Circuit City Files for Bankruptcy Protection
Struggling electronics retailer Circuit City today filed for Chapter 11 bankruptcy protection (yes, Chapter 11, like 1UP parent company Ziff Davis Media filed for earlier this year), according to Reuters. The announcements comes just a week after the company announced it would be closing 155 stores due to the economic downturn, among other factors.
In the filing, Circuit City CFO Bruce Besanko explained the move: “In large part, a Chapter 11 filing is due to three factors, all of which contributed to a liquidity crisis that prevented the company from completing its turnaround goals outside of formal proceedings: erosion of vendor confidence, decreased liquidity and a global economic crisis.”
It’s been an absolute whirlwind of bad news recently — Gizmodo recently reported that Sony stopped shipments of their products while they were in transit to distribution centers and had them returned “among worries that Circuit City couldn’t pay for the shipments.” That remains an unconfirmed rumor, but it wouldn’t seem out of place among the rest of the bad news that’s gone on. Hopefully they pull through this; besides, where else will you go to pay to have free updates installed? Not to mention the fact that it would, y’know, put people out of work.