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Courts Appoint Tweeter Trustee; Approve Circuit Workers' Pay

12/05/2008 04:53:00 PM Eastern

Wilmington, Del. — In separate bankruptcy court proceedings, Tweeter was assigned a trustee who will assume control of the shuttered A/V chain, and Circuit City was given the green light to continue paying some 600 pink-slipped headquarters employees through January.

A federal court here appointed CPA George Miller, a principal of the Philadelphia accounting firm of Miller Coffey Tate, as trustee of Tweeter’s estate under the Chapter 7 bankruptcy code.

Miller is to receive all of the company’s property and records, and ostensibly determine if the stores should reopen to continue liquidation sales.

Tweeter indicated that is has paid all wages and commissions owed to its employees, as well as all lease obligations and 75 percent of the fees it owed its liquidators.

Separately, a federal court in Richmond, Va., approved a motion allowing Circuit City to continue providing some 600 headquarters employees who were laid off last month with pay and benefits through January.

According to a report in the Richmond Times-Dispatch, the committee of unsecured creditors tried to block the move following initial court approval last month, arguing that the $8 million to $10 million in funds should be used to operate the bankrupt chain.

James Marcum, Circuit City’s acting president/CEO, said the ruling helps the nearly 30,000 remaining employees know how committed “we are to returning this company to what it once was,” the newspaper reported.

Elsewhere, Massachusetts Attorney General Martha Coakley earlier this week advised consumers who bought merchandise, gift certificates or warranties from Tweeter to file a Proof of Claim form with the Delaware Bankruptcy Court in order to recover their money. “Our office will continue to monitor this situation,” she said in a statement.