Lenox Group filed for bankruptcy protection in the US Bankruptcy Court for the Southern District of New York, citing economic conditions and an excessive debt load.

The Eden Prairie, Minn., housewares retailer plans to secure $85 million in debtor-in-possession financing to fund its operations while in Chapter 11 proceedings.

Lenox's largest shareholders include New York hedge funds Clinton Group, which holds an 18.3% interest, and Ramius Capital Group, which owns 13.4% alongside Barclays Global Investors, according to the company's last proxy filing.

Weil, Gotshal & Manges is serving as counsel to Lenox, while Berenson & Co. is providing it with financial advice.

"After exhausting all other possibilities and considering the current state of credit markets and the economy, we determined that the best way to complete a restructuring of the balance sheet and protect our franchise value was to pursue a sale of the company under Court approval in a Chapter 11 proceeding," said Marc Pfefferle, chief executive of Lenox Group.

Lenox was carrying $1.2 billion in long-term debt through June 28, 2008, according to its most recent quarterly filing with the Securities and Exchange Commission.

The company is planning to sell its business assets to its lenders that include UBS via a court-approved transaction. It is expected to be part of an overall bidding process for Lenox, which expects to file its first-day motions with the court Monday.

Lenox sells china, collectibles, jewelry, silverware and other related products through specialty and department store locations in the US and Canada, as well as from its own company-operated retail stores, website and catalog. Its principal brands include Lenox, Dansk, Gorham and Department 56.

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Bankruptcy Financial services industry Restructuring