What were your initial reactions to news this morning that Circuit City (OTC BB: CCTYQ.PK) was seeking bankruptcy court approval to liquidate its assets? Did you fumble through your pockets for any gift cards that you will need to quickly redeem at the consumer-electronics chain? Did you log in to your brokerage account, snapping up shares in rivals like Best Buy (NYSE:BBY), Conn's (NASDAQ:CONN), and hhgregg (NYSE:HGG) that will benefit from the thinning pool of competitors?

I was all over the map. My heart went out to the 30,000 employees, because they will be set off into the wild in a very difficult climate. It's also only natural to point out that Blockbuster (NYSE:BBI) dodged a bullet. It was exploring the purchase of Circuit City before walking away last year.

Circuit City shareholders were also denied exit strategies by overconfident executives in the past. The chain turned down buyout offers at $8 a share in 2003 and $17 a stub in 2005.

This doesn't mean that the private equity buyers caught a break. Maybe they were packing the magical elixir that would have put the company on track. Heck, if Blockbuster would have had time to integrate Circuit City, I can definitely see how the convergence of consumer electronics and specialty entertainment could have worked out, too.

We'll never know at this point. There could be life after liquidation for some of Circuit City's assets, like the firedog home installation service. If firedog doesn't survive as a standalone, wouldn't it fit well with a chain like RadioShack (NYSE:RSH)? Maybe an online retailer such as Amazon.com (NASDAQ:AMZN) buys the traffic-heavy Circuit City website as a clearance site for distressed inventory. Ultimately, though, this is the end of the line for a company that seemed to be Best Buy's biggest threat a couple of years ago.

If anyone is chronicling the rise and fall of Circuit City, I'd like to offer up March 2007 as the beginning of the end for the company. It was then when the retailer decided to let go 3,400 unit-level associates who were earning above-average salaries at the company. It may seem like a shrewd move, until you consider that those on the higher end of the chain's pay scale are likely the seasoned vets on the front line who knew the company the best.

"It's not just that you're letting go what may be some of your productive associates," I wrote at the time. "What kind of message does this send to your remaining hires? Don't overachieve. Lay low. Do just enough to stay with the pack."

Circuit City's morale got laid off that day, too. It's a miracle the company even lasted this long without a heart.

The fall and fall of Circuit City:

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Longtime Fool contributor Rick Munarriz can watch time fly at a consumer-electronics store. He's a gadget geek that way. He does not own shares in any of the companies mentioned in this story. He is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. The Fool has a disclosure policy.