Circuit City Stores plan of liquidation took effect on Nov. 1

By Caroline Salls

Pittsburgh, Nov. 5 - Circuit City Stores, Inc.'s plan of liquidation took effect on Nov. 1, according to an 8-K filed Friday with the Securities and Exchange Commission.

The plan was confirmed on Sept. 14 by the U.S. Bankruptcy Court for the Eastern District of Virginia.

On the effective date, the company's assets were transferred to a liquidating trust for distribution to creditors.

In addition, Circuit City was deemed dissolved, and its shares of common stock were cancelled, the 8-K said.

Creditor treatment under the plan includes:

• Holders of administrative claims will receive a full cash recovery;

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

• Holders 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 non-tax priority claims will receive a full cash recovery paid from the liquidating trust;

• Holders 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 company said the members of its board of directors, including Ronald M. Brill, Allen B. King, Don R. Kornstein and James A. Marcum, were deemed to have resigned on the plan effective date.

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

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