Schultze Wins Bid For Tweeter

By Alan Wolf -- TWICE, 7/13/2007

Purchase, N.Y. – Schultze Asset Management, an investment firm specializing in distressed situations, placed the winning $38 million cash bid to acquire all of the assets of Tweeter Home Entertainment Group.

Tweeter is seeking court approval for the transaction this morning at the U.S. Bankruptcy Court in Wilmington, Del. If approved, the sale of the specialty A/V will likely close later today.

Tweeter said it will continue normal operations pending completion of the acquisition.

“Both Tweeter and Schultze are very excited about this pending acquisition and are committed to emerging from this restructuring process as a stronger, more competitive organization focused on delivering an outstanding service experience to our customers,” said Tweeter president/CEO Joe McGuire. “The conclusion of this auction represents a very positive outcome for our employees, customers and business partners. We look forward to completing the sale transaction.”
Tweeter said that Schultze's "going concern" bid was determined to be the highest or otherwise best offer in the Bankruptcy Court-supervised sale of its assets. The retailer reported last month that Schultze would also assume $8 million of Tweeter's “cure costs” associated with the company’s bankruptcy proceeding, as well as provide the chain with a $10 million junior debtor-in-possession line of credit. Tweeter intends to use the $10 million in new funding to purchase merchandise and for other general corporate purposes.
Schultze’s bid included the purchase of Tweeter’s 18.75 percent interest in Tivoli Audio.Founded in 1998, Purchase, N.Y.-based Schultze Asset Management is an alternative investments firm specializing in distressed and special situations investing. The firm manages approximately $725 million in assets on behalf of institutional and high net worth clients located throughout the world.

Other confirmed bidders included Whippoorwill Associates and Bay Harbour Management, which had teamed up to make a $10 million offer for Tweeter’s Tivoli holdings.