Wet Seal files for Chapter 11 Bankruptcy protection

US teen fashion retailer Wet Seal has filed for bankruptcy protection a little over a week after news broke that the retailer discharged 3,700 employees and shut down 338 stores.

According to the filing, the struggling fashion chain listed assets of 10 million dollars to 50 million dollars and liabilities of 100 million dollars to 500 million dollars. Wet Seal previously warned that it could seek to restructure its business under the provisions of the US Bankruptcy Code if it was unable to resolve its cash issues following its fifth consecutive quarter of losses.

Wet Seal has arranged for a 20 million dollar term loan facility though B. Riley Financial Inc, that will allow the retailer the chance to fund its daily operations, which include paying its sellers and landlords. However, the loan still needs to be approved by the US Bankruptcy Court for the District of Delaware.

The struggling teen retailer aims to keep operating as many stores as possible during its bankruptcy process, following the closure of two-thirds of its stores. Wet Seal is said to have 173 stores operational in 42 states and Puerto Rico as of Thursday this week.