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CNBC EXCLUSIVE: CNBC TRANSCRIPT: CNBC's MARGARET BRENNAN INTERVIEWS HUDSON CAPITAL PARTNERS CEO JIM SHAYE ON CNBC'S "THE CALL" TODAY

CNBC EXCLUSIVE: CNBC TRANSCRIPT: CNBC's MARGARET BRENNAN INTERVIEWS HUDSON CAPITAL PARTNERS CEO JIM SHAYE ON CNBC'S "THE CALL" TODAY

WHEN: Today, Friday, October 31st

WHERE: CNBC's "The Call"

Following is the unofficial transcript of an EXCLUSIVE CNBC interview with Hudson Capital Partners CEO Jim Shaye, on CNBC'S "The Call" Today.

All references must be sourced to CNBC.

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MARGARET BRENNAN: (to viewers): LIQUIDATION IS ONE OF THE FEW AREAS IN RETAIL WHERE BUSINESS IS BOOMING THESE DAYS. JIM SHAYE IS THE CEO OF HUDSON CAPITAL, ONE OF THE PRIVATE EQUITY FIRMS AT THE LEAD OF LIQUIDATING MERVYN'S DEPARTMENT STORES. JIM JOINS US EXCLUSIVELY NOW. (interview begins) JIM I WANT TO ASK YOU, MERVYNS, A LOT OF THEIR REAL ESTATE HAS ALREADY BEEN PICKED OVER, THEIR SALES HAVE BEEN STRUGGLING FOR A WHILE, WHAT OPPORTUNITY ARE YOU SEEING IN WHAT REMAINS OF THIS DEPARTMENT STORE RIGHT NOW.

JIM SHAYE: WELL UNFORTUNATELY WHAT ALL REMAINS IS REALLY FOR US TO GO IN, AS OUR JOINT VENTURE, AND LIQUIDATE THE BALANCE OF THE INVENTORY. AS YOU SAID THERE'S $900 MILLION WORTH OF INVENTORY AND WE'LL MOVE THROUGH THAT INVENTORY IN APPROXIMATELY EIGHT WEEKS AND SELL THE STORES DOWN TO THE BARE WALLS.

BRENNAN: WOW, WITHIN EIGHT WEEKS. NOW I KNOW MERVYN'S IS NOW HAVING OUTSTANDING DEBT THERE TO WACHOVIA ABOUT $329 MILLION AS OF JULY. GE CAPITAL PROVIDED ABOUT $100 MILLION DEBT REPOSSESSION FINANCING TO THAT DEPARTMENT STORE. THE LIQUIDATION SALES THAT YOU WERE RUNNING WILL BE RESPONSIBLE FOR HELPING TO REPAY SOME OF THAT. WHAT IS YOUR TAKE ON HOW QUICKLY THAT PROCESS WILL HAPPEN AND WILL THEY BE MADE WHOLE?

SHAYE: WE BELIEVE THAT THE SECURED LENDERS WILL BE MADE WHOLE. IT'S OUR UNDERSTANDING THAT POSSIBLY THERE COULD BE SHORTFALL ON THE UNSECURED CREDITORS BUT IT'S OUR UNDERSTANDING THAT THE SECURED CREDITORS WILL BE MADE WHOLE IN THIS PARTICULAR TRANSACTION.

BRENNAN: UNSECURED CREDITORS LIKE LEVI STRAUSS, NIKE, SOME OF THOSE NAMES.

SHAYE: THAT'S CORRECT.

BRENNAN: NOW THE INTERNATIONAL COUNCIL OF SHOPPING CENTERS ESTIMATES THERE'S GOING TO BE ABOUT 6,000 STORE CLOSURES IN 2008, THAT'S UP ABOUT 24 PERCENT FROM LAST YEAR. FROM YOUR PERSPECTIVE WHERE DO WE STAND THERE, IS THAT AN UNDERESTIMATION OF JUST HOW BAD THE RETAIL ENVIRONMENT IS THESE DAYS?

SHAYE: WELL, I HAD A CONVERSATION WITH ONE OF THE ASSET BASED LENDERS JUST THIS WEEK AND HE THOUGHT THAT APPROXIMATELY 10%

PERCENT OF HIS PORTFOLIO WOULD POSSIBLY BE LIQUIDATED NEXT YEAR. SO I WAS CERTAINLY QUITE SHOCKED AND SURPRISED THAT THAT NUMBER WAS SO HIGH.

BRENNAN:10 PERCENT OF HIS PORTFOLIO WOULD BE LIQUIDATED?

SHAYE:THAT'S CORRECT.

BRENNAN: WOW.

SHAYE: YOU HAVE TO UNDERSTAND THAT MOST OF THESE RETAILERS ARE NOW UNDER AND FINANCE THEIR BUSINESS UNDER ASSET-BASED LENDING.

BRENNAN: AND QUICKLY BEFORE WE GO, BECAUSE WE ARE OUT OF TIME, I KNOW THAT MANY HAVE SAID THAT PROCESS OF MOVING FROM

BANKRUPTCY FILING TO LIQUIDATION HAS SPED UP. WHAT OPPORTUNITY IS THERE TO REVIVE A BUSINESS THAT'S IN BANKRUPTCY OR IS EVERYTHING GOING STRAIGHT TO LIQUIDATION THESE DAYS?

SHAYE: EVERYTHING, WE'RE SEEING QUITE FRANKLY, EVERYTHING THAT'S GOING TO LIQUIDATION VERY, VERY QUICKLY, WE USED TO SEE THAT THEY WOULD BE RUN OVER A LONG PERIOD OF TIME. NOW IT GOES RIGHT TO LIQUIDATION.

BRENNAN: JIM SHEA OF HUDSON CAPITAL, THANK YOU SO MUCH FOR JOINING US TODAY ON THE CALL





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