Autobacs Strauss Inc, a wholly owned subsidiary of Japanese auto parts retailer Autobacs Seven <9832.OS>, filed for Chapter 11 bankruptcy protection in a Delaware court on Wednesday, court documents showed.


The company, which operates 86 retail store locations in New York, New Jersey and Pennsylvania, listed assets of about $75 million and liabilities of about $72 million, according to court filings.
Autobacs Seven created the Autobacs Strauss unit after it agreed to acquire Strauss Discount Auto out of bankruptcy protection for about $55 million in 2007. Autobacs Strauss said it plans to use the bankruptcy process to fix its operations and close some underperforming stores.

The company had entered into a series of loan agreements with Autobacs Seven for infusion of working capital and implementation of a new business strategy, court filings showed.

In December, Autobacs Seven said it was no longer willing to provide additional working capital.
Earlier this month, Autobacs Seven gave a written notification to Autobacs Strauss, saying the loan agreements were in default and declared all sums due and immediately payable, according to court filings.

The company owes Autobacs Seven about $42.4 million, it said.

The South River, New Jersey-based Autobacs Strauss said it employs about 1,450 people and that it plans to use the Chapter 11 process to emerge as a cash flow positive entity.
The case is In re: Autobacs Strauss Inc, No 09-10358, U.S. Bankruptcy Court, District of Delaware. (Reporting by Santosh Nadgir in Bangalore; Editing by Deepak Kannan)