Sea Island Company Reaches Agreement to Sell Substantially All Assets to Limited Partnership Formed by Investment Funds Managed by Oaktree Capital Management, L.P. and Avenue Capital Group

-(BUSINESS WIRE)--Sea Island Company, a private resort and real estate development company, today announced that it has reached an agreement to sell substantially all of its assets to Sea Island Acquisition LP (“SIA”), a limited partnership formed by investment funds managed by the global investment firms Oaktree Capital Management, L.P. and Avenue Capital Group. The sale agreement follows a robust process – begun late last year – in which Sea Island Company reviewed all of its strategic alternatives and determined that this agreement is the best possible outcome for the Company and its stakeholders.

“We are very pleased to have reached an agreement with an investment group that has come to know Sea Island well and appreciate what made us special from the start”

Under the terms of the agreement, the Company’s businesses will remain intact and retain their core values and culture. After the sale, the businesses will continue under the leadership of Bill Jones III, Chairman and Chief Executive Officer, and David Bansmer, President and Chief Operating Officer.

To facilitate the sale, Sea Island Company, Sea Island Coastal Properties, LLC and their subsidiaries today filed voluntary petitions for relief under Chapter 11 of the United States Bankruptcy Code. The Chapter 11 cases and sale enjoy the support of all of the Company’s secured lenders and are expected to be completed by year-end. In the interim, the Company has secured a debtor-in-possession (DIP) loan from certain of its secured bank lenders, providing access to additional liquidity should it be required during this period.

The action, filed in the Southern District of Georgia in Brunswick, allows the Company’s businesses to continue normal operations. All of Sea Island Company's operations, including The Lodge, The Cloister, The Cloister Spa and Fitness Center, The Sea Island Club, the Ocean Forest Golf Club, The Sea Island Beach Club, as well as the golf facilities, are open and business will continue without any disruptions to the superior service provided to members and guests. All reservations will be honored and guests will enjoy all of the facilities and experiences they booked at the time of their reservation.

In conjunction with its Chapter 11 filing, Sea Island Company today filed a Plan providing for the sale of substantially all of its assets free of its approximately $600 million of existing secured debt. SIA will own and operate the resort and golf courses without any interruption in services. All obligations owed by Sea Island Company to its trade vendors will be assumed by SIA. All existing employees of Sea Island Company will be offered employment by SIA. All club members will be offered the opportunity to continue to enjoy the same benefits and services at their respective clubs and receive full credit for their deposits paid.

The Board of Directors of Sea Island Company has approved the Asset Purchase Agreement, which is subject to a court-supervised auction process. The agreement was filed with the Court today, along with the DIP financing commitment and a variety of “First Day” motions that will allow the Company to continue to conduct its business as usual.

“We are very pleased to have reached an agreement with an investment group that has come to know Sea Island well and appreciate what made us special from the start,” stated Bill Jones III, Chairman and Chief Executive Officer of Sea Island Company. “Our commitments to our members, employees, guests and community were carefully considered throughout our review of strategic alternatives and we believe this is the best outcome. The purchasers have seen first-hand the value of what we have built – the finest collection of resort assets in the world with the highest accolades and best service. The additional financial strength gained through the transaction provides an ideal foundation for our future.”

Sea Island Company President and Chief Operating Officer David Bansmer added, “Today’s actions are the culmination of a comprehensive process initiated by Sea Island Company’s management and Board of Directors to put our financial challenges definitively in the past and secure a more certain future for our businesses. After completing the Chapter 11 process and the related asset purchase agreement, our businesses will be financially strong – with the same superior service and southern hospitality.”

Sea Island Company's financial advisors are FTI Consulting and Goldman Sachs & Co., and its legal advisor is King & Spalding LLP.

Information about the proposed sale and Sea Island Company's Chapter 11 proceedings is available on the Company's website at www.ourfuture.seaisland.com. Information about the claims process and court filings can be accessed at www.epiqsystems.com. Vendor inquiries can be directed to 1- 888-886-6162 or vendors@seaislandnews.com.

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Circuit City Stores, Inc. Provides Update

/PRNewswire/ -- Circuit City Stores, Inc. today provided an update on developments in its United States Bankruptcy Court proceedings, its restructuring activities and its operations.

On January 5, 2009, the company filed a motion with the Bankruptcy Court that seeks approval of procedures that would formally put the company up for sale, as a going concern, as separate business units or as individual assets - including the sale of inventory.

