Ultimate Electronics Inc., an electronics retailer with stores in Utah, sought bankruptcy protection Tuesday after reporting seven quarterly losses in a row.
Mark Wattles, chief executive officer of video store operator Hollywood Entertainment Corp., has paid $4.4 million to increase his stake in Ultimate Electronics, based in Thornton, Colo., to 31 percent from 10 percent, according to papers filed Tuesday in U.S. Bankruptcy Court in Wilmington, Del.
Falling prices as competition increased and lower-cost technology products hurt the company's sales and earnings, chief financial officer David Carter said in court papers. He said the company's major vendors stopped providing credit last month and required advance payments, creating additional liquidity problems.
Wattles's investment "is the first step and other changes must occur to assure" the company's continued viability, Carter said in court papers. The bankruptcy filing was necessary to give the company "a breathing spell from the demands being placed on them as a result of their lack of liquidity."
Wattles's equity purchase provided funding for the company, spokesman Mac McNeer said. Wattles, who was named chairman, will pick a new board and plans to run the company, McNeer said.
The company listed $329.1 million in assets and $160.6 million in debts, according to court papers.