bankruptcyCircuit City

Circuit City – What To Do?

Most of you have probably heard of the Circuit City bankruptcy that was recently filed. There was a great post on The Wallet, a Wall Street Journal Blog, that told some specifics – including a list of store closings. Local to me, there is only one store closing – the one on University City Blvd. No other North Carolina or South Carolina stores are on their list of stores to be closed.

Some basics that you need to know:

Gift Cards: Circuit City says they will honor gift cards. Most of the media is warning against the purchase of gift cards, although if they are used in a timely manner, they should be honored. Circuit City is downsizing; they are not going out of business – at least not tomorrow. That being said, it is better safe than sorry.

Circuit City Credit Cards: These credit cards are issued through JP Morgan Chase in an agreement with Circuit City. These cards will not be impacted.

Warranties: These are also run through a 3rd Party; therefore, these agreements will be upheld regardless of what happens to the retailer.

Stockholders: Too bad if you own stock. Don’t give up hope though. It wasn’t too many years ago the K-Mart filed bankrupcy, reorganized, came out of it and somehow purchased Sears for $12.3 billion. If you own a good amount of this stock, be sure to do prudent tax planning to make the most of your losses. Personally, I wouldn’t sell for current stock price of less than $1 unless I had some taxable gains to offset. Of course, everyone’s tax situation is different. Luckily, I don’t own any anyhow so I do not have to worry about it.