San Jose-based Mi Pueblo has filed for federal Chapter 11 bankruptcy protection.
The grocery chain says it will remain open for business.
Over the next several months, a reorganization plan will be submitted to the federal bankruptcy court for consideration and approval.
“Filing for bankruptcy gives our company a unique opportunity to reorganize ourselves in a manner that will make us stronger and more competitive,” Mi Pueblo CEO Juvenal Chávez said in a statement.
Mi Pueblo team members were informed of the filing Monday morning.
The chain has 21 stores in the Bay Area, Monterey Peninsula and Central Valley.