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Circuit City bidding procedures approved
By Caroline Salls
Pittsburgh, Jan. 12 - Circuit City Stores, Inc. obtained court approval of procedures that formally put the company up for sale, either as a going concern, as separate business units or as individual assets, including inventory, according to a Monday filing with the U.S. Bankruptcy Court for the Eastern District of Virginia.
The company said Friday that it is engaged in significant discussions, meetings and negotiations with two highly motivated and interested parties concerning the terms of a going-concern transaction.
Circuit City said these interested parties are also considering providing additional financing to allow the company to sustain operations and move forward with a subsequent restructuring through a stand-alone plan of reorganization and/or purchasing the company or all or substantially all of its assets.
If no going-concern transaction agreement is approved by Jan. 16, and the auction does not result in a sale of the company's assets, the bidding procedures allow the company to enter into an asset liquidation process that would start soon after Jan. 16, absent any further amendment to Circuit City's debtor-in-possession credit agreement deadlines.
Under the bidding procedures, the company would pay a 2% termination fee if any stalking horse bidder selected by Tuesday were to be outbid at auction.
Bids were due by 5 p.m. ET on Jan. 10.
The individual auctions are scheduled to begin on Jan. 13, and could also be held Jan. 14, if necessary. The sale hearing will be held Jan. 16.
Circuit City, a Richmond, Va., electronics retailer, filed for bankruptcy on Nov. 10. Its Chapter 11 case number is 08-35653.
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