The Great Neostar Debate |
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Chapter 11 |
Neostar struggled and struggled to try and
lift itself up out of a now very deep rut. They ran some great promotions and tried to
push customer service to the limits. However this was not going to help the fact that they
had trouble keeping stores replenished with top ten products (e.g. Duke Nukem 3D, Warcraft
2, Command & Conquer to name a few). The prices on the mediocre software was still
higher than the competition, also causing a lack of product movement. Malls still had a
Babbage's AND a Software Etc within them--competing against each other. Inevitably, something had to be done. Enter Chapter 11. On top of the press release, there was a "no big deal" version posted on www.software-etc.com. For those who are afraid of long news articles, basically this is a request for court protection. From this, on the outside, not much changes. From the money standpoint, Neostar would receive $70 million in DIP (debtor in possession) financing which comes from various lenders. The #1 thing this money goes to is the employees' wages. Everyone was told "you WON'T stop getting your checks" about a thousand times. Here's the official petition for the financing, if you're into that kind of thing. It was approved October 3rd. Needless to say, this put the vendors on edge. Even with all of this credit, it doesn't mean they will get what is owed to them. Could Neostar be trusted? We found out the answer soon enough. |