Creditors Petition to Force Adray’s Into Bankruptcy

Twelve days after Adray’s CBS Premiums in Orange closed its doors at the height of the holiday shopping season, three creditors moved to force the discount appliance and electronics store into bankruptcy.

The petition was filed Monday by Nikon Inc., Pentax Corp. and Tamron Industries Inc. The camera companies are claiming Adray’s owes them a total of about $396,000.

Adray’s owners could not be reached for comment Friday. Attorneys for the company and owner Lou Adray both declined to comment.

Adray’s shut down without explanation on Dec. 2, leaving a note on the door that said, “Closed for good.”

City officials, customers and merchants near the store said they were mystified by the closure. A telephone message said customers with money on deposit with the store would be receiving a claim form in the mail that they could submit for a refund.

Geoff Berman, vice president of Development Specialists Inc., a turnaround management consulting firm in Los Angeles, said Friday that his office had been retained to help Adray’s “manage the liquidation process,” but the bankruptcy filing has changed that.

“Our involvement, as far as I know, is effectively over,” he said. He declined to comment further.

Some observers have speculated that the company, a fixture in the city for three decades, may have been hurt in recent years by competition from major discount chains Good Guys Inc. and Circuit City Stores, which operate down the street from the family-owned business.

The petition for Chapter 7 “involuntary” bankruptcy was filed in U.S. Bankruptcy Court in Santa Ana. Such petitions can be filed when at least three creditors claim debts totaling at least $25,000.

Essentially, the creditors are asking the court to declare that the company is insolvent. The objective is to achieve a fair and orderly settlement of accounts.

Adray’s has 20 days to respond to the petition.