UPDATE 1-Artes Medical files for Chapter 7 bankruptcy

Tue Dec 2, 2008 7:34am EST

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Dec 2 (Reuters) - Artes Medical Inc ARTE.O, which makes dermal fillers used in cosmetic treatments, filed for Chapter 7 bankruptcy and plans to liquidate as it has been hit by a drop in consumer spending due to the severe economic downturn.

The company, which on Nov. 21 said it may need to explore liquidation, believes its assets will be insufficient to satisfy the claims of all creditors.

It is unlikely that the company's stockholders will be eligible to participate in any distributions of its assets, Artes said in a filing with the U.S. Securities and Exchange Commission. Bankruptcy filings made under Chapter 7 allow a consumer or business to liquidate assets to pay off creditors, while Chapter 11 filings are made by companies seeking to reorganize and pay debts while staying in business.

Shares of the company closed at 7 cents Monday on Nasdaq. (Reporting by Esha Dey in Bangalore; Editing by Himani Sarkar)