Presently, the company is engaged in significant discussions, meetings and negotiations with two highly motivated and interested parties concerning the terms of a going concern transaction. These interested parties are considering providing additional financing to allow the company to sustain operations and move forward with a subsequent restructuring through a stand-alone plan and/or purchasing the company or all or substantially all of the company's assets. The parties have substantially completed due diligence and now are in negotiations with the company and the company's major stakeholders in order to finalize such a transaction. While the company is optimistic that a transaction can be successfully finalized, no assurance can be given that this will occur.

The motion was originally filed under seal and is being "unsealed," or made public, by the Bankruptcy Court today in order to conduct a hearing on the motion on Friday, January 9, 2009. The company was required to file the motion pursuant to an amendment to the company's debtor-in-possession (DIP) credit agreement, which was approved under seal by the Bankruptcy Court on December 23, 2008. The motion currently provides that an auction of the company and its assets would commence on January 13, 2009, and a sale hearing would occur on January 16, 2009.

The company's discussions with the interested parties could result in a sale agreement, or the company and the lenders could further amend the DIP credit agreement prior to the January 16, 2009, sale hearing. If no agreement is approved with a party interested in a going concern transaction by January 16, 2009, and the auction does not result in a sale of the company's assets, the motion provides that the company may enter into a transaction that will result in an asset liquidation process commencing soon after the sale hearing scheduled for January 16, 2009, absent any further amendment to the DIP credit agreement deadlines.

Restructuring and Operations Update

The company has continued to operate its business without interruption, and management is focused on developing and executing a comprehensive corporate restructuring plan. Initial successes toward restructuring the company's business and operations include the following:

-- As planned, in the months of November and December, the company
completed liquidation sales in and subsequently closed 155 domestic
stores that were underperforming or were no longer a strategic fit for
the company.
-- The company has achieved significant selling, general and
administrative expense reductions as it restructures it business to
align operations with its smaller national store base and has
implemented more stringent expense controls.
-- The company has retained DJM Realty Services, Inc. to negotiate
reduced rent for leased properties and to sell owned properties.
-- The company's sales trends improved significantly during the last two
weeks of December, and the combination of the improvement in sales and
focus on gross margin has enabled the company to continue to operate
well within the operating budget required by the amended DIP credit
agreement.

The case number for Circuit City's Chapter 11 filing in the United States Bankruptcy Court for the Eastern District of Virginia is 08-35653. Additional information on the filing can be found by visiting the company's investor information home page at http://investor.circuitcity.com/ and clicking on "Breaking News" and at the Claims Agent's Web site at www.kccllc.net/circuitcity.

Forward-Looking Statements

Statements made in this release may be considered forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and are subject to risks and uncertainties. These forward-looking statements include, without limitation, statements regarding the company's expectations concerning the bankruptcy process and the company's restructuring activities and operations. Actual results may differ materially from those included in the forward-looking statements due to a number of factors, including, without limitation, the following: (1) the impact of today's announcement on the company's restructuring activities and operations; (2) the ability of the company to continue as a going concern; (3) the ability of the company to negotiate successfully with one or more interested parties for a sale of all or substantially all of the company's assets; (4) the nature and amounts of the bids in any auction for the sale of all or substantially all of the company's assets; (5) the ability of the company to obtain approval of any necessary modifications to the DIP credit facility and operate pursuant to the terms of that facility; (6) the ability of the company to obtain Court approval of motions pursued by it from time to time in the Chapter 11 proceeding, including motions to extend deadlines currently in place in the bankruptcy proceeding; (7) the ability of the company to develop, pursue, confirm and consummate one or more plans of reorganization with respect to the Chapter 11 proceeding; (8) risks associated with third parties seeking and obtaining Court approval to propose and confirm one or more plans of reorganization, for the appointment of a Chapter 11 trustee or to convert the proceeding to a Chapter 7 proceeding; (9) the ability of the company to obtain and maintain normal terms with vendors and service providers; (10) the ability of the company to maintain contracts that are critical to its operations; (11) potential adverse developments with respect to the company's liquidity or results of operations; (12) the ability of the company to fund and execute its business plan; (13) the ability of the company to attract and retain customers; and (14) any further deterioration in the macroeconomic environment or consumer confidence. Discussion of additional factors that could cause actual results to differ materially from management's projections, forecasts, estimates and expectations is set forth under Management's Discussion and Analysis of Results of Operations and Financial Condition in the Circuit City Stores, Inc. annual report on Form 10-K for the fiscal year ended February 29, 2008, the quarterly report on Form 10-Q for the fiscal quarter ended August 31, 2008, and in the company's other SEC filings. A copy of the annual report is available on the company's investor information Web site at http://investor.circuitcity.com/.

