Circuit City has another mess to deal with. In addition to fending off Blockbuster (NYSE: BBI), it now has a proxy fight on its hand. Wattles Capital Management, a 6.5 percent holder of the company’s shares, has submitted a slate of five candidates to the company’s board. In its statement, the firm derides the company’s operating performance, adding: “we are deeply concerned by the Board’s track record of rejecting what has appeared to be legitimate third-party interest in acquiring the Company for a premium, including the recent offer of Blockbuster Inc. to acquire the Company for between $6.00 and $8.00 per share in cash.” While Circuit City has questioned where the financing will come from, Wattles says this is hogwash, given that Carl Icahn has apparently agreed to finance the deal. Furthermore, it doesn’t make sense for Circuity City not to have opened its books to Blockbuster, given that they’re not a competitor. Beyond that, the complaint looks like what you’d expect from the shareholder of a consumer electronics retailer whose shares have been crushed.

The firms’ prescription: Seriously consider any third party offers, in addition to exploring a turnaround plan.

Circuit City, meanwhile, trades just under $5 per share, about 20 percent off Blockbuster’s minimum offer.

• Blockbuster Seeks To Acquire Circuit City; At Least 54 Percent Premium