[JPL] Tower Records To Be Liquidated

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Sat Oct 7 06:39:56 EDT 2006

October 06, 2006, 6:00 PM ET

Tower Records To Be Liquidated

By Ed Christman, N.Y.

Tower Records, the music industry's most famous retail brand, will be
liquidated beginning tomorrow (Oct. 7).

After a 30-hour auction, the process was won by the lead-bidder, Great
American, who put together a consortium of other suitors who were bidding on
different components of the retailer. The winning bid was $134.3 million.

³It's a sad day for the music business and I feel badly for all Tower
employees," says Jim Urie, president of Universal Music Group Distribution.
"Tower was probably the greatest brand that will ever exist in music

In court Michael Bloom, a partner with Philadelphia law firm Morgan, Lewis &
Bockius LLP, the law firm that represents the secured trade creditors
committee, questioned if the winning bid was the best one. Bloom pointed out
that one of Trans World's partners, Hilco Merchant Resources, LLC., upped
its bid by $500,000‹after the auction closed‹thus matching Great American's
bid. Bloom claimed the Trans World bid was more beneficial for the 2700
Tower employees and all the trade creditors.

But U.S. Bankruptcy Court Judge Brendan L. Shannon ruled in favor of the
Great American bid, noting it was important to vindicate the Chapter 11
auction process.

There is a chance the Tower Records brand could live on via Tower.com.
Norton LLC, part of the Great American consortium, put up $3.8 million to
acquire Tower.com and Pulse Magazine.

Out-of-business sales at Tower's stores will begin tomorrow.

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