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Big Three Auto Makers Compared To Toyota and Honda by ProCon.org on New Research Website

/PRNewswire/ -- ProCon.org, a nonpartisan 501c3 nonprofit research organization, created the new website bigthreeauto.procon.org to explore the question "Should the Big Three auto makers be bailed out by the US government?"

Pro and con statements addressing this question come from President-Elect Barack Obama, former Massachusetts Governor Mitt Romney, Nobel Prize winning economists Paul Krugman and Gary Becker, General Motors CEO Rick Wagoner, former US Energy Secretary and US Senator Spencer Abraham, and several others.

Also included on the site are:
-- Chapter 11 bankruptcy laws explained,
-- Contracts between the Big Three and the United Auto Workers,
-- Analysis of "legacy" employees and their impact on profits, and
-- 144-point chart comparing GM, Ford, Chrysler, Big Three combined,
Toyota, and Honda.


Some interesting points from this chart comparison include:


* General Motors, Ford, and Chrysler had a combined US market share of 51.8% in December 2007. As of Oct. 2008, their market share declined by 5.1% to 46.5%. Toyota and Honda, during that same nine-month period, increased their US market shares by 3.1% to a combined 28.4%.

* In 2007, the Big Three sold 18 million autos for $387.5 billion. In 2007, Toyota and Honda sold 12.2 millions cars for $304 billion.

* In the US, the Big Three directly employ 242,000 people and an estimated 2.5 to 3 million indirectly.

* Ford received a $1.29 billion tax refund in 2007 while General Motors paid $37.16 billion in 2007 taxes.

ProCon.org made its Big Three research publicly available for free and without advertising on the website bigthreeauto.procon.org.

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Circuit City Stores, Inc. to Reorganize Under Chapter 11

PRNewswire-FirstCall/ -- Circuit City Stores, Inc. (NYSE:CC) today announced that it has filed a voluntary petition for reorganization relief under Chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court for the Eastern District of Virginia ("Bankruptcy Court") in Richmond, Va. The company plans to continue operating the business without interruption as management focuses on developing and executing a comprehensive corporate restructuring plan. Circuit City's Canadian operations also will be seeking protection under the Companies' Creditors Arrangement Act in Canada ("CCAA").

In conjunction with the filing, Circuit City is seeking customary authority from the Bankruptcy Court that will enable it to continue operating its business and serving its customers in the ordinary course. The requested approvals include requests for the authority to make wage and salary payments and continue various benefits for employees as well as honor customer programs such as returns, exchanges and gift cards. In addition, Circuit City has negotiated a commitment for a $1.1 billion debtor-in-possession (DIP) revolving credit facility to supplement its working capital. The DIP facility replaces the company's $1.3 billion asset-based credit facility and is being provided by the same lenders. The facility provides additional immediate liquidity while the company works to reorganize the business and will permit the company to pay vendors and other business partners for goods and services received after the filing.

Circuit City recently announced that it was taking certain actions to address the company's financial condition and deteriorating liquidity position. Despite aggressive efforts to secure vendor support, vendor concerns about the company's liquidity and ability to pay for its purchases in this difficult economic climate have escalated considerably since the company provided a liquidity update on November 3, 2008, further impairing the company's ability to conduct business and provide service to its customers. Faced with the need to secure ongoing vendor support and to ensure adequate merchandise flow to stores during the important holiday season, the company has determined that it would be in the best interest of its stakeholders to file for reorganization relief under Chapter 11. Operating under the protection of Chapter 11 will provide the company's vendors with assurances that they will be paid for merchandise the company receives post-filing so the company can be sufficiently stocked for the holiday selling season. Further, the company intends to create a restructuring plan that should allow Circuit City to emerge as a stronger business with an improved national distribution channel for its vendors and a more compelling offering for its customers.

The company recognizes that, to achieve these objectives, there is a critical need to create a more efficient chain with a streamlined cost structure. As previously announced, the company is in the process of closing 155 domestic segment stores. This week, the company took action to realign its regional and district support structure commensurate with the smaller store base, which will include approximately 566 stores when the domestic segment store closings are completed. As a further cost-saving measure, the company reduced its corporate headquarters workforce on November 7, 2008. These corporate, regional and district support reductions totaled approximately 700 positions and are in addition to the reductions resulting from the store closings. The store closings and support workforce reductions will result in a combined domestic workforce and store base reduction of approximately 20 percent.

