Calling itself a victim of the protracted economic downturn, Bernie’s Audio Video TV Appliance Co. in Enfield today filed for Chapter 11 bankruptcy and announced that it will shut its 15 stores in Connecticut, Rhode Island and Massachusetts.
Typically, companies file for Chapter 11 bankruptcy to shield themsleves from creditors while it works out a court-approved reorganization plan.
But in a company statement, Bernie’s said it has asked the court for permission to start a going out of business sale.
According to court papers filed today in Hartford bankruptcy court, Bernie’s estimated its assets and liabilities each between $10 million and $50 million.
The bankruptcy filing follows days of speculation that the Enfield electronics and appliance chain was having financial difficulties.
On Tuesday, a trade publication reported that the company’s two top executives and a number of buyers left Bernie’s.
This Week in Consumer Electronics (TWICE) reported that Bernie’s president and chief operating officer Mike Honeyman has departed, along with marketing and merchandising vice president John Schlenner.
Honeyman and Schlenner were the highest-ranking executives under CEO Milton Rosenberg, who owns a majority stake in the company.
Additionally, Bernie’s has withdrawn from a Long Island-based buying group of which it had been a member for years, TWICE reports.
In its statement, company officials said Bernie’s was “able to hold its own against its competition until the economic downturn.”
The company said it is asking the court permission to honor customer deposits, gift cards and rebates, and that any extended warranties sold by the company are with a third party insurer and will continue to be honored.
Connecticut is home to eight of Bernie’s 15 New England stores. The rest are in Massachusetts and Rhode Island.
Bernie’s was founded in 1947 and evolved from a single-location gas station to a five-store TV and appliance chain in 1985, according to its Web site.
Rosenberg said he was not yet ready to discuss plans for the future.
