Guitar Center To File For Bankruptcy

[GlennO]

He asked that to see what they'd say.

Like asking "Have you stopped beating your wife?"? .

 

[guitarded]

Shame! GC Memphis was always a great place, with very helpful people. Or at least per my many, many experiences with them.

 

[Dave Merrill]

Shame! GC Memphis was always a great place, with very helpful people. Or at least per my many, many experiences with them.

They're not actually going out of business. Closing some stores maybe/probably but keeping on.

 

[AndyOrr]

Never had anything on sale that was worth buying.
Even now at the cusp of bankruptcy.. nothing on sale.
When you go into bankruptcy... isn't there a clearance sale? Kmart went bankrupt and sold everything at over 50% off

It‘s a reorganization, not a liquidation. Besides, MSRP / MAP agreements don’t allow much deviation in price, hence the proliferation “open box” “store demo” stuff you see online. They may be allowed to return inventory to vendors. It’s up to the Creditor’s Committee at this point.

 

[AndyOrr]

That's how bankruptcy works. They get to "renegotiate" the company's debts, otherwise known as welch on them. Anybody they owe money to gets screwed, company comes out in better shape as a result.

It's a profitable manoeuver.

That‘s not exactly how bankruptcy works. Once declared, a bankruptcy trustee has to approve the filing, i.e., the company actually has to be insolvent or at risk of their lenders foreclosing - which could leave nothing for anyone else. They can also claw-back any suspect payments made to executives, vendors, lenders, etc.,

After the company is officially declared insolvent, a Creditor’s Committee is formed and it’s the creditors - the folks who are owed the money - that approve the plan to continue. The Creditors Committee goal is to keep the company afloat while paying the most people. The company relinquishes almost all of it’s financial control in a bankruptcy. Virtually every dollar that goes out while in bankruptcy has to be approved by the Creditors Committee and the bankruptcy judge.

Yes, GC will seek to renegotiate existing debt, possibly nullify some contracts and leases, etc., but only with the approval of the creditors, some of which will surely be working against their own interests at times. Bankruptcy is rarely the sinister practice that some would have us believe. It is methodical and highly visible.

As far as a “profitable maneuver”; what you’re describing is called a “bankruptcy attorney”.