Tower Buy Troubled12 Oct, 2006 By: Erik Gruenwedel
There was a final hiccup in the Tower Records and Video purchase. The purchase of license rights to Tower.com by Norton LLC, which was part of the Great American Group's winning $134.3 million bid for bankrupt Tower Records & Video, was put in doubt Oct. 11 when Norton filed a court motion seeking to halt the $3.8 million transaction.
Exclusion of the Web site purchase, which included Tower's retail magazine and record label, would appear to undermine the Great American Group bid, which was just $500,000 more than a competing bid from Trans World Entertainment.
Tower, in response, filed an “emergency” motion to force San Francisco-based Norton, whose businesses reportedly include a syndicated rock radio show, sales of concert recordings and related memorabilia, to close the transaction in addition to reimbursing Tower for related legal and IT fees from maintaining the site's operations since the original Oct. 9 close date.
Norton said it requested a 30-day delay so registered Tower.com users could be notified that their personal information would be transferred to a new parent company.
Tower maintained that Norton was aware of the user-notification requirement prior to bidding and simply had “a change of heart.”
“It is very likely that had it not been for the [Norton bid], the outcome of the auction, at least as it related to the bidding between Great American and [Trans World], could have been very different,” said Tower in the filing.
A Norton lawyer reportedly said the problem was resolved.