Vacuum-Maker Oreck Corp. Files For Bankruptcy

Vacuum-cleaner maker Oreck Corp. filed for Chapter 11 bankruptcy protection. According to court filings, the company could reach an agreement to sell its assets in a matter of days and restructure its finances. This could put the company and its 621 workers back into the hands of founder David Oreck and his family.

The Nashville, Tennessee-based company says the daily operations at the vacuum maker will continue without interruption.

"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 company said.

At the end of January and in October 2012, Oreck fired an undisclosed number of employees.

The company released a statement Tuesday with few details. Oreck's bankruptcy filings depict a company fighting to remain afloat amid management departures and falling sales in the currently stagnant economy.

According to court filings, Oreck is "in a precarious financial position," sales "are quickly deteriorating," and it "simply cannot generate cash fast enough to cover expenses as they arise."

Former CEO Doug Cahill left in March after making several unsuccessful attempts to buy the company from its owner, Black Diamond Capital Management, he said.

"I didn't like the direction they were taking or how they were dealing with us," Cahill said, "so I resigned."

Cahill added that what is happening to Oreck is unfortunate. "It's hard to believe a 50-year-old company can be in this bad of shape in 50 days," he said.

To maintain operations, Oreck intends to borrow $11 million through a special type of financing "provided for financially distressed companies under Chapter 11," USA Today reports.

Oreck was founded in in 1963 by David Oreck, who started by selling vacuum cleaners by mail.