After news began leaking out last week, there's now been official word that Chaos Comics has shut down and is filing Chapter VII bankruptcy. CEO Brian Pulido called at least one distributor on Friday with the news. That means that the company will be liquidated and its assets sold; the money will be used to satisfy its debts. The intellectual property rights of the company, including its characters Lady Death and Evil Ernie, will be among the assets liquidated.
The company had apparently been in financial difficulty for some time. Publicly available records indicate that in 2000, a federal tax lien for over $145,000 was filed against Chaos for unpaid taxes for 1998 and 1999.
While Chaos was successful during the 'bad girl' era, when goth was king, it was unable to adapt its product line when tastes changed. Lower orders on its new products apparently led it into a decline from which it was unable to recover.