Mervyns Files for Chapter 7 Bankruptcy, Closing All 175 Department Stores

Atlanta, GA 10/17/2008 08:17 PM GMT (TransWorldNews)

Mervyn's LLC, the ailing department store chain, has filed for Chapter 7 bankruptcy protection and will go through liquidation of all of its stores, according to news reports Friday.

Mervyn's filed for Chapter 11 bankruptcy in July, but then filed for Chapter 7 bankruptcy protection on Friday. The company will not enter the process of liquidation as early as Friday.

When they filed in July, it was reported that the company planned to reorganize its business and keep open all of its 175 stores.

Mervyns had been closing stores and leaving states such as Oregon and Washington since 2005, after a consortium of private equity firms, including Sun Capital Partners Inc. and Cerberus Capital Management, bought Mervyns from Target Corp. for $1.2 billion in a leveraged buyout.

In April, Mervyns appointed John Goodman, who had been president and general manager of the Dockers brand, a key supplier to Mervyns, as president and chief executive. However, the store's perils were not affectively altered.

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