Bankruptcy, Meltdown, Spillover

Circuit City declares bankruptcy

 

From the Associated Press:

Circuit City Stores has filed for bankruptcy about a week after it said it would close 20 percent of its stores.

The Richmond, Virginia-based electronics retailer has been struggling as nervous consumers spend less and credit has become tighter. It filed for bankruptcy protection on Monday.

Chapter 11 protection typically allows a company to hold off creditors and operate as normal while it develops a financial reorganization plan.

Circuit City says it has more than $1 billion in assets and more than $1 billion in liabilities. Courts do not require companies to provide more specific figures in filings.

The company says it anticipates it would have money to distribute to unsecured creditors, who get paid last.

A major consumer retailer declaring bankruptcy just before the Christmas shopping season probably indicates that the holidays will probably be less than merry for most.

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