain that began selling televisions in 1949, started going-out-of-business sales last month at its 567 U.S. stores. Revenue declines that started when Best Buy Co. and Wal-Mart Stores Inc. began offering TVs and computers at lower prices deepened as the U.S. entered a recession and vendors demanded that Circuit City pay up front for their goods. On Nov. 10, the Richmond, Virginia-based chain filed for bankruptcy protection after suppliers cut off credit. At the time, Circuit City, which employs more than 30,000 people in the U.S., planned to continue operations after exiting Chapter 11. Negotiations with prospective buyers failed, and the company agreed to hand its U.S. merchandise to a group of liquidators. To contact the reporter on this story: Lauren Coleman-Lochner in New York at llochner@bloomberg.net. Last Updated: February 27, 2009 00:01 EST