Thursday, November 27, 2014
Search
  
Submit your own News for
inclusion in our Site.
Click here...
Breaking News
Syrian Electronic Army targets CNBC, Telegraph, Independent, PCWorld
GoPro Camera Drones In The Works: report
European Parliament Votes To Break Up Google
LG Electronics Streamlines Structure, Names New Presidents of Home and Mobile Segments
Microsoft Accidentally Anounced Acquisition Of Acompli
Microsoft Offers Massive Music Deals For The Holidays
ETRI Develops 10Gbps Internet Speeds Technology
New Asus Strix 7.1 Surround Gaming Headset Released
Active Discussions
Hi All!
cdrw trouble
CDR for car Sat Nav
DVD/DL for Optiarc 7191S at 8X
Copied dvd's say blank in computer only
Made video, won't play back easily
New Features In Firefox 33
updated tests for dvd and cd burners
 Home > News > General Computing > Circuit...
Last 7 Days News : SU MO TU WE TH FR SA All News

Tuesday, November 11, 2008
Circuit City Stores to Reorganize Under Chapter 11


Circuit City Stores has filed a voluntary petition for reorganization relief under Chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court for the Eastern District of Virginia in Richmond, Va.

The company plans to continue operating the business without interruption as management focuses on developing and executing a corporate restructuring plan. Circuit City's Canadian operations also will be seeking protection under the Companies' Creditors Arrangement Act in Canada ("CCAA").

In conjunction with the filing, Circuit City is seeking customary authority from the Bankruptcy Court that will enable it to continue operating its business and serving its customers in the ordinary course. The requested approvals include requests for the authority to make wage and salary payments and continue various benefits for employees as well as honor customer programs such as returns, exchanges and gift cards.

In addition, Circuit City has negotiated a commitment for a $1.1 billion debtor-in-possession (DIP) revolving credit facility to supplement its working capital. The DIP facility replaces the company's $1.3 billion asset-based credit facility and is being provided by the same lenders. The facility provides additional immediate liquidity while the company works to reorganize the business and will permit the company to pay vendors and other business partners for goods and services received after the filing.

Circuit City recently announced that it was taking certain actions to address the company's financial condition and deteriorating liquidity position. Despite efforts to secure vendor support, vendor concerns about the company's liquidity and ability to pay for its purchases in this difficult economic climate have escalated considerably since the company provided a liquidity update on November 3, 2008, further impairing the company's ability to conduct business and provide service to its customers. "Faced with the need to secure ongoing vendor support and to ensure adequate merchandise flow to stores during the important holiday season, the company has determined that it would be in the best interest of its stakeholders to file for reorganization relief under Chapter 11," the company said in a statement.

The company recognizes that, to achieve these objectives, there is a critical need to create a more efficient chain with a streamlined cost structure. As previously announced, the company is in the process of closing 155 domestic segment stores. This week, the company took action to realign its regional and district support structure commensurate with the smaller store base, which will include approximately 566 stores when the domestic segment store closings are completed. As a further cost-saving measure, the company reduced its corporate headquarters workforce on November 7, 2008.

James A. Marcum, vice chairman and acting president and chief executive officer of Circuit City Stores, Inc., said, "We recently have taken intensive measures to overcome our deteriorating liquidity position. The decision to restructure the business through a Chapter 11 filing should provide us with the opportunity to strengthen our balance sheet, create a more efficient expense structure and ultimately position the company to compete more effectively. In the meantime, our stores remain fully operational, and our associates are focused on consistent and successful execution this holiday season and beyond."

"We appreciate the support we have received from our lenders in the midst of such a tight credit market. With this support, we believe we have the opportunity to leverage our market position and the strength of our brand to restore Circuit City to solid financial footing," continued Marcum.

"We understand how difficult the recent announcements have been on everyone at the company, and we recognize the changes personally affect many people. Further, we know there is never a good time for individuals to be impacted by decisions like these, and we deeply regret the effect this has on our associates. I want to thank them for their continued loyalty and dedicated effort as we go forward with the belief that implementing long-term and lasting change to our business will come by satisfying our customers, one at a time," concluded Marcum.


Previous
Next
Gmail Launches Voice and Video Chat        All News        Rambus Seeks Investigation of Nvidia Products
Gmail Launches Voice and Video Chat     General Computing News      No Music Player by Dell

Get RSS feed Easy Print E-Mail this Message

Most Popular News
 
Home | News | All News | Reviews | Articles | Guides | Download | Expert Area | Forum | Site Info
Site best viewed at 1024x768+ - CDRINFO.COM 1998-2014 - All rights reserved -
Privacy policy - Contact Us .