On January 14, 2009, Gottschalks, Inc. filed a voluntary petition for reorganization under Chapter 11 of the United States Bankruptcy Code. While Gottschalks has a 104-year heritage of serving customers in western markets, they have recently faced considerable challenges to their business as a result of the tightened credit markets and the challenging economic environment. Chapter 11 reorganization provides the legal framework that allows them to keep the business operating normally while they execute one or more options to create value for stakeholders – including pursuing a sale of their business or another transaction with a third-party investor.
They state on their website (visible Jan 18, 2009), "Please be assured that Gottschalks is not going out of business. We will continue business as usual and our stores will continue operating as normal at this time. The filing gives our company the time and resources necessary to address our financial challenges while continuing to provide our customers with the quality brands, great value and exceptional service they expect from Gottschalks."
Hopefully, they will not have to liquidate as others in this retail environment have had to do.