Circuit City has become the latest victim of the credit crunch after the board of directors announced plans to petition the US Bankruptcy Court for permission to begin liquidating the firm's assets, after the firm failed to find a buyer.
Speaking in a statement to the press, Circuit City's vice chairman and acting president James A Marcum expressed his regret at current circumstances. "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," he added.
The firm had been reported to be in discussions with its largest shareholder, Mexican businessman Ricardo Salinas Pliego, but it appears that negotiations broke down at the last minute.
The company, which initially filed for Chapter 11 bankruptcy protection in November, as reported by PC Retail, said that it would provide further details about the liquidation of Circuit City in the coming weeks. The latest development means all 567 remaining stores will close. It had already been forced to close 155 stores back in November.
However, there are still questions lingering, including the future of its Canadian operations and its Firedog brands.
The firm has also warned that holders of common equity that they can expect little or no compensation, with it saying it does not anticipate any value with remain from the bankruptcy estate, though this will be confirmed at a later date.