Vacuum Manufacturer Oreck Files for Chapter 11 Bankruptcy Help
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Vacuum Manufacturer Oreck Files for Chapter 11 Bankruptcy Help

May 13, 2013

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Oreck Corporation, a manufacturer of vacuums and other cleaning accessories, is filing for Chapter 11 bankruptcy, according to a report from The Tennessean.

Sources say the industry giant, which is based in Nashville, Tennessee, is looking to restructure its finances in order to sell the company, a common practice companies that go through bankruptcy.

But consumers who have relied on the company for their household cleaning supplies should not panic, according to a statement released by Oreck last week.

In the statement, Oreck said it "will continue to operate in the ordinary course of business while the sale process takes place, with authorized and exclusive dealers and other trade customers continuing to receive product for sale to ultimate consumers."

Despite the company’s decision to continue its operations, it is a shell of its former self, as the recent recession and increased competition from foreign companies took a heavy toll on its financial health.

The company experienced two waves of mass layoffs in October 2012 and January of this year, according to sources, although the company’s chief executive officer, Doug Cahill, claims the layoffs were a result of Oreck’s move away from direct sale, not any need to cut costs.

Today, Oreck employees 70 workers in its corporate headquarters in Nashville, and also has more than 300 employees at the 96 retail stores owned by the company. In addition, Oreck still employs 250 workers who help produce the company’s products at a factory in Cookeville, Tennessee.

And after the company goes through the bankruptcy process, and sells its assets, it will likely keep its plant operations and corporate offices in Tennessee, according to sources.

Thus, the company anticipates that its eventual sale will not lead to much turmoil for employees or customers. The iconic vacuum maker was founded in 1963 by David Oreck, who launched the company after buying a discarded vacuum cleaner design from Whirlpool.

He reportedly sold his first vacuum cleaners through the mail. Oreck’s modest company grew rapidly, and he eventually built a large factory in New Orleans, where the company was headquartered for several years. But after Hurricane Katrina destroyed much of the city in 2005, Oreck shifted most of its core operations to Nashville.


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