UPDATE 1-Children's Place Hoop unit files for bankruptcy

(New throughout, adds details from court filings and background)

NEW YORK, March 26 (Reuters) - A unit of Children's Place Retail Stores Inc (PLCE.O) on Wednesday filed for Chapter 11 bankruptcy protection, as part of the children's clothing retailer's plan to exit the Disney Stores business in North America.

Hoop Holdings LLC and two affiliates filed for protection from creditors with the U.S. bankruptcy court in Wilmington, Delaware.

According to the filing, Hoop has more than $100 million and as much as $500 million of both assets and liabilities, and between 10,001 and 25,000 creditors, court papers show.

Neither Children's Place nor any of its other units filed for bankruptcy protection.

The debtor had acquired the Disney Store chain in North America in Nov 2004, and said it now operates 306 stores in the United States and 16 in Canada.

Children's Place and Walt Disney Co (DIS.N) have been in talks since January for the latter to buy back some or all of the stores.

In a court filing, Hoop said it expects to reach an agreement in which Disney would purchase "substantially all" of its assets. Hoop would wind down its remaining operations.

"The debtors believe that approval of the Disney (asset purchase agreement) as quickly as possible in these Chapter 11 cases is the best means available to maximize recoveries for creditors," Hoop said.

Children's Place, based in Secaucus, New Jersey, said on March 20 that it was in advanced talks for Disney to take back about 220 of the stores. It said it hoped to complete a transaction by April 30.

Separately, Hoop is seeking approval to obtain $35 million of debtor-in-possession financing from Wells Fargo Retail Finance LLC to continue operating while in bankruptcy, court papers show. Perry Mandarino of restructuring firm Traxi LLC was named Hoop's chief restructuring officer.

Shares of Children's Place closed Wednesday up 14 cents at $25.50 on the Nasdaq.

The stock has gained nearly 20 percent in the last month but lost more than half its value over the past year, slashing its market capitalisation to about $737 million. (Reporting by Jonathan Stempel; Additional reporting by Robert MacMillan; Editing by Gary Hill)