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.

“It'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 retail.”

In court Michael Bloom, a partner with Philadelphia law firm Morgan, Lewis & Bockius LLP, the law firm that represents the secured trace 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 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.

Triple up on your mortgages B.C., activate your extra credit cards, 'cause I know you're goin' buck-wild tomorrow. It's a shame.

JF, they already got dudes holding the 30% off signs on the corner. I heard that Transworld had it all wrapped up..Then the liquidators came up with a higher bid in the 12th hour. Tower needed 150 million just to pay off their vendors.

Damn

yo bc what up nigga? think you can cop a nigga a discount cd or what?

I just did a fierce attack on a Tower Records store. Grabbed a lot of shit and still only paid $70. Will hit the same store again in a week or so and grab EVERYTHING!