Bankruptcy judge unplugs Circuit City

A U.S. bankruptcy court judge turned Circuit City Stores Inc. over to four firms to run its liquidation sale, closing its 567 stores to pay creditors.

Federal Judge Kevin Huennekens said he was issuing the approval with reluctance, the Richmond, Va., Times-Dispatch reported Friday.

The agreement with Great American Group, Hudson Capital Partners, SB Capital Group and Tiger Capital Group says the liquidation sale should leave Circuit City’s outlets broom clean.

The agreement also guarantees Circuit City 70.5 percent of expenses paid for merchandise, including freight costs, the newspaper said.

Circuit City’s Vice Chairman and acting President and Chief Executive Officer James Marcum said, we were unable to reach an agreement with our creditors and lenders to structure a going-concern transaction in the limited time frame available.

We are extremely disappointed by this outcome, he said.

The four firms handling the sale will keep all unsold merchandise and be awarded a $7.5 million fee to cover their expenses handling the sale, the newspaper said.