We interrupt this blog to provide some much needed commentary about the state of our economy. Here now is our senior economic correspondent, Robb Dorf.

Let’s face it, we all know at least one or two people who are feeling the effects of this down economy of ours. For me, sadly, it is members of my own family. My brother Eric was recently laid off from PayPal, and my sister-in-law Renee was laid off from her job as an electrical engineer. Both are hardworking and intelligent people who consistently received high marks and praise from their employers and colleagues, but were let go nonetheless.

As companies try to find ways to weather the economic tsunami, many — despite the impact on vendors, business partners, and  employees — will do whatever they can to survive, including filing for protection under the U.S. Bankruptcy Code, closing stores/locations, and cutting workforces down to the bone. For my part, I am thankful to say that here at PureFit, we have never laid anyone off and I hope we never have to.

On Monday, Circuit City won court approval for a Chapter 11 Bankruptcy motion and a $1.1 Billion loan from Bank of America. According to the company’s own bankruptcy filing, the chain owes more than $118 Million to Hewlett-Packard, $115 Million to Samsung Electronics, $60 Million to Sony, $41 Million to Zenith, $17 Million to Toshiba, $15 Million to Alliance Entertainment, $15 Million to Garmin International, $15 Million to Olympus, $14 Million to Nikon, $13 Million to Paramount Home Video, $13 Million to Panasonic, $12 Million to Mitsubishi, $11 Million to Kodak, $10 Million to Lenovo, $10 Million to Warner Home Video, $9 Million to IBM, $8 Million to Microsoft, $7 Million to Sharp Electronics, $6 Million to Vizio, $5 Million to SanDisk, $5 Million to Fox Home Entertainment, $5 Million to Monster Cable Products, and seriously, do I need to continue?

At the end of the day, Circuit City lists its assets at $3.4 Billion and liabilities at $2.32 Billion. (By the way, those $2.32 Billion in liabilities, according to the company’s bankruptcy filing, represents monies owed to nearly 100,000 different companies!)

If you ask me, executives and Board members at Circuit City, upon realizing that they’d just took possession of millions of dollars worth of inventory for the holiday season, said to themselves that by filing for protection under Chapter 11, they can now sell their existing inventory without having to pay full price for it. At a later date in time, after many costly court appearances, Circuit City, buoyed by their new $1.1 Billion line of credit from Bank of America, will end up settling with those 100,000 or so vendors for just pennies on the dollar. In the meantime, all of the companies  Circuit City owes money to (i.e., the vendors whose products and services allow Circuit City to be in business in the first place) will have to suffer because their invoices will go unpaid.

Chapter 11 is a shameful and disgusting practice companies use to “survive” during difficult times. I’d love the ability to sell PureFit Nutrition Bars and then not have to pay my suppliers full price for the ingredients that go into them. This mentality that if a business is failing, let someone else foot the bill has to stop. Running a business into the ground, which is exactly what was done at Circuit City, is a clear indication of poor leadership, management and planning.

It’s time U.S. companies start managing themselves more responsibly. Bailouts and Chapter 11’s are nothing more than band-aid solutions to much more pressing and long-term problems.

So you know how people always want to return to those halcyon days of college? Well I just got the chance to, and, to be honest, it is shaping up to be one of the most rewarding experiences of my professional life to date.

The Center for Entrepreneurship at California State University, Fullerton, is part of that institution’s award-winning Mihaylo College of Business and Economics, and I was fortunate to recently be given the opportunity to mentor six seniors with their semester projects. These students are Julie Woods, Jeff Abraham, Maria Lizarraga, Jacob Poth, Jenn Angel, and Shawn Mermilliod.

So you’re probably wondering how this all works. The program accepts applications from Orange County businesses that are looking for assistance with improving six areas of their operations. The applicants range from small companies with revenues in the low six figures, all the way up to multi-million dollar companies. The business on which my students are focused must remain nameless for confidentiality reasons, but I can tell you it’s a successful salon with major expansion plans. Over the course of the project, each one of my students takes a part of the salon’s business and analyzes it. Our focus is on marketing, accounting, public relations, team building, and website development and optimization.

I am truly having a blast and will admit I’m probably more enthusiastic than the students — I think they just want to graduate! My own excitement for this project is rooted in my experience as an entrepreneur. I’m proud of where PureFit is today, and I’m eager to give back to others who dare to dream as big as I have dreamed.

For more information on Cal State University’s unique program, contact Michael Ames, director of the Small Business Institute, Center for Entrepreneurship at sbiames at fullerton dot edu.