Circuit City goes titsup
Seeks court approval to liquidate assets
The bankrupt US retail giant Circuit City will be fully liquidated after the company failed to find a buyer in time.
The company will be presenting the results of an auction for its assets at a hearing in US Bankruptcy Court in Richmond, Virginia later today.
Circuit City said in a statement that it will seek approval to begin the process to liquidate its assets.
"We are extremely disappointed by this outcome," said Circuit City vice chairman and acting president and chief executive officer James A Marcum. "The company had been in continuous negotiations regarding a going concern transaction.
"Regrettably for the more than 30,000 employees of Circuit City and our loyal customers, we were unable to reach an agreement with our creditors and lenders to structure a going-concern transaction in the limited timeframe available, and so this is the only possible path for our company."
The beleaguered consumer electronics retail giant filed for Chapter 11 bankruptcy protection in November last year, when it also closed 155 stores and laid off 17 per cent of its US workforce. Since then it has been searching for a bidder to step forward and buy the company.
Circuit City said it will have more details soon about its liquidation plans that will affect the company's stores and other assets, its website and firedogSM services operations, the status of its Canadian operations and plans for the company's bankruptcy proceedings.
"The company does not anticipate any value will remain from the bankruptcy estate for the holders of the company's common equity, although this will be determined in the continuing bankruptcy proceedings," it said.
Shares in the retailer dived 80.67 per cent to three cents on Wall Street following speculation that an ominous announcement was imminent. ®