RICHMOND, Va (Reuters) - Electronics retailer Circuit City Stores got final U.S. Bankruptcy Court approval on Monday for $1.1 billion in debtor-in-possession financing to provide liquidity as it reorganizes.
The financing enables the retailer to pay vendors and other business partners for goods and services received. The company filed for Chapter 11 protection last month.
U.S. Bankruptcy Judge Kevin Huennekens also approved a motion that would let Circuit City void employment and severance contracts with 40 former workers, including Philip Schoonover, who stepped down as chairman and chief executive in September.
Schoonover was entitled to at least $1.8 million in pay and other benefits as part of his employment agreement, according to a regulatory filing.
During a hearing, Circuit City lawyer Gregg M. Galardi told the bankruptcy court that since the Chapter 11 filing, same-store sales had fallen 43 percent to 50 percent at stores that are not slated to close.
Richmond-based Circuit City is closing 155 of its 722 U.S. stores.
The company said last week that it filed court notice seeking to reject store leases for 154 of those stores it is liquidating. The company canceled an auction of those leases last week after it did not receive enough bids.
(Reporting by Louis Llovio; editing by Richard Chang)
