We knew Circuit City had serious problems and we knew that filing for bankruptcy was a possibility. Well it happened folks! The favorite shop for some will close all of its stores as it failed to reach an agreement which would have helped it stay afloat.

Circuit City has $2 billion in debt and it has requested approval from the bankruptcy court to liquidate its assets and close the 567 stores in the U.S. and possibly the 765 stores in Canada.

James A. Marcum chief executive of Circuit City said:

We are extremely disappointed by this outcome. The company has been in continuous negotiations regarding a going concern transaction. Regrettably for the more than 30,000 employees of Circuit City and our loyal customers, we were unable to reach an agreement with our creditors and lenders to structure a going-concern transaction in the limited timeframe available, and so this is the only possible path for our company.

Circuit City is down, who is going to follow?

After Circuit City was forced to close down about 155 stores in the recent past, it looks like it’s filing for bankruptcy and no one it’s going to stop it. Circuit City will reorganize itself under the Chapter 11 bankruptcy which means that the company is still going pay salaries and provide benefits to its employees. And they will still return, exchange stuff and gift cards. Here’s what vice chairman James A. Marcum has declared:

We recently have taken intensive measures to overcome our deteriorating liquidity position. The decision to restructure the business through a Chapter 11 filing should provide us with the opportunity to strengthen our balance sheet, create a more efficient expense structure and ultimately position the company to compete more effectively. In the meantime, our stores remain fully operational, and our associates are focused on consistent and successful execution this holiday season and beyond.

So is anyone going to revitalize Circuit City? By raise of hands people! Anyone?