Circuit City negotiations continue

Circuit City Stores Inc. is continuing to negotiate with potential buyers that would keep the company operating, a spokesman for the company said today.

"Circuit City remains in negotiations over a going concern transaction," spokesman Bill Cimino said.

Earlier today, two sources said the going concern auction of the number two electronic retailer had not found a buyer.

One of the sources said this afternoon that it appears Circuit City has found a buyer.

"Your sources are wrong," Cimino said over the earlier report that no bidders had found for the entire company.

The Henrico County-based company, which declared bankruptcy in November, entered the auction process on Tuesday after saying it had two potential bidders interested in buying the retail chain as a going concern, which would keep it operating.

Last night, a company attorney said negotiations with bidders would continue.

Bloomberg News reported yesterday that sources said two bidders planned to bid for the chain's stores and liquidate its assets.

Circuit City will present the results of the New York auction to U.S. Bankruptcy Court in Richmond at 10 a.m. tomorrow.

Vendors who supply the chain have been rooting that its buyer continues to operate it after it emerges from bankruptcy.

The chain, which had been suffering from nearly two years of losses, was pushed into bankruptcy late last year as vendors began to pressure it for payment and demand new credit terms, according to court records.

The chain listed $2.3 billion in liabilities when it filed, the majority of which was owed to vendors.

Contact Louis Llovio at (804) 649-6348 or .