Circuit City Officially Bankrupt
The move follows the closing of 155 stores, 20 percent of the total, just as the holiday shopping season is about to kick off. A more recent report also indicates that a quarter of the employees at the company's headquarters have been laid off.
Filing for bankruptcy allows Circuit to access a $1.1 billion line of credit from current lenders. That will enable it to keep its remaining stores open and employees paid, at least for now. The filing listed $3.4 billion in assets and $2.32 billion in liabilities. Circuit owes $650 million to its suppliers, including $119 million to HP alone and $116 million to Samsung alone. It lost $239 million in the third quarter of this year.
Circuit filed Chapter 11 with the bankruptcy court in Richmond, Virginia. That's where Circuit was founded in 1949 by Samuel Wurtzel as a single store selling TV sets.