CHS Electronics has filed for bankruptcy protection whilst revealing plans to become a corporate incubator for Web businesses. The failed distributor yesterday said it had filed a voluntary petition for protection from creditors under Chapter 11 of the US bankruptcy code. This would give it protection while it seeks approval for its reorganisation. If the plan gets the go-ahead, it will give creditors equity or debt securities of a new Danish company, Europa IT, formed by ex-CHS CEO Mark Keough. In exchange, CHS' European subsidiaries will be sold to Europa IT. Creditors representing around $275 million in claims against CHS have agreed to support the move, CHS said. It will only work if total claims against CHS are not bigger than $500 million, and it must also get approval from the court overseeing the Chapter 11 filings – US Bankruptcy Court in the Southern District of Florida. Claudio Osorio, CHS chairman and CEO, said: "The reorganised CHS will emerge as an incubator and holding company for Internet companies engaged in business-to-business electronic exchanges, primarily within the IT industry." According to Keough: "The proposed plan offers the best solution for all parties. It allows the European operations to focus on the future as a new company, and it provides the highest value for creditors." Last November it emerged that CHS was under investigation in the US for money laundering.® Related stories CHS quizzed over money laundering claims CHS hit by foreclosure action CHS losses unveiled in full Northamber snaps up CHS' Electronics customers