Music retailer shutters in liquidation deal
A judge’s decision has spelled out the end of Tower Records.
After a two-day auction, federal bankruptcy Judge Brendan Shannon gave the keys to Tower’s kingdom to liquidation outfit Great American Corp. for $134.3 million. Its bid topped by $500,000 the highest offer from Trans World, which had intended to keep some Tower stores operating.
Great American Group plans to liquidate the music retailer, which has 89 stores in 20 states and owes creditors about $200 million.
The Sunset Boulevard location, which opened in 1969, will be sold for $12 million.
Peter Gurfein, an attorney representing Tower Records, told the Associated Press that the company will be sold for an aggregate of $150 million, including the sale of various leases and properties. Great American plans to begin going-out-of-business sales quickly; all 3,000 Tower employees will lose their jobs.
Michael Bloom, an attorney repping Tower’s secured trade creditors, urged Shannon to consider the closeness of the bids and the effect that liquidation would have before deciding whether to approve the sale.
“We can save this company or we can liquidate it,” Bloom said. “Sometimes, the highest bid is not the best bid. In this case, your honor, we believe the best bid is the Trans World bid.”
(Associated Press contributed to this report.)