Advanced Marketing Services Inc., a San Diego-based distributor of books to warehouse stores such as Costco, filed for Chapter 11 bankruptcy protection Dec. 29.

The company said it had explored a number of strategic alternatives “to strengthen the company’s financial base and resolve past legal and regulatory issues.”

Despite some progress, the company failed to secure new financing and its primary lender declined to extend its current loan arrangement, AMS said in a press statement.

“This move will permit AMS, with its investment banker, to continue to pursue strategic alternatives,” said Chief Executive Officer Gary Rautenstrauch. “Additionally, Chapter 11 protection will enable the company to continue to conduct business in the normal course, make payments to vendors going forward and continue delivering quality service and products to customers.”

AMS has been in turmoil for the past three years since federal investigators raided the company’s headquarters in Sorrento Mesa. The investigation uncovered fraudulent accounting activities, and led to felony guilty pleadings by three senior executives.

In May, the company hired Rautenstrauch, a veteran of the book publishing industry, who is the third CEO since longtime former CEO Michael Nicita resigned in 2004.

AMS has also been in the middle of restating its financial results for the past five fiscal years. In a March statement, the company said for the current fiscal year that ends March 31, it anticipated a net loss of about $19 million on revenue between $915 million to $920 million.

AMS has some 1,400 employees, primarily at three distribution centers in Baltimore, Indianapolis and Sacramento. At its headquarters, it has 264 employees.

Stock of AMS, which now trades on the Pink Sheets under the ticker MKTS.PK, plummeted more than 68 percent on news of the bankruptcy to a record low of 81 cents before the close of the day Dec. 29. Its range in the past 52 weeks has been $2.35 to $4.70.

— Mike Allen