The Nashville, Tennessee-based Oreck Corp. has filed for Chapter 11 bankruptcy protection, according to USA Today. The producer of vacuums and other cleaning materials is expected to reach an agreement to sell off its assets in the near future.
A statement from Oreck did not provide many details about what led to the company filing for bankruptcy. According to The Tennessean, bankruptcy filings show that Oreck was struggling under the pressure of management departures and poor sales.
The court filings said Oreck was "in a precarious financial situation" and that they could "simply not generate cash fast enough to cover expenses as they arise."
Before leaving the company in March former CEO Doug Cahill had attempted to by the vacuum producer from Black Diamond Capital Management, an asset management firm, reports The Tennessean. Cahill had hoped to have had the opportunity to save the struggling company.
"I didn't like the direction they were taking or how they were dealing with us so I resigned," Cahill said. "It's hard to believe a 50 year-old company can be in this bad of shape in 50 days."
A statement released by Oreck suggested that the company would be able to sell all of its assets over the next couple of days, although a liquidation may ultimately be needed. While undergoing this process Oreck plans on doing business as usual.
"Oreck will continue to operate in the ordinary course of business while the sale process takes place, with authorized and exclusive dealers and other trade customers continuing to receive product for sale to ultimate consumers," the statement read.
Oreck employs roughly 320 people in the Nashville area spread between corporate offices and the production plant and an additional 325 people in retail stores across the nation, according to USA Today.
According to The Tennessean, Oreck is expecting that production will remain in the Nashville area after a sale is completed.
