Pacific Linen has filed for protection under Chapter 11 of the federal bankruptcy code while the company reorganizes after closing eight unprofitable stores, including one in the Layton Hills Mall and one in Taylorsville-Bennion.
The company, a chain selling bedroom and bathroom accessories based in Bothell, Wash., still has 24 stores in Utah, Washington, Oregon, Idaho, Colorado, Kansas, Alaska and Nevada. The only store left in Utah is located at 1102 Fort Union Blvd.Linda Kelley, Layton Hills Mall manager, said the company posted signs on the store doors asking customers to shop at the Midvale store. Employees told her they were "remerchandising" and then put paper on the windows so nobody could see in.
Several calls to officials in the corporate headquarters went unanswered until a media release was issued about the bankruptcy protection. Pacific Linen occupied 18,000 square feet in the mall for four years, Kelley said.
The company's Canadian subsidiary, Pacific Linen Canada Inc., which operates 10 stores in five provinces, has not filed for insolvency protection.
Several days ago, the company's board of directors accepted the resignation of William E. Shepherd as president and chief executive officer. He has agreed to remain as a consultant as needed.
Federal bankruptcy judge Judge Samuel J. Steiner has entered an order permitting the company to honor payroll, related employee benefits, gift certificates and returns of merchandise.
A preliminary hearing on the company's $35 million line of credit from Fleet Capital Corp. will be held on Wednesday, April 24, in Seattle.