CPI Corp. files for bankruptcy

ST. LOUIS (AP) -- CPI Corp., a St. Louis-based operator of more than 2,000 U.S. portrait studios that abruptly closed its outlets last month, has filed for bankruptcy.

CPI listed $10.4 million in assets and $135 million in debt in a filing on Wednesday in Delaware.

CPI's sudden closure of its portrait studios, many situated inside Wal-Mart, Sears and other stores, resulted in layoffs of more than 4,300 workers and left many customers hanging.

It wasn't clear if customers would be reimbursed for orders paid for but unfilled, though the company said in the filing it didn't expect to have funds available for unsecured creditors, which usually includes customers. A message left with CPI's attorney, Scott Cousins, was not returned. CPI's website has been shut down except for a brief message about closure of the studios.

As the popularity of digital photography cut into its sales, CPI revealed in a Securities and Exchange Commission filing in March that it owed $98.5 million, including unpaid principal of $76.1 million.

CPI had warned in earlier SEC filings that failing to buy more time from lenders could force it to liquidate, and the company last year hired an investment bank to explore a possible sell-off. Also in March, CPI's chief marketing officer and executive vice president resigned after a seven-year tenure.

Sears Holding Corp. has said it was working with CPI to fulfill portrait orders for customers. CPI managed and operated Sears Portrait Studios as a licensed business.

About 100 former CPI employees have filed suit seeking back vacation pay.