Eddie Bauer Holding, (EBHI) a nationwide outdoor clothing company, filed for Chapter 11 bankruptcy protection Wednesday.

The retailer made the filing in U.S. Bankruptcy Court in Delaware, saying it had around $476 million in assets and $427 million in debt.

Meanwhile, the Seattle-based company founded in 1920, said in the court filing that it plans to sell nearly all of its assets to an affiliate of CCMP Capital Advisors. It also said it has limited guarantees from two affiliates of CCMP for some of its payment obligations.

The company has reached an asset purchase agreement through a bankruptcy process, subject to an auction and Bankruptcy Court approval for $202 million in cash with working capital and similar adjustments.

Eddie Bauer said in a written release that CCMP Capital intends to continue the business’ operations, and has agreeing to keep the stores and employees on board. However, the sale is not final to CCMP Capital, and it could still go to any higher and better bidder approved by the Court. 

The primary goal as described in a release by the company is to turn “the business into a financially stronger entity with substantially less debt and a better position for the future. The Company currently anticipates completing the sale process in 60 days or less.”

In most recent reports, the clothing retailer had a net loss of $44.5 million, and shares have continued to fall due as rumors of a bankruptcy filing mounted. The company has $187.9 million in long-term debt and has been hoping to shake it off, turning it into equity.

“The first quarter was a difficult one, as the sharp downturn in the economy took its toll on our sales,” said Neil Fiske, President and Chief Executive Officer in a written statement on the first quarter 2009 results. “We continued to focus on cost cutting and cash flow management, which helped mitigate the impact of lower sales.”

Eddie Bauer, a Seattle-based company founded in 1920, operated 251 retail stores and 119 outlet stores at the end of the first quarter of 2009, compared with 247 retail and 118 outlet stores in 2008.

Edie Bauer said its legal advisor is Latham & Watkins LLP, its financial advisor is Peter J. Solomon Company, and its restructuring advisor is Alvarez & Marsal. CCMP Capital's legal advisor is Weil, Gotshal & Manges LLP.

--Ken Sweet contributed to this article.