For Businesses Big and Small, It's Lights Out

[Joanne98]

By Annys Shin
Washington Post Staff Writer
Sunday, January 18, 2009; A01

With the economy in the tank, companies are doing all they can to stay afloat. For many, though, even the most desperate measures have not been enough.

Former giants in American business have recently tilted into extinction. Circuit City announced Friday it would follow Linens 'n Things and Sharper Image into liquidation and sell its assets. Over the next two years, analysts say, countless other businesses will simply fade away.

"This is now an unprecedented time as far as how bad things have gotten," said Scott Peltz, managing director of RSM McGladrey, a consulting firm that helps turn around troubled companies.

The number of business bankruptcy filings rose sharply in 2008, with 31 percent more companies looking to liquidate -- instead of just restructure their debt -- in the third quarter than in the first.

They have little choice. Many companies are loaded down with debt amassed in the days of easy money. Servicing that debt is harder because of falling revenue. Lenders, facing their own troubles, are not as eager to refinance. And the buyers that can afford an acquisition right now are few and far between.

Circuit City, for instance, filed for Chapter 11 bankruptcy protection in November and tried to strike a deal with lenders while it also looked for a buyer. On Friday, just over two months later, it said that both of those efforts failed, and that it would close its remaining 567 locations, putting more than 30,000 people out of work.

The Richmond retailer owes its creditors more than $2.3 billion, making it one of 146 companies with at least $100 million in liabilities that filed for bankruptcy last year, according to statistics from Edward Altman, a corporate finance expert at New York University's Stern School of Business. In 2007, 38 companies with assets greater than $100 million filed.

Continued>>>
http://www.washingtonpost.com/wp-dyn/content/article/2009/01/17/AR2009011702689_pf.html

[ayeshahaqqiqa]

1. A local shoe store is calling it quits

after decades on the square. The antique mall next door to it closed last month, as did the formal wear shop. The health food store closed late last year, and the clothing store near it is also gone. What was once a vibrant downtown now has a lot of empty buildings. And the mall on the outskirts of town now boasts only two stores--Penney's and Maurice's. I'm wondering how long before they leave or go out of business.

[acmavm]

2. Dammit! This is where the reat of the bailout money should go. It's only

right and just to save these small businesses from the rapacious and vicious behavior of the Wall Street criminals.