Circuit City Stores Inc. filed for Chapter 11 bankruptcy protection Monday following the company's announcement last week that it would close 20 percent of its stores and lay off up to 7,300 employees.
The move is an attempt to preserve inventory for the holiday shopping season, according to the Washington Times.
The company will reorganize and try to find a buyer, according to the Times.
Courts approved a $1.1 billion loan to help the company restructure, stock merchandise and pay employees.
Circuit City Chief Financial Officer Bruce Besanko said in a court document that the three major reasons for the company's bankruptcy are an erosion of vender confidence, decreased liquidity and the current economic crisis, according to the Times.
-M.M.
