Tweeter Weighing Sale to Private Investors As Reorganization Option
Tweeter is weighing sale of the chain to private investors among options for reorganizing the bankrupt retailer, company officials said. Purchase of Tweeter could occur within 8 weeks as the chain weighs “any and all” restructuring strategies, including refinancing, an equity investment or sale, CFO Gregory Hunt said in a filing with the U.S. Bankruptcy Court, Wilmington, Del.
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To speed reorganization, Tweeter hired FTI Consulting as its financial adviser and Peter Solomon Co. as its investment banker, the retailer said in a court filing. Tweeter has had feelers from potential hedge-fund buyers, CEO Joseph McGuire said in a conference call. Tweeter filed Mon. for bankruptcy protection, listing $190 million-plus in debt. It has secured $60 million in debtor-in-possession financing from GE Capital, which previously provided its revolving credit facility.
Polk Audio led Tweeter’s list of unsecured creditors with a $1.2 million claim. Other creditors: Audioquest, $536,981; Bose, $472,410; Omnimount, $388,244; Universal Remote Control, $333,513; DirecTV, $326,524; JL Audio, $301,459; Martin Logan, $276,106; Pioneer, $264,742; Garmin International, $211,303; TiVo, $155,565. Other big creditors include software supplier SAP, $745,573; and Zurich American Insurance, $743,294.
Tweeter wants U.S. Bankruptcy Court Judge Peter Walsh to let it reject leases at 28 locations. They include stores in Mission Viejo, Cal., Frisco, Tex., Huntsville, Ala., North Haven, Conn., Franklin, Tenn., and Knoxville. In March the company said it planned to close 49 stores, shrinking the chain to 103 outlets. Tweeter was to have closed 16 of those outlets by early June. Operating under bankruptcy, Tweeter hopes to speed lease negotiations with landlords as it seeks to shut unprofitable locations.
Tweeter has struggled since being burned badly in the fireball as flat-panel TV prices plunged last holiday. Weeks before declaring bankruptcy, Tweeter admitted that virtually all its vendors had relegated it to cash-on-delivery terms. Tweeter seeks court approval to pay $225,000 to “critical” vendors, those deemed core to its reorganization plans, the chain said. It’s also seeking to return “unusable” goods it received before the bankruptcy filing, it said.