Circuit City Stores Wins Bankruptcy Court Approval of Liquidation Plan

Circuit City Stores Inc., the bankrupt retailer of televisions and computers, won court approval of its amended liquidation plan.

U.S. Bankruptcy Judge Kevin Huennekens in Richmond, Virginia, today approved the liquidating plan that will pay unsecured creditors at least 10 percent on claims totaling from $1.8 billion to $2 billion. Most of the secured claims have been paid.

Circuit City sought bankruptcy protection in November 2008 after suppliers, concerned about declining sales at almost 1,500 U.S. and Canadian stores, cut off credit and demanded cash up- front for shipments.

The Chapter 11 petition filed in Richmond, where the company is based, listed assets of $3.4 billion and debt of $2.3 billion as of Aug. 31, 2008. The company originally said it owed $898 million to secured revolving credit lenders. Unsecured trade suppliers were owed another $650 million at the outset, the company said in a court filing.

The case is In Re Circuit City Stores Inc., 08-35653, U.S. Bankruptcy Court, Eastern District of Virginia (Richmond).

To contact the reporter on this story: Dawn McCarty in Wilmington at dmccarty@bloomberg.net.

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