Whoa! I should have looked at the court filing first. They are listing less than $50,000 in assets. I'm guessing there are individuals on this forum (not me) that have more than that in Canon equipment.
I don't know how this works in the camera retail business. Is it customary for a supplier to retain ownership of the stock until it is sold?
Maybe it will be the Canon refurbished store that gets all this stock back?
Read the comments on the article - here it is -
"The inventory was being used as collateral. We had auditors in about every other month to count things to make sure we had what we said we had." (this commentor claims to be an employee and his statements sound pretty consistent and legit)
As to this:
It is sad when companies that have been around for a long time suddenly disappear ... but its a shame that the owners of the company gave no warning to their employees ... hope the employees are rewarded well and find better jobs.
From what I've read about chapter 7...it's the nasty of the nasty. Management would not be allowed to tell employees prior to the closing because of how severe the situation is. It's don't to prevent things like, the employees walking out with half of what's in the store! Here's 2 lawyer comments:
"I am a US lawyer, but I don't practice bankruptcy law. I'm not an expert. Having said that: it's possible that Calumet wasn't allowed to warn employees, or at least that it might have caused problems if they had. As I understand it, the idea is to lock the doors of your business and hand the key over to the court, and then it's up to the court to oversee the feeding frenzy of creditors.
If a business warns its employees in advance, what happens if those employees steal a bunch of equipment on their way out the door? That equipment would have been sold to repay creditors, and now it can't be. Those creditors have every reason to look at management and ask, "Did you look the other way while these thefts occurred because you didn't want to see us repaid? Did you arrange to split the proceeds with your ex-employees?" It would undermine the point of bankruptcy protection.
But again, I don't practice bankruptcy law and I would welcome correction from someone who does this stuff every day."
And the reply to that -
"I am also a lawyer who doesn't practice bankruptcy law directly, although I have a lot of experience with it incidentally. Your comment is on the money, although another concern is creditors either trying to get special treatment if they know bankruptcy is imminent (which the bankruptcy court then has to try to undo) or immediately ceasing to provide services (such as utilities, computing services, etc) which would cause premature disruption of the business and, again, ultimately harm creditors.
Yes, it sucks, but this is how it has to be. If this were Chapter 11 (Restructuring) it would be different, but Chapter 7 (Liquidation) is an ugly, ugly process and there are no winners.I feel bad for the employees and those who have equipment in for service, as well as those who've already paid for merchandise that will never be delivered. Hopefully they at least manage to get the service equipment back to its rightful owners and pay their employees, although that latter seems unlikely."
Last copy past moment - that employee I qouted, he actually posted the email he recieved notifying him of what was happening:
Personally I'm not entirely sure I can believe anything that comes out of corporate. We had been struggling the past year, but around the start of the year we had been told things were turning around. That we had refinanced. That things would get better. They didn't. They actually started getting worse. As of a few days ago, we heard they were trying to refinance things again, so they could finally run the company the way they wanted to. We got this email last night:
• Over the past couple of months, management has been working tirelessly in an
effort to get the Company’s lender to support our plan to restructure the business.
We believed that we had a very viable plan that would allow Calumet to be a
healthy, profitable company. As of yesterday, the lender had given us indications
that they would support our efforts. However, to our surprise and despite all of
our hard work, the lender today suddenly decided that they would not support us;
• As a result, we have been forced to file Chapter 7 bankruptcy. Unfortunately, this
means that we must cease operations, shut our doors and terminate all employees,
effective immediately. This means you are not to show up for work tomorrow.
We are so sorry that it has come this. This is not what we had anticipated.
• We will make arrangements soon for everyone to come and get their personal
• There will be a lot of questions that people will have that we do not have answers
to, but we will make every effort to get answers. If you have a question, please
write it down and send it to me and we will do our best to get back to you as soon
as we can. We ask that you be patient since this is all new to us.
• We will be requesting that the lender agree to pay payroll through today, but there
is no guarantee they will agree to do so. As soon as we receive a response, we
will let you know.
• Again, we are so sorry that this has happened and personally thank you for all of
your hard work and dedication.
So...sounds to me like there were a lot of factors leading to this. An older company struggling to transition to the new emerging economy - a new economy filled with ways for people to get the same thing for less. Maybe that's why they bought all those new storefronts? Either way - with an already bad financial forecast they borrowed a bunch of $$, bought new stores in key locations...sounded great on paper but in every article and forum I read on this I hear stories of the same old story - I went in and they didn't have what I needed in stock, could have ordered it there but it would have been cheaper, easier, and faster online. the other big thing I've read is that they really pushed those classes.
It's a nasty nasty thing.