Liquidation

Many irate Circuit City shoppers discovered the hard way this weekend that going-out-of-business sales don't always mean bargain-basement prices. Tensions have been running high at many of the chain's 567 U.S. stores after the electronics retailer announced Friday that it was ceasing operations and would begin liquidation sales the next day. The news that all merchandise would be discounted 10% to 30% drew throngs of customers to stores across the nation over the three-day weekend.

After 59 years in business, the Mervyns department-store chain called it quits Friday -- promising a huge going-out-of-business sale just in time for the holidays. And there is plenty of competition for a close-out Christmas. Linens 'n Things Inc. began a liquidation sale Friday, and Shoe Pavilion Inc. starts one this weekend, according to firms that said they were hired to liquidate the stores. Already gone are the novelty retailer Sharper Image Corp.

Nick Carr likes his music gear to be old school, which explains why he was groping in a box for a vintage guitar effects pedal during a liquidation sale at the Groove Tubes factory in San Fernando this week. That kind of equipment -- pedals, speakers, microphones and, of course, tubes -- was in abundant supply at Groove Tubes, which was sold to industry giant Fender Musical Instrument Corp. in June and is closing its inventory sale today.

Ryan J. Kugler is known as the video industry's scrap collector, but he doesn't mind. He sees himself as doing studios a favor by buying up the surplus DVDs that they would otherwise be stuck with, then reselling them to retailers. Chances are that when you rummage through old movies in discount bins at Target, Wal-Mart, Best Buy or a local car wash, Kugler's fingerprints are on them.

Federal regulators are examining the records of Brookstreet Securities, an Irvine brokerage being liquidated after sustaining heavy losses on mortgage-backed investments, the firm's founder said Friday. Stanley C. Brooks, who started Brookstreet 17 years ago, said he fired 80 employees Friday, leaving a staff of about 15 to shut down operations over the coming months. Brookstreet last week severed ties with more than 600 independent brokers nationwide who had represented the firm.

Bank of America Corp. said Monday that it would liquidate a $12-billion cash fund for wealthy clients and institutions, the largest investment of its type to close because of losses tied to the collapse of the sub-prime mortgage market. The fund, Columbia Strategic Cash Portfolio, was sold as an alternative to money-market funds, offering a higher yield by taking more risk.

Amaranth Advisors, the hedge fund manager that lost billions of dollars in energy trades, will suspend investor redemptions and liquidate its remaining positions, the company said in a letter to clients. Amaranth will continue to pursue strategic alliances, the letter said, after its net asset value declined by 65% to 70% during September. Its funds are down 55% to 60% year to date, it estimated.

Like many people, Andy Gumaer is sad when a beloved store goes out of business but happy at the thought of the everything-must-go sale. Gumaer, though, is happier than most. As president and co-founder of Great American Group, Gumaer buys bankrupt and ailing companies and then sells their assets, or he helps businesses unload operations that aren't performing well.

Sharper Image Corp., the 31-year-old retailer that filed for bankruptcy protection in February, won permission to sell all its assets to liquidators for as much as $50.5 million. A U.S. Bankruptcy Court in Wilmington, Del., on Friday approved results of an auction won Thursday by a joint venture between affiliates of Hilco Merchant Resources and Gordon Bros. Group. The buyer "will start liquidation sales tomorrow," Harvey Miller, a lawyer for Sharper Image, said in court. Sharper Image filed for bankruptcy protection with plans to shut about half of its 184 stores and reorganize.

Specialty retailer Linens 'n Things Inc., which filed for bankruptcy protection in May, plans to begin liquidation sales at its stores as early as Thursday after failing to find a buyer that wanted to operate the company. The company has about 371 remaining store locations.