Circuit City Files For Bankruptcy Protection

Circuit City, beset by the economic slowdown and competition from Best Buy, Walmart, and Target in the electronics business, is seeking bankruptcy protection. The company is trying to reorganize its debts:

Circuit City Stores, the nation's second-biggest electronics retailer, filed for bankruptcy protection Monday but will stay open for business as the holidays approach.

It filed under Chapter 11 of the bankruptcy code, which will allow it to hold off creditors and continue operations while it develops a financial reorganization plan.

The Richmond, Va.-based retailer has been struggling as nervous consumers spend less and credit has become tighter. The announcement came a week after it said it would close 20 percent of its stores and lay off thousands of workers.

The company said it decided to file because it was facing pressure from vendors who threatened to withhold products during the busy holiday shopping season.

Circuit City said it had secured $1.1 billion in loans to provide working capital while it is in bankruptcy.

It had $3.4 billion in assets and $2.32 billion in liabilities, as of Aug. 31.