UPDATE: Tower Bankruptcy Plan Approved16 Mar, 2004 By: Erik Gruenwedel
As expected, a Delaware bankruptcy court Monday accepted Tower Records & Video's Chapter 11 financial reorganization plan, which, barring any last-minute disagreements over existing contracts and leases, will go into effect within 10 days.
West Sacramento, Calif.-based Tower Feb. 10 filed a pre-packaged financial reorganization plan in U.S. Bankruptcy Court in Wilmington under which $110 million in senior debt was converted to 85 percent equity ownership in the company in addition to $30 million in new senior notes.
As a result, a consortium of banks and investment groups with founder Russ Solomon and family members retaining 15 percent ownership now controls Tower.
The 40-year-old music retail icon with 93 stores continues to be on the sales block with reported suitors, including Musicland owner Sun Capital Partners, in addition to California and Texas-based interests.
A Tower spokesperson was unavailable for comment.