Linens 'n Things apparently ran out of time to fix up its financial house.

On Friday, the bedding and home furnishings chain filed for Chapter 11 bankruptcy protection in Delaware -- just two weeks after its vendors required "cash before delivery" payment and three weeks after the company hired Financo to look for a buyer.

Linens 'n Things will ask the bankruptcy court to let it close 120 of its 589 stores, including five of its 20 Georgia stores. The stores will close over the next few months, a spokeswoman said.

The five Georgia stores closing are: Perimeter Mall, Atlanta; Uptown Square Shopping Center, Fayetteville; Stonecrest Marketplace, Lithonia; Macon Mall, Macon; and Southlake Pavilion, Morrow.

Filing for Chapter 11 under the bankruptcy code frees a company from the threat of creditor lawsuits while it reorganizes its finances.

The company emphasized that its other U.S. stores will remain open and stocked, and that gift cards will be honored. Its 40 Canadian stores, which are among the best performing in the chain, are not part of the bankruptcy filing.

Other retailers have been hit by cut backs in consumer spending. Sharper Image, Bombay and Lillian Vernon have also filed for bankruptcy this year.

Linens 'n Things blamed the current bad economy, but signs of trouble began when it was taken private by three investors in 2006. Saddled by debt from the $1.3 billion transaction, Linens 'n Things never caught up to rival Bed Bath & Beyond in terms of sales per square foot.

Linens sold $146 in merchandise per square foot in 2007, down from $166 per square foot in 2004, according to a Wall Street Journal story last month. Meanwhile, rival Bed Bath & Beyond sells about $233 in merchandise per square foot, the story said. The segment also faces fierce competition from retail giants like Wal-Mart and Target.

In March, Linens reported a $242.1 million loss for fiscal 2007.

The company's parent, Linens Holding Co., hired restructuring expert Michael Gries of Conway Del Genio Gries & Co. to become the interim chief executive. Current CEO Robert DiNicola will be executive chairman. A company spokeswoman said Friday the chain is not currently looking for a buyer, though it is still retaining Financo.

In the filing, Linens 'n Things said it has fewer than 50 creditors and funds will be available for distribution to unsecured creditors. It has arranged $700 million in debtor-in-possession financing, mainly from General Electric Capital Corp.

--Associated Press contributed to this report.