Tweeter Shuts All Stores
May File For Chapter 7 Bankruptcy Protection
By Alan Wolf -- TWICE, 12/2/2008
Canton, Mass. — Tweeter terminated its corporate staff yesterday afternoon and shuttered all of its remaining stores this morning, days before a planned weekend shutdown.
The move is believed to be a precursor to a conversion from Chapter 11 bankruptcy protection to complete liquidation under Chapter 7.
Employees and liquidators were reportedly given no advance notice of the action, and the status of remaining inventory and undelivered customer orders remains unclear.
Tweeter’s chief restructuring officer Craig Boucher declined to comment on the closings, aside from advising TWICE to await a formal announcement. Calls to chairman George Schultze were not returned at post time.
However, attorney Joe Huston of Stevens & Lee, the proposed counsel to the official committee of unsecured creditors, said a motion was filed today and will be heard in the U.S. Bankruptcy Court in Delaware tomorrow.
Phone calls made to Tweeter locations around the country were not answered, although the chain-wide closures were confirmed by numerous employees, including Michael Simon, a general manager of a Sound Advice store in Fort Myers, Fla. Simon said all stores had been slated to close Dec. 7, but that he was instructed not to open this morning and to turn away his staff. The store still holds about $100,000 in inventory, and $50,000 in prior purchases remains unfulfilled, he said.
Promised bonuses and unused vacation time will not be paid, Simon and other staffers said.
Tweeter filed for Chapter 11 bankruptcy protection last month, citing “a severe liquidity crisis brought on by slow sales caused by declines in discretionary consumer spending.”
The 36-year-old chain, which was acquired last year by Schultze Asset Management after a previous bankruptcy filing, estimated its liabilities at between $50 million and $100 million.
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