Bids for Bankrupt Tweeter Due July 105 Jul, 2007 By: Erik Gruenwedel
Bankrupt Tweeter Home Entertainment Group is slated to select a third-party suitor following a July 10 bid deadline for a planned auction of its assets and liabilities.
The sale is scheduled to be completed July 13.
The Canton, Mass.-based high-end consumer-electronics retailer last month filed for financial reorganization under Chapter 11 of the U.S. Bankruptcy Code. The chain had reported $1.9 million in available cash with liabilities exceeding $95 million. It had just $12 million in available cash from a previous revolving $75 million credit facility.
Separately, Schultze Asset Management LLC, a New York-based investment firm, and Whippoorwill Associates Inc. and Bay Harbour Management L.C. together have made bids for select Tweeter assets, according to filings with the U.S. Bankruptcy Court in Wilmington, Del.
Schultze has offered $38 million for Tweeter assets, including $8 million in outstanding lease (cure amount) agreements. The company would also extend Tweeter a $10 million line of credit.
Tweeter is currently operating on a $60 million debtor-in-possession credit facility from General Electric Capital Corp.
Whippoorwill and Bay Harbour are offering $10 million for ownership of Tweeter's 18% stake in Boston-based Tivoli Audio LLC, according to the filing.
“We are pleased to complete these important steps in our restructuring process as we move forward,” Joe McGuire, Tweeter president and CEO, said in a statement. “Our objective is to bring cash into the company as quickly and responsibly as possible.”
A law firm representing Tweeter's debtors July 3 filed a motion with the court requesting a determination for outstanding store leases the retail chain intends to continue operating. The debtors said they expect to file a separate request with the court seeking “assumption and assignment” of all designated leases by July 13.
A Tweeter spokesperson declined further comment.
The company operates 130 stores under the Tweeter, HiFi Buys, Sound Advice and Showcase Home Entertainment brands primarily in New England, the Mid-Atlantic, Chicago, the Southeast (including Florida), Texas, Phoenix and Las Vegas.