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A judge ruled that Circuit City can sell its trademarks and Web domain for $14 million. (Globe Staff Photo / Jonathan Wiggs) |
Bankrupt retailer can sell its brand
Bloomberg News
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May 14, 2009
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NEW YORK - Circuit City Stores Inc., the bankrupt electronics retailer that closed its US stores in March, won court approval to sell its trademarks and Internet domain names to computer seller Systemax Inc. for $14 million.
Bankruptcy Judge Kevin R. Huennekens in Richmond, approved the sale yesterday. Systemax was the so-called stalking-horse bidder at an auction Monday to consider competing offers.
Circuit City, based in Richmond, sought court protection in November during a deepening US recession that claimed retailers including Linens 'n' Things Inc. and Mervyn's LLC. Circuit City had planned to exit Chapter 11 and continue operations.
In January, after negotiations with prospective buyers failed, Circuit City said it would go out of business. The company, with debt of as much as $2.32 billion, shut 567 US stores and fired 34,000 workers.
Under the sale to Port Washington, N.Y.-based Systemax, Circuit City will get a share of sales from the brand name for two and a half years, with a guarantee of at least $3 million, Gregg Galardi, a lawyer for Circuit City, told Huennekens. No one objected to the sale.
During the auction, bids were received for about $7 million in cash, also including guaranteed revenue sharing, from PC Connection Inc., based in Merrimack, N.H., and PC Mall Inc., based in Torrance, Calif., said Galardi, of Skadden, Arps, Slate, Mayer & Flom LLP in Wilmington, Del.
Systemax's opening stalking-horse bid was $6.5 million.
Systemax agreed last year to buy the CompUSA name and some stores for about $30 million after the retailer shut its doors amid competition from Best Buy Co. and Wal-Mart Stores Inc. Systemax also sells under the TigerDirect brand.
© Copyright 2009 Globe Newspaper Company.
