In its filing, Blue Tulip Corp. blamed the economic downturn and the company's inability to satisfy its debt obligations, the latter listed as totaling $7.3 million. The company also said it would close all two dozen units, which average 4,500 to 5,000 square feet each, by the end of January, and store-by-store going-out-of-business sales were indeed launched this past weekend. Blue Tulip hired Northbrook, IL-based Hilco as a consultant to help facilitate the store closings.

Founded in 2002, Blue Tulip was the brainchild of former Goldman Sachs retail analyst Joseph Ellis, with the financial backing of Lexington, MA-based Highland Capital Partners. The latter's Tom Stermberg, a former CEO of Staples, sat on Blue Tulip's board as managing general partner of the Highland Consumer Fund. In the bankruptcy court papers, Highland Capital Partners is listed as holding a 44% stake in Blue Tulip, with Ellis' stake listed as 13%.

Officials from Highland did not immediately return calls for comment. Both Blue Tulip's corporate and e-commerce websites have been shut down, and all references to the chain have been deleted from Highland Capital Partners' website.