Montana Electronics Store Leaves Chapter 11 for Liquidation
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Montana Electronics Store Leaves Chapter 11 Bankruptcy for Liquidation

October 11, 2012

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Vann’s Inc., an appliance and electronics store that filed for bankruptcy in an effort to reorganize its debts, is asking a court to convert its filing into a liquidation sale, according to a report from Bloomberg Businessweek.

The company, which is headquartered in Missoula, Montana, had hoped to restructure its finances in Chapter 11 and emerge as a stronger firm, but its fiscal crisis proved too deep for the company to resolve.

According to the company’s chief executive, Jerry McConnell, Vann’s requested a conversion to "orderly liquidation" because it had "an obligation to let the judge know that unless somebody is willing to put in $3 million to $5 million for inventory," the company couldn’t meet payroll.

Alas, no buyers for the electronics company emerged, so it has been forced to enter liquidation bankruptcy and lay off all of its Montana employees. Since Vann’s has more than 50 employees, federal employment laws require it to give its employs a notice of at least 60 days before closing shop.

As a result, Vann’s will remain open, or at least will continue distributing paychecks, for the next two months. Sources indicate that Vann’s will have to close stores in a number of different Montana towns, including Missoula, Kalispell, Hamilton, Billings, Helena, and Bozeman. In addition, the company will also have to close a warehouse in Lolo.

The company’s president reportedly claimed that Vann’s used to make the bulk of its money on flat-screen televisions, but in recent years, the market for televisions became "saturated" and consumers looked to other retailers.

In addition, McConnell claimed that consumers "aren’t splurging on things like they have in the past," claiming that household incomes "are back to 1995 levels."

Despite the drop in consumer activity, Vann’s is hoping to have a big showing for its liquidation sale, although it won’t be holding such a sale until it gets "through the process with the court," according to McConnell.

In addition, the company’s president warned that he’s not going to "do anything crazy" because his company is still "obligated to deliver certain earnings." So Montanans looking for wildly cheap electronics might be disappointed.


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