Circuit City Files for Bankruptcy
Circuit City has filed for bankruptcy on Monday about a week after it said it would close 20% of its stores, the Associated Press reports. Circuit City says it has more than $1 billion in assets and more than $1 billion in liabilities, the AP reports, citing a court filing. The company says it anticipates it would have money to distribute to unsecured creditors, who get paid last, according to the AP.
Last week, the Richmond, Va., company said the move to close stores was partly due to its deteriorating liquidity position and continued weakness in the economy. The company said a number of factors have hurt its financial state in recent weeks, including declining consumer confidence and slower spending. Among other things, the company hasn’t been able to collect a roughly $80 million tax refund that the company believes it should be getting from the federal government.
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