CPI Files for Chapter 7 Bankruptcy to Liquidate Assets

CPI Corp. (CPIC), a family portrait- photography company, filed for bankruptcy to liquidate its assets after shutting down U.S. operations.

The company, based in St. Louis, listed debt of $135 million and assets of $10.4 million in Chapter 7 documents filed today in U.S. Bankruptcy Court in Wilmington, Delaware. Under Chapter 7 of the U.S. Bankruptcy Code, a trustee is automatically appointed to take over, dismantle the company and sell its assets for the benefit of creditors.

Three Canadian companies including CPI Corp. were admitted under the Bankruptcy and Insolvency Act, Canada’s equivalent of Chapter 7, on April 15 in Ontario’s Superior Court of Justice, according to a U.S. Securities and Exchange Commission filing.

CPI closed all its U.S. and Puerto Rican studio and store operations on April 3, resulting in more than 4,300 employees’ being fired, according to an SEC filing.

Visitors to its website will be greeted with only a message: “After many years of providing family portrait photography, we are sad to announce that all of our U.S. portrait studios are now closed.”

CPI, in business for more than 60 years, offered portrait studios at about 2,700 locations, mostly at retailers Wal-Mart Stores Inc. and Sears Holdings Corp., according to its website and a Dec. 31 statement.

Sales Drop

The company reported net sales for the quarter ended Nov. 10 that fell 26 percent to $69.5 million from $94.6 million for the same period a year prior, according to the December statement. The sales resulted in a loss of $20.2 million, which the company largely attributed to declines in same-store sales.

Secured creditors are owed about $99.4 million, and unsecured creditors are owed about $35.6 million, according to court papers. The company lists a pension liability as its biggest unsecured claim, owing $22.4 million as of Feb. 2. Wal- Mart has an unsecured claim of about $5.9 million, and Sears is owed about $2.8 million in unsecured debt.

The case is In re CPI Corp., 1:13-bk-11158, U.S. Bankruptcy Court, District of Delaware (Wilmington).

To contact the reporter on this story: Michael Bathon in Wilmington, Delaware, at mbathon@bloomberg.net.

To contact the editor responsible for this story: John Pickering at jpickering@bloomberg.net.

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