Judge approves retention bonuses for Circuit City

Give me a break. The execs are lucky to have a job and a few more weeks or months of pay! $4 million in bonuses is an outrage. Much unlike the thousands of other CC employees who got a bucket of ice water in the face and a boot in the behind, does any rational person think these MISERABLY FAILED business managers are so attractive that they can just run out and grab a great job elsewhere? Did someone forget we are in a DEEP recession. It’s clear that these decisions are poorly thought out, as the remaining CC managers aren’t going anywhere until they have to.

It’s just another absurd chapter in a very sad saga where employees and shareholders have gotten the royal shaft.

Otherwise not seen in the Times Dispatch has been comprehensive credit or discredit for those who bear the principle responsibility for the destruction of Circuit City. (It’s a firm this writer first followed and invested in 1964!)

First Rick Sharp. Sharp appeared to have an attention deficit and possibly to have become bored being president and chairman of the largest retailer of electronics in the US. If the idle mind is the devil’s workshop, well Sharp was busy. He ill advisedly and needlessly ventured off into home alarm systems, home heating and air systems, dumped 10’s of millions into the ill fated Divix, dropped appliance from the product line and effectively drove Circuit City into the ground.  Despite jamming a dagger into the heart of the company, he collected the usual millions in his golden parachute, even though it took years to fully recognize the destructive effects of his actions or in-actions. (He’s now off busy with the rubber shoe Crocks, trying to figure how to get them unstuck from escalators)

Culprit #2 was Phil Schoonover. The CC board thought they had pulled a major coup, by hiring Phil away from Best Buy. Since Circuit City could not figure out how to save the mortally wounded company, they dreamed that Schoonover would simply turn them into a Best Buy clone and to emulate Best Buy’s success. It seemed simple, but they hired the wrong guy.

It turns out that Schoonover would have been better off pushing a broom in the warehouse, as he apparently had absolutely no clue, as how to save the company. A turn-around expert he was not. Under his watch CC bled hundreds of millions in added red ink.  Phil collected his golden parachute for effectively killing a dying company. Thanks a lot Phil.

The third and final culprit is an unlikely person: Kevin R. Huennekens. Kevin is a local Richmond resident who was recently made a junior bankruptcy judge. Apparently Huennekens was so new to the court that the CC case was perhaps 1,000 times larger than any case he had considered in his very brief career.  Why would the court place a young and green judge over such an important case?

Huennekens seemed to rush the case through his courtroom for unexplained reasons, particularly in the last few days. Was he miles over his head with this case.

Inexplicably in the late hours of the case, Kevin appeared to completely forsake the interests of the shareholders, the vendors, and the employees, by apparently disallowing a bona fide and apparently capable purchaser sufficient time to package and complete the transaction.

An RTD article provided an amazing quote from an official very close to the case, in which they said that there was a ready, willing, and able buyer, however Judge Huennekens ran out the clock, before the buyer could complete the package. What was the rush? Why the hurry if 2-3 additional days would have saved the company - although in a smaller format?

In his haste, it appears that Huennekens pushed the corporate body into the grave covering it with tons of dirt, to the extent that the willing rescuers appear to have been cut off from their mission. 

Ironically Huennekens was quoted as saying something like it being a sad day for CC employees. Unbelievably, and at the same time, in the quotes for that article, he seemed to have completely ignored the interests of millions of shareholders.

Kevin R. Huennekens seemingly caused shareholders hundreds of millions in added losses because he appeared to effectively stop all attempts to rescue the company. It was both sad and seemingly completely avoidable.

Net, net, net, the triumvirate of Sharp, Schoonover, and Huennekens seem to bear the initial, intermediate, and final responsibility respectively, for the death and final burial for one of our greatest local Fortune 500 firms, which could easily have been saved.  What a crying shame.