Oreck Files for Chapter 11 Bankruptcy

The company, based in Nashville, Tenn., said it would continue normal operations while it proceeds through the bankruptcy process. The company employs about 650 people at its corporate offices, manufacturing plant and 96 company-owned retail outlets.

Oreck is owned by Black Diamond Capital Management, an asset management firm, and it moved to Nashville from New Orleans following Hurricane Katrina in 2005.

The company said it will borrow $11 million through debtor-in-possession financing to maintain its operations. While the company may reach an agreement to sell its assets in the next few days, the firm noted that if such a deal is not made, “it is possible that a liquidation and wind down of the Debtors may ensue.”

Oreck’s vacuum cleaners were pitched heavily by direct mail and in TV infomercials beginning in the 1970s. The company was founded by David Oreck in 1963, and its vacuum cleaner was based on a design it acquired from Whirlpool.