Ritz Camera files for Chapter 11 Bankruptcy (Ritz Camera & Image, LLC)
Ritz Camera & Image, LLC and its affiliate, Ritz Interactive, LLC, filed for Chapter 11 on June 22, 2012 under Case No. 12-11868 in the United States Bankruptcy Court for the District of Delaware before the Honorable Kevin Gross.
Lead counsel for the Debtor is Patrick J. Reilley of Cole, Schotz, Meisel, Forman & Leonard (www.coleschotz.com).
First Day Hearings are set for June 25, 2012 at 2:00 p.m. ET
The proof of claim form may be downloaded here: Ritz Camera Proof of Claim (free registration required) . No bar date has yet been set.
Ritz Camera & Image, L.L.C.
According to the Debtor’s filings, Ritz Camera & Image, L.L.C. (“RCI”) is a limited liability company organized under the laws of the State of Delaware. Its headquarters is located at 6711 Ritz Way, Beltsville, Maryland 20705. RCI is the largest specialty camera and image chain (“Photo Stores”) in the United States. The Photo Stores together comprise the industry leaders in providing cameras, accessories, photographic and digital imaging equipment and other image products. As of the date of the filing of RCI’s Chapter 11 petition (the “Petition Date”), RCI operates approximately 265 Photo Stores in over 30 states throughout the country.
According to the Debtor’s filings, RCI traces its origins back to the prior owner of the business, Ritz Camera Centers, Inc., which was founded in 1918. On February 22, 2009, after struggling to meet the challenges of the dramatic change in the industry from film-based imaging to digital, as well as the aftermath of the 2008 national financial crisis, Ritz Camera Centers, Inc. filed in this Court a voluntary petition for relief under Chapter 11 of the Bankruptcy Code [Case No. 09-10617 (MFW)]. During the course of that case, Ritz Camera Centers, Inc. conducted an auction sale of substantially all of the remaining assets of the business at the time of the auction. After a robust auction process, RCI was declared to be the winning bidder, and on July 23, 2009, the Court entered an order approving the sale of the assets of Ritz Camera Centers, Inc. to RCI. The transaction closed on July 24, 2009.
According to the Debtor’s filings, at the time of the closing of the sale, RCI was owned by David Ritz and certain members of the Ritz family and others.
According to the Debtor’s filings,In December 2010, RCI refinanced its then existing secured line of credit with Crystal Financial, LLC, which provided a $ 25 million credit facility described in greater detail below. To meet RCI’s need for additional financing or capital, RCI engaged an investment banker to solicit junior capital to provide RCI with the additional capital necessary for the long term success of the business. In August 2011, those efforts culminated in the closing of an agreement with Transom RCI Holdings, LLC (“Transom”), which provided an additional $ 8 million of capital in the form of the debt and equity interests described below. As part of that transaction, the Ritz family, through its controlled entity, RCI Investors, LLC, became a minority owner ofRCI’s business.
According to the Debtor’s filings, RCI’s prior twelve-month net sales through April 30, 2012 totaled approximately $254 million.
Ritz Interactive, LLC
According to the Debtor’s filings, Ritz Interactive, LLC (“RI”). RI is a Delaware limited liability company. Its headquarters is located at 2010 Main Street, Suite 550, Irvine, California 92614.
According to the Debtor’s filings, RI, founded in 1999, originally had separate ownership from RCI. RI is an e- commerce network of interactive websites including RitzCamera.com, WolfCamera.com, BoatersWorld.com, CameraWorld.com, PhotoAlley.com, eAngler.com, ScrapbookingAlley.com, NeedleCraftsEtc.com, CeilingFansandMore.com, and ShopAtShark.com, which provide online shoppers with a wide selection of branded products at competitive prices. Historically, RCI and Ritz Camera Centers, Inc. were each, at the time of their respective ownership of the business, RI’s primary vendor, from which RI purchased most of its inventory for fulfilling customer purchase orders. RI also licenses trademarks and other intellectual property from RCI and, previously, from Ritz Camera Centers, Inc.
According to the Debtor’s filings, on August 19, 2011, Ritz Interactive, Inc. (“RII”), the predecessor to RI, filed a voluntary petition for relief under Chapter 11 of the Bankruptcy Code in the United States Bankruptcy Court for the Central District of California, Santa Ana Division [Case No. 8:11-21690-ES]. On February 14, 2012, the court confirmed RII’s Plan of Reorganization dated as of September 20, 2011 (the “RII Plan”), which became effective on February 21, 2012. As part of the RII Plan, RII was reorganized and converted from a corporation to the Delaware limited liability company it is today, and RCI became RI’s sole owner and member. RI continues to manage and operate the online sites, including RitzPix.com, through which customers may fulfill all of their imaging needs.
According to the Debtor’s filings, RI’s twelve month net sales for the calendar year ended December 31, 2011 totaled approximately $36 million.
According to the Debtor’s filings, RCI made significant strides since its fonnation in 2009 to move toward profitability. It made a profit in the second half of 2011, and merchandise sales were significantly improved in May 2012. Even with this recent success, however, RCI was restrained by a lack of sufficient liquidity and capital to sustain its operations with its current store count. This deficiency proved too much for the company to overcome. Although significant efforts were made to obtain the necessary capital and liquidity to provide for the working capital needs ofRCI, those efforts were not sufficiently successful to permit the company to restructure outside of Chapter 11.
According to the Debtor’s filings, accordingly, the Debtors filed their Chapter 11 petitions to enable RCI to reject its unprofitable leases, improve its cash flow, and to restructure its debts, while preserving their valuable business operations and maximizing the value of their business and assets for the benefit of their creditors and other parties in interest.
The Debtors have a number of other business names and does business as: Against the Elements dba Big Print Central dba Boater’s World dba Boater’s World Discount dba Boater’s World Marine dba Boatersworld.Com dba Boating Made Better! dba Camera World dba Cameraworld.Com dba Captain’s Club dba Capture Your World dba Dean’s dba Discover The Advantage! dba Frequent Foto dba Inkley’s dba Kits Cameras (And Design) dba OTE On The Edge dba Outer Banks Outfitters (And dba Outerbanksoutfitters.com dba Photronic dba Photronic Depot dba Photronic Imageination dba Photronic Image1nation dba Powerboat Design dba Print@Wolf dba Printawolf.Com dba Proex dba Quantaray dba Ritz Big Print dba Ritz Blitz dba Ritz Camera dba Ritz Interactive dba Ritzcamera.Com dba Ritzcamera.Com & Electronics dba Ritzelectronics.Com dba Ritzpix dba Sea Bowld dba The Boat House At Boater’s dba The Camera Shop Inc (Design) dba Wolf Camera & Video dba Wolf Camera (Design) dba Wolf Camera (Stylized) dba Wolf Camera Portrait Studio dba Wolf University dba Wolfcamera.com dba Wolfexpress
Ritz Camera files for Chapter 11 Bankruptcy (Ritz Camera & Image, LLC) on June 22, 2012.