It seems certain now that Circuit City's bankruptcy proceedings are coming to an end as a liquidation, that hope for a reorganization and survival is gone.
The House subcomittee on commercial and administrative law, a panel of the House Judiciary Committee, had planned to take testimony from CC executives with an eye to potential amendments of bankruptcy law but that hearing was cancelled yesterday morning, apparently due to weather.
It appears that the executives wanted to complain largely about the way in which leases are treated under the 2005 amendments. It appears that before that year it was easier than it is now for a debtor to string out an old lease at the expense of its landlord.
Personally, I can't work up any sympathy for CC on that point -- unless there is something to it that I don't yet understand (very possible). But why should debtors be assistesd at the expense of their commercial lessors? Amending the law one way or the other on that point sounds like a zero-sum game to me.
[Subsequent interpolation, 3-5-09: The hearing has been rescheduled for 3-11, Wednesday, at 2 PM].
This is pertinent to general subject of this blog, the use of proxy campaigns to exercise power in and over the corporate suite ... how?
Circuit City is an example of a proxy partisan unheeded. It now appears obvious that the activist investors of HBK Capital Management were in the right a year ago, when they tried to get CC to sell itself to Blockbusters. That would have been the best way to maximize the equity that was then rapidly vanishing.
Showing posts with label Circuit City. Show all posts
Showing posts with label Circuit City. Show all posts
Wednesday, March 4, 2009
Tuesday, January 27, 2009
Three brief items
1. Selectica
Last time we checked in on the Delaware courts, Selectica had doubled the number of shares of common stock held by all of its shareholders except those of its would-be acquirers, Versata and Trilogy. It had also filed a complaint in court looking for a declaratory judgment -- it wants the court to give a goodhousekeeping seal to its actions.
More recently, (January 16) the defendants, Versata and Trilogy, filed their answer, with a copy to the SEC. You can read it for yourself here, I expect I'll discuss it next week.
2. Berndt out at Telular
Telular, a wireless communications company, has settled a pending proxy contest with Simcoe Partners, which owns just over 5% of its stock.
Simcoe's founder, Jeffrey Jacobowitz, will take a seat on Telular's board of directors, and the chairman of that board, John Berndt, will not stand for re-election. A new chairman will be chosen at the first board meeting after the 2009 annual meeting, which will likely take place in March. The announcement is a buit vague about timing. It mentions a 2010 annual meeting in March of that year, and it mentions a 2009 anual meeting upcoming -- so I'm guessing March for the more proximate meeting as well.
3. Circuit City, the electronics chaim that filed for bankruptcy in November, now says it is in talks with two potential buyers in connection with re-organization.
Meanwhile, its stores are holding "liquidation sales" that look suspiciously like those of an operation not too keen on liquidating. Discounts are at 10%, no more. This would make sense if the new buyers actually want to inherit an ongoing enterprise.
Last time we checked in on the Delaware courts, Selectica had doubled the number of shares of common stock held by all of its shareholders except those of its would-be acquirers, Versata and Trilogy. It had also filed a complaint in court looking for a declaratory judgment -- it wants the court to give a goodhousekeeping seal to its actions.
More recently, (January 16) the defendants, Versata and Trilogy, filed their answer, with a copy to the SEC. You can read it for yourself here, I expect I'll discuss it next week.
2. Berndt out at Telular
Telular, a wireless communications company, has settled a pending proxy contest with Simcoe Partners, which owns just over 5% of its stock.
Simcoe's founder, Jeffrey Jacobowitz, will take a seat on Telular's board of directors, and the chairman of that board, John Berndt, will not stand for re-election. A new chairman will be chosen at the first board meeting after the 2009 annual meeting, which will likely take place in March. The announcement is a buit vague about timing. It mentions a 2010 annual meeting in March of that year, and it mentions a 2009 anual meeting upcoming -- so I'm guessing March for the more proximate meeting as well.
3. Circuit City, the electronics chaim that filed for bankruptcy in November, now says it is in talks with two potential buyers in connection with re-organization.
Meanwhile, its stores are holding "liquidation sales" that look suspiciously like those of an operation not too keen on liquidating. Discounts are at 10%, no more. This would make sense if the new buyers actually want to inherit an ongoing enterprise.
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