Richmond (VA) – Circuit City announced today that in response to their inability to find a buyer, they will liquidate assets and close down all 567 U.S. stores, and will lay off all 30,000 workers. Canadian portion of business may remain viable, though still unknown.
Said Circuit City’s acting CEO, James A. Marcum, in a statement, “This is the only possible path for our company. We are extremely disappointed by this outcome.”
The weakened global economy may be as much to blame as anything for Circuit City’s closure. The company searched eagerly for a way to refinance debt, or to find a buyer. However, nothing was possible. “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,” Marcum said.
They have now appointed Great American Group LLC, Hudson Capital Partners LLC, SB Capital Group LLC and Tiger Capital Group LLC as liquidators. U.S. Bankruptcy Judge Ken Huennekens has given final approval of the liquidation plan.
Employees were notified today when they would lose their jobs. Some stores will begin close-out sales starting tomorrow (Saturday).
It is presently unclear what will happen to the company’s retail stores and dealer outlets in Canada. Circuit City has 765 such stores there. A lawyer, Gregg Galardi of Skadden, Arps, Slate, Meagher & Flom LLP, told the judge that there are still open bids for the Canadian business.
Shareholders are likely to receive nothing, which is a typical action in bankruptcy cases.