The second-biggest electronic retailer, Circuit City, has filed a chapter 11 bankruptcy. Unlike chapter 7 bankruptcy (liquidation of assets), chapter 11 bankruptcy is where the court gives varying degrees of relief, while the business keeps control and comes up with a plan of reorganization.The company announced that it will be laying off thousands of workers and shutting down 20 percent of it's stores after already cutting 700 jobs at it's headquarters in Richmond, Virginia.
"Without immediate relief, the company is concerned that it will not receive goods for Black Friday and the upcoming holiday season, which could cause irreparable harm to the company and its stakeholders," said chief financial officer Bruce H. Besanko.
Though they are hoping to end the protection by summer 2009, things are looking bleak for all retailers due to the expected holiday seasons, which is said to be one of the worse seen in decades.
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