Circuit City Files Chapter 11

Author
Aron Schatz
Posted
November 10, 2008
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2475

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Circuit City has finally filed for bankruptcy protection. This is a restructuring that CC hopes will bring it out of problems. It is doubtful. Most retailers are feeling the pinch now and CC had some of the worst customer support just like the old CompUSA. We all know what happen with that...

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Chapter 11 allows a company to hold off creditors while it attempts to restructure its finances. Circuit City said Monday that it has has negotiated a commitment for a $1.1 billion debtor-in-possession revolving credit facility to supplement its working capital. Circuit City announced earlier this month that it would shutter 155 stores and lay off 17 percent of its workforce. The retailer said Monday that it will eliminate an additional 700 positions in addition to the reductions resulting from the store closings, bringing the total layoff projection to around 20 percent of its employees. According to the company's FAQ, in February it had approximately 45,900 employees, not including workers taken on during peak selling periods.

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