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Cantwell's files for bankruptcy Ashland store will run as usual, owner says By DAVID PRESZLER Plagued by $3 million in operating debts from its unsuccessful expansion into Medford, Cantwell's Food Stores has filed for bankruptcy. Owner Tom Cantwell said Monday that the Chapter 11 reorganization had been in the works for six months and was driven by the struggles of the two Medford stores, both of which closed last year. "There just weren't enough sales," he said. Cantwell's Ashland location will stay open and operate as usual during the reorganization. "Ashland's always made money, and it's the one that will pay off the Medford stores," he said. Cantwell estimated it would take him about 10 years to pay off the debt. Creditors gathered Friday in Medford following the Feb. 17 filing in U.S. Bankruptcy Court in Eugene. Additional creditors have until June 17 to file claims. A disclosure statement and reorganization plan still are being worked out, but Cantwell said the basic plan makes sure every creditor is repaid. "It calls for everyone to get paid 100 percent," he said. Since opening in 1993, the Ashland Cantwell's store has drawn a loyal following with its emphasis on health and gourmet foods. Cantwell's expanded to Medford in 1997, leasing 25,000 square feet off Black Oak Drive. In January 1998, Cantwell opened a Medford store on Progress Drive. But despite market studies that showed Medford residents wanted a gourmet grocery store, the two stores never attracted a large customer base, company officials said when the stores closed. The Progress Drive store became a source of controversy last September when Cantwell leased the empty building to Castle Superstores, an Arizona-based sex shop chain. Cantwell said Monday that the Progress Drive property and store were not included in the bankruptcy, which is limited to operating debt. The Ashland store space is leased. Medford's Black Oak Drive store closed in the throes of the sex-shop controversy, but Cantwell said neither the closures nor the bankruptcy has anything to do with the controversy. "The reason Castle is there is because the (Progress Drive) store closed," he said. "It was already closed and the other one was in its final days. It had nothing to do with that. It just wasn't making money." Cantwell opened his first market in Santa Barbara, Calif., in 1978 and moved to Southern Oregon in 1990. Today's Business Index Mail Tribune Copyright � The Mail Tribune 1999, Medford, Oregon USA