The Richmond, Va.-based consumer-electronics retailer, which has seen its shares tumbling 99% from a 52-week high of $8.24, negotiated a commitment for a $1.1 billion debtor-in-possession revolving credit line that will allow it to pay vendors and operate business as usual. The credit line replaced its $1.3 billion asset-based credit line provided by the same lenders. Circuit City said in the filing, made through the United States Bankruptcy Court for the Eastern District of Virginia, that it plans to emerge from the bankruptcy protection in the first half of 2009.
Circuit City files for Chapter 11 bankruptcy – MarketWatch.
Wow! I know talks of buyouts have been circulating around Circuit City, but I didn’t see this coming. A stalwart of the retail electronics business for many years, this is extremely interesting news. In my opinion indicative of the times we are living in. Of course, retail businesses can fail for reasons besides economic conditions, but in times of an economic downturn it will be harder for terminated employees to get back on their feet.
In a more positive light, this is great news for other consumer electronics retailers like Best Buy. According to MarketWatch, an electronics retailer has never successfully reorganized in Chapter 11, so in all likelihood other companies will absorb Circuit City’s marketshare.
What will slickdeals fans do on black friday now?
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“What will slickdeals fans do on black friday now?”
Target is key. I’ll be camping there again this year!