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Koala Blue to Liquidate, Not Reorganize: The fashion retailing operation started by actress-singer Olivia Newton-John has petitioned to convert its Chapter 11 bankruptcy reorganization filing, made a year ago, to a Chapter 7 liquidation plan, according to records in Los Angeles bankruptcy court. At its peak, the Van Nuys-based chain operated more than 60 stores across the globe, including shops in Australia, France and Hong Kong. However, Koala Blue is now operating only its flagship shop on Melrose Avenue and a warehouse, according to its bankruptcy trustee. Koala Blue executives blamed the company’s failure on an overly ambitious expansion.