updated 5/4/2009 2:45:56 PM ET 2009-05-04T18:45:56

Discount retailer Filene’s Basement said Monday that it has filed to reorganize under Chapter 11 bankruptcy protection, less than two weeks after its new owner said it was reviewing “all available options.”

The privately held company, based in Burlington, Mass., and recently acquired by the Buxbaum Group, also reached a deal that will let Crown Acquisitions and partner The Chetrit Group buy 17 of its 25 stores for $22 million. Those stores include flagships in Boston and New York.

The agreement is subject to a bankruptcy court auction, which is expected in about five weeks. The auction will allow other companies to submit bids for the 17 stores, as well as for the rest of the Filene’s Basement locations and the chain’s other assets.

New York-based Crown, a real estate and asset management company, and Chetrit plan to continue running the 17 stores under the Filene’s Basement name. The companies said they will not liquidate inventory or real estate and hope to grow the business through capital infusions to the most profitable Filene’s Basement stores.

Chetrit, also based in New York, already owns a Filene’s Basement store in Manhattan. It also owns the Sears Tower in Chicago, the tallest building in the U.S. The Sears Tower will change its name to Willis Tower later this year.

Buxbaum Group, a California-based liquidator, acquired Filene’s last month through an affiliate company, FB II Acquisition Corp. The sale came after the previous owner, Retail Ventures Inc., said the chain was experiencing “significant liquidity problems.”

Filene’s Basement, known for its “Running of the Brides” annual wedding gown sale, was founded more than a century ago in Boston as a place for the Filene’s department store to sell excess merchandise.

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