The chain is scheduled to make its first court appearance during its third trip through Chapter 11 on Thursday when Judge Jacqueline P. Cox of the U.S. Bankruptcy Court for the Northern District of Illinois in Chicago will consider first-day motions, including interim use of cash collateral.

Cox is set to weigh Mark Shale's store-closing motion on Aug. 29.

The Woodridge, Ill., retailer blamed its Tuesday bankruptcy filing -- its third in its 83-year history -- on financial difficulties stemming from a significant decrease in women's clothing sales beginning in fall 2010. That, in turn, resulted from a combination of factors, including a change in merchandising and marketing programs, a general decrease in the sale of tailored clothing and the general economic downturn occurring in Chicago and the nation over the past several years.

Due to the company's "severe cash shortage," Mark Shale has failed to take delivery of fall merchandise that is now on order, the company said. Despite its best efforts to attract new capital or a buyer, the company has been unsuccessful, and its sales have been rapidly declining due to a lack of new merchandise for the upcoming fall and winter seasons. In addition, the debtor has lost several key employees as its sales have declined.

Prepetition, Mark Shale solicited offers from three national liquidators to assist it in either raising new capital, locating a buyer or conducting store-closing sales.

Gordon Brothers Retail Partners LLC submitted the best financial offer, therefore it was selected as the debtor's liquidator, court documents said.

In a Tuesday motion, Mark Shale said that to save it from incurring additional expenses associated with continuing to operate, the debtor proposed that store-closing sales begin at its three retail stores as soon as possible.

As proposed in an agency agreement between Mark Shale and Gordon Brothers, clearance sales would be held for a limited period of time. During that period, the company would continue its efforts to locate a buyer or investor for its business.

If Mark Shale could not locate a buyer, then the sales would continue as going-out-of-business sales.

Under the terms of the Monday agency agreement, Gordon Brothers guaranteed Mark Shale would receive an amount equal to 49% of the aggregate retail value of the merchandise included in the sale.

The debtor also would be entitled to 60% of the sale proceeds after certain expenses are paid to Gordon Brothers.

Mark Shale said to maximize its value, store-closing sales should begin immediately because much of its merchandise is seasonal and will decrease in value over time.

Debtor counsel Steven Towbin of Shaw Gussis Fishman Glantz Wolfson & Towbin LLC said "there's always a chance" the company would find an investor, but he declined to specify potential names. Mark Shale's prepetition secured creditors include MS Finco LLC, JOB Investments LLC, Scott Baskin and Harold W. Sullivan.

JOB is owed for a $1 million working capital revolving loan. As of the petition date, the debtor owed its other lenders approximately $4.1 million total.

The debtor said it requires use of the lenders' cash collateral to continue its business operations and maintain and preserve the going-concern value of its assets. The lenders have consented to the use of the funds.

Nondebtor MS Mark Shale Holdings LLC owns Mark Shale and in turn is owned by JOB Investments, Sullivan and three members of the Baskin family.

Mark Shale operates three retail locations in the Chicago area -- at 900 North Michigan Ave. in downtown Chicago and in north-suburban Northbrook and Oak Brook, Ill.

The company commenced business on Aug. 1, 2009, after purchasing all of the operating assets of its predecessor, Al Baskin Co., out of Chapter 11.

Mark Shale LLC, a JOB Investments affiliate, purchased the assets of Al Baskin for roughly $3.54 million, according to The Deal Pipeline.

Court filings did not specify the relation between Mark Shale and MS Mark Shale.

Judge John H. Squires of the Illinois court approved the sale on June 30, 2009. Al Baskin's case was dismissed on March 4, 2010.

The company filed for Chapter 11 the first time in the same court on Nov. 8, 1995, because of decreased sales from an economic recession, declines in value at two of its locations and mistakes in merchandising, The Deal Pipeline said.

After exiting that proceeding on Feb. 25, 1997, as a smaller concern, the company had been operating profitably with sales growth until 2008, when its sales fell to $50.6 million, from $61.7 million in 2007.

Al Baskin has been in business since 1929.

During the 1970s, the company began opening stores in shopping malls under the Mark Shale name.

When it entered its second bankruptcy, in addition to its four Chicago-area stores, Al Baskin had locations in Georgia, Missouri and Texas.

Mark Shale listed $1 million to $10 million in assets and liabilities in its latest petition. Its largest unsecured creditors include United HealthCare Services Inc. (owed $187,496), 900 North Michigan LLC ($151,989), Oakbrook Shopping Center LLC ($124,172), Jack Victor Ltd. ($116,856) and GGP Homart LLC II ($97,133).

Peter J. Roberts of Shaw Gussis is also debtor counsel.

Nancy A. Peterman and Rebecca Rosenthal of Greenberg Traurig LLP represent Gordon Brothers.

Jerry L. Switzer Jr. of Polsinelli Shughart LLP is counsel to JOB, MS Finco and Sullivan.