Crazy Eddie Electronics Stores Seeking Chapter 11 Protection
EDISON, N.J. — Crazy Eddie Inc., the flamboyant electronics retailer, filed for protection from creditors Tuesday under Chapter 11 of the federal bankruptcy code but pledged to keep its stores open.
Five creditors had filed a petition for involuntary bankruptcy against Crazy Eddie on June 6, seeking to recover $860,000.
The company initially said it would fight to have the filing dismissed. But Peter A. Martosella, acting president and chief executive officer, said the petition caused a series of problems that forced Crazy Eddie to turn to Chapter 11.
“The action of the five creditors, which we believe was ill-advised, caused a disruption in our bank-credit facility and related business and cash flow problems requiring the company to seek the protection afforded it under Chapter 11 of the bankruptcy code,” he said in a statement.
Martosella added that the company had been negotiating an out-of-court debt restructuring with its creditors.
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