Circuit City seeks liquidation approval
Five largest studios owed combined $37 million
By TWICE staff -- Video Business, 1/16/2009
JAN. 16 | Circuit City has decided to liquidate its assets across its 567 outlets, following the chain’s Chapter 11 bankruptcy filing in November.
The retailer will first seek Bankruptcy Court approval to begin the liquidation process.
Circuit City management had been working to secure a buyer and expressed regret on Friday about its failure to do so.
Circuit City’s creditors, which include a number of the major studios and distributors, should be upset over the termination of the retailer's operations.
The chain, the second-largest consumer electronics retailer behind Best Buy, owed the five largest studios a combined $37 million at the time of the bankruptcy filing, and was in debt to distributors Alliance Entertainment and Navarre Corp. for $15.8 million and $2.56 million, respectively. Paramount Home Entertainment is owed the most at $13.7 million; followed by Warner Home Video, $10.7 million; 20th Century Fox Home Entertainment, $5.8 million; and Walt Disney Studios Home Entertainment, $3.7 million, according to the bankruptcy filing.
“We are extremely disappointed by this outcome,” said James A. Marcum, vice chairman and acting president and CEO at Circuit City. “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.”
Specific details on how the liquidation affects Circuit City’s various segments, including in-store activities, its Web site and FiredogSM technical service operations, will come shortly, said the company. Additional information about the bankruptcy and liquidation can be found at either Circuit City’s site or at the Claims Agents’ Web site.
