SEATTLE (CN) - Seattle-based coffee chain Tully's has filed for bankruptcy, unable to compete with Starbucks.
Tully's said it hopes to emerge from Chapter 11 reorganization sometime in 2013.
Scott Pearson, president and CEO of TC Global Inc., said in a statement that the move was "the right thing to do for the future of the company."
Tully's declared assets of $5.9 million and liabilities of $3.7 million. A list of the top 20 unsecured creditors includes coffee vendors, business consultants, the Seattle Times and Seattle law firm Carney Badley Smith & Spellman.
One of the largest debts is for $346,000 to Green Mountain Coffee Roasters, which bought Tully's wholesale business and brand in 2009 for $40.3 million in cash.
Tully's said it has $66,800 cash on hand.
Tully's will close "a number" of its unprofitable shops, according to the CEO's statement.
The bankruptcy filing will not affect Tully's online store, which now is owned by Green Mountain. Tully's said it will continue to source coffee for its retail stores under its supply and licensing agreements with Green Mountain.
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