Tully’s Coffee parent files for Chapter 11 bankruptcy

The parent company of Tully’s Coffee has filed for Chapter 11 bankruptcy protection and will close nine stores this Sunday.

The Seattle-based coffee chain has long struggled under the shadow of Starbucks Corp.

TC Global Inc. filed for bankruptcy protection Wednesday to help eliminate some costs that are keeping the company from being profitable.

It said it is struggling with lease obligations, commodity costs and underperforming stores. The company has more than $3.7 million in debt, according to its court filing.

A hearing is set for Friday in U.S. Bankruptcy Court for the Western District of Washington in Seattle.

Tully’s opened its first store in 1992. It has shops in Arizona, California, Colorado, Idaho, Montana, Oregon and Washington.

After Sunday, 48 company-run stores will remain. Of the 115 employees of stores that are closing, 108 have been offered jobs at other locations, said spokeswoman Heidi Happonen.

There are also 83 franchised or licensed Tully’s locations in the U.S. as well as locations in Asia.

The company expects to emerge from bankruptcy protection sometime in 2013.

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