Tower Records Bankrupt
Posted: Thu Oct 12, 2006 5:59 pm
WILMINGTON, Del. - After a lengthy auction stretching over two days, a federal bankruptcy judge on Friday approved the sale of California-based Tower Records to Great American Group, which plans to liquidate the music retailer.
After almost 30 hours of what attorneys described as "robust" and "vigorous" bidding, the company will be sold for an aggregate of $150 million, including the sale of various leases and properties.
Gurfein said Great American plans to begin the liquidation process and going out of business sales on Saturday, which eventually will result in the elimination of the jobs of some 3,000 Tower employees.
Tower Records, which has 89 stores in 20 states and owes creditors about $200 million, filed for Chapter 11 reorganization in August. In its filing, the company said it has been hurt by an industrywide decline in music sales, downloading of online music and competition from big-box stores such as Wal-Mart.
Solomon founded Tower in Sacramento, Calif., in 1960, starting by selling records out of his father's drug store and eventually opening the company's landmark store on Hollywood's Sunset Boulevard in 1969. As part of the bankruptcy auction, the Sunset property will be sold for $12 million.
"We can save this company or we can liquidate it," Bloom argued. "... Sometimes, the highest bid is not the best bid. In this case, your honor, we believe the best bid is the Trans World bid."
Trans World, which has about 1,100 mostly mall-based stores nationwide, has recently acquired other music retailers such as Sam Goody and Wherehouse Music, consolidating most of its acquisitions under the FYE name, which stands for For Your Entertainment.
Jay Indyke, an attorney for Great American, said Trans World and its bidding partners had discussed liquidating inventory and closing about two dozen Tower stores, and that they would not say how many stores they would continue to operate.
(side note....I just recieved a Tower gift card today that I plan to use online....let's hope the transaction is completed.)
After almost 30 hours of what attorneys described as "robust" and "vigorous" bidding, the company will be sold for an aggregate of $150 million, including the sale of various leases and properties.
Gurfein said Great American plans to begin the liquidation process and going out of business sales on Saturday, which eventually will result in the elimination of the jobs of some 3,000 Tower employees.
Tower Records, which has 89 stores in 20 states and owes creditors about $200 million, filed for Chapter 11 reorganization in August. In its filing, the company said it has been hurt by an industrywide decline in music sales, downloading of online music and competition from big-box stores such as Wal-Mart.
Solomon founded Tower in Sacramento, Calif., in 1960, starting by selling records out of his father's drug store and eventually opening the company's landmark store on Hollywood's Sunset Boulevard in 1969. As part of the bankruptcy auction, the Sunset property will be sold for $12 million.
"We can save this company or we can liquidate it," Bloom argued. "... Sometimes, the highest bid is not the best bid. In this case, your honor, we believe the best bid is the Trans World bid."
Trans World, which has about 1,100 mostly mall-based stores nationwide, has recently acquired other music retailers such as Sam Goody and Wherehouse Music, consolidating most of its acquisitions under the FYE name, which stands for For Your Entertainment.
Jay Indyke, an attorney for Great American, said Trans World and its bidding partners had discussed liquidating inventory and closing about two dozen Tower stores, and that they would not say how many stores they would continue to operate.
(side note....I just recieved a Tower gift card today that I plan to use online....let's hope the transaction is completed.)