Chaos! Comics has shut down all operations following a filing for Chapter 7 bankruptcy, the company told CBR News on Friday.

Chaos!, which is best known for its sexy horror heroines, as epitomized by flagship character Lady Death, officially closed up shop on Thursday, company Director of Operations Adam Goldfine said Friday.

"It wasn't fair for us to continue at [freelancers'] expense," Goldfine told CBR News. "At the point that, we realized that we stopped making promises we knew we couldn't meet."

Brian Miller, founder of Hi-Fi Colors, which did coloring for Chaos for much of 2001, said they had seen evidence of Chaos!'s financial troubles for some time.

"Hi-Fi chose to scale back the number of titles we worked on for Chaos!

Comics around of October 2001 due to ever frequent late payments," Miller told CBR News on Friday. "We ended our working relationship with them in February of this year for fear that something like this might happen.

"I am really disappointed with Chaos! Comics, personally. They kept using people right up until the end, telling them that everything was going to get better. In any business, communication is the biggest key to success. I clued in early on that when they dodged questions about late payments that all was not well in the world of Chaos! It is a real shame that they didn't handle themselves better.

"I think that a lot of hard working, innocent individuals and companies will end up paying the price for what essentially boils down to poor management and non-existent communication between Chaos! Comics and its vendors."

Filing for Chapter 7 bankruptcy effectively is a straight bankruptcy and liquidation of all assets Chaos! holds, which in turn wiped their debts clean. The company's remaining assets will be turned over to their court-appointed trustee who in turn will sell them off and pay off debtors, most notably including freelancers who have done work for the company.

According to Goldfine, no new books will be hitting the shelves and the future of the characters and comics is up in the air.

"That's a good question. I'm not quite sure yet. The whole process that we've gone through has been a tough battle. We attempted to thrive in the face of some pretty tough circumstances and not so great economic conditions. That's a trying expense. It really does take a lot out of you.

"Hard to say what the real cause was. The source of it really was our declining sales. What caused our declining sales is really difficult to say."

As for the Lady Death movie, which was previewed only two weeks ago at Comic-Con International in San Diego and was scheduled for a late 2003 release, its future is equally uncertain.

"We're not sure at this point," Goldfine said. "We're doing what we can to make sure it can continue."

Goldfine said that simply filing to reorganize the company under Chapter 11 bankruptcy "didn't seem worthwhile."

"It's tough. It's sad for us. We put a lot of heart and soul into this. We put a lot of ourselves into Chaos! Comics. It really is tough to let all that go."

CBR Executive Producer Jonah Weiland contributed to this story.