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Updated Fri. Oct. 6 2006 6:10 PM ET
Associated Press
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<!-- /dateline -->WILMINGTON, Del. -- After a lengthy auction stretching over two days, a U.S. federal bankruptcy judge on Friday approved sale of California-based Tower Records to Great American Group, which plans to liquidate the music retailer.
After almost 30 hours of what lawyers described as "robust'' and "vigorous'' bidding, Great American won with a bid of US$134.3 million, beatingTrans World Entertainment, which had hoped to continue operating at least some Tower stores, by only $500,000.
Peter Gurfein, a lawyer representing Tower Records, said 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.
Tower Records, which has 89 stores in 20 states (it once had outlets in Canada) and owes creditors about $200 million, filed for Chapter 11 reorganization in August. In its filing, Tower 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.
Tower's Chapter 11 filing came two years after initial bankruptcy that resulted in bondholders forgiving millions of dollars in debt but taking an 85 per cent stake in the company, leaving founder Ruses Solomon and his family with 15 per cent.
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.
CTV.ca
Associated Press
<!-- dateline -->
<!-- /dateline -->WILMINGTON, Del. -- After a lengthy auction stretching over two days, a U.S. federal bankruptcy judge on Friday approved sale of California-based Tower Records to Great American Group, which plans to liquidate the music retailer.
After almost 30 hours of what lawyers described as "robust'' and "vigorous'' bidding, Great American won with a bid of US$134.3 million, beatingTrans World Entertainment, which had hoped to continue operating at least some Tower stores, by only $500,000.
Peter Gurfein, a lawyer representing Tower Records, said 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.
Tower Records, which has 89 stores in 20 states (it once had outlets in Canada) and owes creditors about $200 million, filed for Chapter 11 reorganization in August. In its filing, Tower 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.
Tower's Chapter 11 filing came two years after initial bankruptcy that resulted in bondholders forgiving millions of dollars in debt but taking an 85 per cent stake in the company, leaving founder Ruses Solomon and his family with 15 per cent.
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.
CTV.ca