Circuit City disclosure statement approved; plan hearing Nov. 23

By Caroline Salls

Pittsburgh, Sept. 24 - Circuit City Stores, Inc. received court approval of the disclosure statement for the plan of liquidation filed jointly with its official committee of unsecured creditors, according to a Thursday filing with the U.S. Bankruptcy Court for the Eastern District of Virginia.

The plan confirmation hearing is scheduled for Nov. 23.

Under the plan, Circuit City will wind down its remaining assets and distribute the proceeds of the liquidation of its assets.

Creditor treatment under the plan includes:

• Holders of administrative claims will receive a full cash recovery to be paid from the liquidating trust;

• Holders of priority tax claims will receive a full recovery through regular quarterly cash installment payments made over a period of five years;

• Holders of $5 million to $20 million of miscellaneous secured claims will receive a full recovery either in cash from the liquidating trust or through the return of the collateral securing their claim;

• Holders of $35 million to $95 million of non-tax priority claims will receive a full cash recovery paid from the liquidating trust;

• Holders of $1.8 billion to $2.0 billion of general unsecured claims will receive their share of an initial class 4 distribution amount, as well as their share of periodic class 4 distributions; provided that the face amount of all administrative claims, priority claims and miscellaneous secured claims have been paid in full;

• Holders of intercompany claims will receive no distribution under the plan; and

• All subordinated 510 (c) claims, subordinated 510 (b) claims and interests will be cancelled.

The Richmond, Va., electronics retailer filed for bankruptcy on Nov. 10, 2008. Its Chapter 11 case number is 08-35653.

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