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 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 began Oct. 7.
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