Circuit City Liquidation Still Drags On

By Alan Wolf -- TWICE, 6/25/2010

Richmond, Va. - More than a year after Circuit City shut its last stores, the company's final liquidation is still on hold.

In the latest wrinkle, a federal judge here has appointed a mediator to help devise a plan for disbursing the chain's assets after the company and its creditors were unable to reach an accord.

According to the Richmond Times-Dispatch, a liquidation plan was filed when Circuit City entered bankruptcy protection in November 2008, but was never approved due to hearing delays over tax matters and other issues.

Frustrated by the delays, the creditors committee filed its own liquidation plan earlier this month, prompting Circuit City to request third-party mediation.

Both sides then agreed to resume negotiations to avoid court-ordered mediation, but failed to resolve their differences over the plan's bylaws and the composition of a committee that will disburse the remaining funds.

All parties are due back in court on July 22 to report their progress. But while the haggling continues, the professional fees continue to mount, with payments topping $47 million through April, the newspaper reported.