Circuit City gets final approval for financing
US-based consumer electronics retailer Circuit City has gained final US Bankruptcy Court approval for USD1.1 billion in debtor-in-possession financing to provide liquidity as it reorganises. The financing enables the retailer to pay vendors and other business partners for goods and services received. The company filed for Chapter 11 protection last month. US Bankruptcy Judge Kevin Huennekens also approved a motion that would let Circuit City void employment and severance contracts with 40 former workers, including Philip Schoonover, who stepped down as chairman and chief executive in September. Schoonover was entitled to at least USD1.8 million in pay and other benefits as part of his employment agreement, according to a regulatory filing. During a hearing, Circuit City lawyer Gregg Galardi told the bankruptcy court that since the Chapter 11 filing, same-store sales had fallen 43% to 50% at stores that are not slated to close.
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