Under the protection of Chapter 11, the company plans to build on these recent restructuring initiatives. Through the additional flexibility that the bankruptcy process provides the company to restructure its operations, the company will continue its real estate rationalization by taking immediate steps to reject the leases at its previously closed locations. Further, as part of its restructuring efforts, the company will continue to assess the productivity of all assets, review additional cost-cutting initiatives and explore strategic alternatives to maximize the value of the business.

James A. Marcum, vice chairman and acting president and chief executive officer of Circuit City Stores, Inc., said, "We recently have taken intensive measures to overcome our deteriorating liquidity position. The decision to restructure the business through a Chapter 11 filing should provide us with the opportunity to strengthen our balance sheet, create a more efficient expense structure and ultimately position the company to compete more effectively. In the meantime, our stores remain fully operational, and our associates are focused on consistent and successful execution this holiday season and beyond.

"We appreciate the support we have received from our lenders in the midst of such a tight credit market. With this support, we believe we have the opportunity to leverage our market position and the strength of our brand to restore Circuit City to solid financial footing," continued Marcum.

"We understand how difficult the recent announcements have been on everyone at the company, and we recognize the changes personally affect many people. Further, we know there is never a good time for individuals to be impacted by decisions like these, and we deeply regret the effect this has on our associates. I want to thank them for their continued loyalty and dedicated effort as we go forward with the belief that implementing long-term and lasting change to our business will come by satisfying our customers, one at a time," concluded Marcum.

Additional Information

Circuit City Advantage Protection Plans(R) are product warranty and service plans sold by the company on behalf of unrelated third parties who are the primary obligors. As a result, these warranty and service plans are not subject to change as a result of the company's Chapter 11 filing. Likewise, Circuit City co-branded credit cards are offered by Chase Card Services and are not impacted by the company's Chapter 11 filing.

Additional information on today's announcement can be found by visiting the company's investor information home page at http://investor.circuitcity.com/ and clicking the link for "Breaking News" and at the Claims Agent's Web site at www.kccllc.net/circuitcity.

About Circuit City Stores, Inc.

Circuit City Stores, Inc. (NYSE:CC) is a leading specialty retailer of consumer electronics and related services. At October 31, the domestic segment operated 712 Superstores and 9 outlet stores in 165 U.S. media markets. At September 30, the international segment operated through 770 retail stores and dealer outlets in Canada. Circuit City also operates Web sites at www.circuitcity.com, www.thesource.ca and www.firedog.com.

Forward-Looking Statements

Statements made in this release, other than those concerning historical financial information, may be considered forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and are subject to risks and uncertainties. These forward-looking statements include, without limitation, statements regarding the company's expectations concerning the bankruptcy process, the continuation of day-to-day operations and payments to vendors and employees in the ordinary course. Actual results may differ materially from those included in the forward-looking statements due to a number of factors, including, without limitation, the following: (1) the impact of today's announcement on the company's operations; (2) the ability of the company to continue as a going concern; (3) the ability of the company to obtain approval of and operate pursuant to the terms of the DIP facility; (4) the ability of the company to obtain court approval of the company's first day papers and other motions in the Chapter 11 proceeding pursued by it from time to time; (5) the ability of the company to develop, pursue, confirm and consummate one or more plans of reorganization with respect to the Chapter 11 cases; (6) risks associated with third parties seeking and obtaining court approval to terminate or shorten the exclusivity period for the company to propose and confirm one or more plans of reorganization, for the appointment of a Chapter 11 trustee or to convert the cases to Chapter 7 cases; (7) the ability of the company to obtain and maintain normal terms with vendors and service providers; (8) the ability of the company to maintain contracts that are critical to its operations; (9) potential adverse developments with respect to the company's liquidity or results of operations; (10) the ability of the company to fund and execute its business plan; (11) the ability of the company to attract, retain and compensate key executives and associates; (12) the ability of the company to attract and retain customers; (13) any further deterioration in the macroeconomic environment or consumer confidence; (14) the success of the company's store liquidators, and the prices obtained, in selling inventory in the stores that the company is closing; and (15) the company's receipt of the income tax refund from the federal government. Discussion of additional factors that could cause actual results to differ materially from management's projections, forecasts, estimates and expectations is set forth under Management's Discussion and Analysis of Results of Operations and Financial Condition in the Circuit City Stores, Inc. annual report on Form 10-K for the fiscal year ended February 29, 2008, the quarterly report on Form 10-Q for the fiscal quarter ended August 31, 2008, and in the company's other SEC filings. A copy of the annual report is available on the company's investor information Web site at http://investor.circuitcity.com/.

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