CNNMoney.com is reporting that Circuit City has asked for court approval to liquidate all of its assets and close all 567 across the United States.

"We are extremely disappointed by this outcome," James Marcum, acting CEO for Circuit City, said in a statement. "We were unable to reach an agreement with our creditors and lenders to structure a going-concern transaction in the limited timeframe available, and so this is the only possible path for our company."

In a filing with the U.S. Bankruptcy Court for the Eastern District of Virginia, Circuit City - the No. 2 electronics retailer after Best Buy (BBY, Fortune 500) - said it had reached an agreement with four companies to start the liquidation process.

The company said the sale would begin Saturday and run until March 31, pending court approval.

Back in October, I warned that buying from Circuit City should be done with caution because of their financial troubles at the time. This latest development should suprise no one given the current economic climate and the unwillingness of creditors to extend money to troubled efforts.

This is definitely bad news for Circuit City's 30,000 employees, and if there is any good to be found in this news, it's that consumers might be able to find some deals on clearance merchandise as the stores are being liquidated before closure.

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