O.T.
Tower Records Sees 3 to 5 Final Bidders
Wednesday September 6,
Tower Records Expects 3 to 5 Bidders at Final Auction
WILMINGTON, Del. (AP) -- Tower Records expects three, four or five prospective buyers to make it to the final round of bidding at a two-stage bankruptcy auction, the attorney running the sale said Wednesday.
Peter Gurfein was in court in Delaware, where the music retailer filed for its second bankruptcy in recent years, seeking approval of rules for a planned Oct. 5 auction.
Sacramento, Calif.-based Tower Records expects to name a lead bidder for the second round by Sept. 13, at the conclusion of the first round of bid qualifications, Gurfein said.
If approved, the auction plan would establish a second phase of bidding on Sept. 26, kicked off by the designated lead bidder, or "stalking-horse," which will set the floor price.
Tower Records wants two days to look over the second-round bids before the auction itself, Gurfein said, because it wants to close the deal quickly.
Depending on how many potential bidders qualify in the opening rounds, Tower Records believes it will have "three, four, five" potential bidders at the final round, Gurfein said.
Tower Records wants to enter the auction with transaction papers prepared for each of the potential buyers, so it can get the sale closed by Oct. 9, the lawyer said.
The company's debts include about $79.5 million owed to CIT Group, top secured lender and bankruptcy financier. Also in the secured category are bills owed to big-name distributors such as Sony Corp.'s Sony Music Entertainment Inc., and Vivendi's Universal Music & Video Distribution.
The secured trade debt is from $74 million to $83 million, depending on whose tally is used, Tower Records' or its vendors'.
Then there are the landlords for 88 of the 89 stores, who could file claims in the bankruptcy for the remaining portions of their leases, unless the buyer takes over the leases and the payments.
Landlords will get an early look at the qualifying bidders, so they can raise and perhaps resolve any issues with their new prospective tenants without holding up the deal.
Tower Records' unsecured debt includes $36.5 million in notes and an estimated $15 million owed to regular vendors. |
