Color Tile Inc., the floor-covering retailer that has been struggling to reorganize under bankruptcy court protection, is liquidating its stores because of plummeting sales and pressure from lenders.

The company received approval to shut down from a bankruptcy judge in Delaware on Monday, after officials of the Fort Worth-based company predicted they could raise as much as $49 million though "going-out-of-business" sales and selling the chain's real estate holdings.

At a hearing Monday, executives said all of that money is slated to go to the banks that are Color Tile's secured creditors, which will leave nothing for unsecured creditors.

Color Tile, which was founded more than 50 years ago and was once the nation's largest floor-covering retailer, had more than 600 outlets when it filed for bankruptcy protection in January 1996. But the chain was hurt by the expansion of home improvement chains Home Depot Inc. and Lowe's Cos. and has been closing stores ever since then. Last week Color Tile announced that it would close its remaining 195 company-owned stores and lay off 831 employees nationwide.

The chain's 60 independently owned franchised locations, including stores in Herndon and Winchester, are not affected by the decision and will not close.

Color Tile had 14 stores in the Washington area, but recently closed eight of them. The remaining six outlets will close by Friday, along with the rest of the chain's stores nationwide, store employees said.

Andre Henderson, a salesman at Color Tile's Rockville store, said employees were notified on Thursday that the chain is closing, but he said the company has been unable to tell employees whether they will get the money in their company-administered retirement accounts.

"Ive got $50,000 tied up {in the retirement plan} and I've got a wife and kids and house and a mortgage," Henderson said. "I've been a loyal employee for 15 years, and what am I going to do? I've got to find another job, but all in all, if they would just give me my money I'd be okay."

A receptionist at the company's headquarters yesterday said no one was available to answer questions regarding the liquidation.

The decision to close the chain also has created a hardship for some consumers who recently put down deposits on flooring, Jack McLaughlin, an assistant U.S. trustee, told Bloomberg News. More than $5 million in deposits is involved, he said.

Henderson said customers who have ordered goods from Washington area stores but have not yet received them should come into the store and fill out a form requesting a refund by mail. He said the stores have been told not to give anyone their money back directly.