Well-known vacuum company Oreck filed for Chapter 11 bankruptcy after decreasing
vacuum sales. The company will continue operations during the filing,
while in the process of restructuring in hopes of acquiring a buyer. Oreck
is known for producing upright vacuums and cleaning products through online
and direct phone sales, as well as through their Oreck Clean Home Center
locations.
Oreck will use the Chapter 11 filing to restructure company finances and
assets prior to being sold. Documents related to the filing suggest the
company has been unable to generate enough funds to cover necessary expenses
as they arise. Through a debtor-in-possession financing option the company
will borrow roughly $11 million to continue operations. The company claims
they already expect to lose over $3 million in the coming months due to
lack of sales.
Aside from slumping sales, the company is working through management departures
and other issues leading to revenue loss. While the company has let go
some of employees, there are reports of upper management personnel leaving
the company on their own because they were not in favor of where the company
was going (before the filing).
Oreck has provided cleaning products for over 50 years. It was founded
by David Oreck during the 1960s. The company has over 90 company-owned
retail stores and over 500 employees including manufacture workers. The
design for the upright vacuum was originally for a Whirlpool product but
abandoned and picked up by Oreck.
Reference:
http://www.usatoday.com/story/money/business/2013/05/07/oreck-files-chapter-11/2142283/