Circuit City Files for Bankruptcy

Dropping consumer spending, tightening credit hurt the electronics giant
By Newser Editors and Wire Services
Posted Nov 10, 2008 8:21 AM CST
Shoppers exit the Circuit City store in Springfield, Ill., Oct 20, 2008. Shares rose after a report said the chain may close at least 20 percent of its stores.   (AP Photo)
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(Newser) – Circuit City Stores has filed for bankruptcy protection today, about a week after it said it would close 20% of its stores. The electronics retailer, based in Richmond, Va., has struggled as nervous consumers spend less and credit tightens.

Chapter 11 protection typically allows a company to stave 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.