NEW YORK — Spa Chakra Inc., the financially troubled spa located on Fifth Avenue, has said it received a buyout offer from Hercules Technology Growth Capital Inc., a specialty finance company based in Palo Alto, Calif.

This story first appeared in the December 11, 2009 issue of WWD. Subscribe Today.

As part of the process to successfully complete the sale, Spa Chakra’s chief executive officer, Michael Canizales, said the company has filed for protection under Chapter 11 of the U.S. Bankruptcy Code with the U.S. Bankruptcy Court for New York. As part of the filing, Spa Chakra has arranged for immediate financing from Hercules, which will be used by Spa Chakra to fund normal business operations during the sale process.

“Spa Chakra and Hercules have had an incredibly effective working relationship since 2008 and both parties agree that this current transaction…will have no impact on the day-to-day operations of Spa Chakra. With the immediate financial backing of Hercules, Spa Chakra will continue to provide the highest quality spa services for our clients at our prominent spa locations worldwide,” Canizales said.

Manuel A. Henriquez, co-founder, chairman and ceo of Hercules, said, “Having worked with and provided additional financing to Spa Chakra for the last two years, Hercules recognizes the investment potential that Spa Chakra represents.”

Last week a Chapter 7 filing was commenced against Spa Chakra Fifth Avenue by a relative of the spa’s former owners, Richard Aidekman and Ellen Sackoff, said Canizales, “which is subject to litigation because we dispute the validity of the claim. That petition will be…converted as part of this Chapter 11 process.”