The Associated Press February 23, 2009, 1:47PM ET text size: TT Ritz Camera seeks bankruptcy protection By RANDALL CHASE DOVER, Del. Ritz Camera Centers, the nation's largest retail photography chain, has filed for Chapter 11 bankruptcy protection. The Beltsville, Md.-based company submitted its filing Sunday in federal bankruptcy court in Wilmington, estimating assets and liabilities at between $100 million and $500 million. The list of its top 30 unsecured creditors is led by Nikon Inc. and Canon USA Inc., which are owed a combined $40 million in trade debt. The company said revenue from its profitable photofinishing business has declined significantly with the shift from film to digital cameras, and that 2008 holiday sales were "materially lower" than prior year sales. It also said23 an increase in gasoline prices, along with other economic factors, led to a sharp drop in sales in its Boater's World recreational marine business last year. Ritz has about 800 photo stores in 40 states, operating as Ritz Camera, Wolf Camera, Kits Cameras, Inkley's and The Camera Shops. It also operates 130 Boater's World stores. The company, which has about 6,400 employees nationwide, recorded sales of just under $1 billion last year. "Despite Ritz Camera's continued success in selling cameras and photographic equipment, the loss of revenues and profit margins from the diminution of the photofinishing business proved too much of a burden, coupled with the losses experienced by the Boater's World business in 2008, for Ritz Camera to remain a profitable company under its current structure," Marc Weinsweig of the financial advisory firm FTI Consulting Inc. wrote in a court affidavit Ritz's board has approved the appointment of Weinsweig, senior managing director in FTI's Washington, D.C., office, to serve as interim chief operating officer and chief restructuring officer. In its initial filings, the company is seeking interim court approval of a credit facility of up to $85 million with existing lenders. According to Weinsweig's affidavit, the company would be unable to meet payroll and other expenses without the interim financing approval and would be forced to shut down. According to court records, the company entered into a $200 million revolving credit facility in October 2007 with a group of lenders, led by Wachovia Bank as agent. As of the bankruptcy filing, the company owes the lenders about $47.7 million in revolving credit, and $6.8 million in letter of credit obligations. In January, Wachovia, acting on behalf of the other lenders, imposed additional reserves on Ritz's borrowing base, reducing the company's available credit. "Given the company's internal challenges, including unprofitable store leases and Boater's World losses coupled with the overall economic recession, the company had no choice but to seek relief under Chapter 11 ... to preserve the possibility of being able to restructure its business and financial affairs and continue as a going concern," Weinsweig wrote. In addition to its credit facility with Wachovia and other banks, Ritz owes about $13 billion in debt to other parties under a series of debentures issued in 1995. In addition to Nikon and Canon, Ritz's top unsecured creditors include Fuji Photo Film USA. which is owed more than $8 million. FPL Holdings Inc., a wholly owned subsidiary of Fuji Photo Film Co., invested $197 million in Ritz through purchases of preferred stock from 1996 through 2001, money that was used by Ritz to acquire competitors, including the bankruptcy estate purchase of Wolf Camera in late 2001. According to the bankruptcy petition, FPL would own a third of Ritz's Class A common stock and 35 percent of Class B common stock if it converted its preferred stock.