Bankruptcy

Final Nail Is In The Coffin At Tweeter - They Abruptly Close And Convert To Chapter 7

By Scott Riddle

Tweeter Home Entertainment, the parent of HiFi Buys (which had several locations in Atlanta), first filed a Chapter 11 petition in June 2007 (click here).  It was bought by an investment firm and operated as Tweeter Opco, LLC, but that entity filed another Chapter 11 in November 2008 (click here).  This week, however, it abruptly closed all of its remaining stores and fired employees on Monday and sought conversion to Chapter 7 (see Reuters article here), wh ich was granted.

I purchased electronics from Stereo Sound in Chapel Hill (another chain purchased by Tweeter) while in college and law school at UNC, and HiFi Buys in Atlanta for several years, but over the years Best Buy, Amazon, H.H. Gregg, Brandsmart, etc., moved in to take the market share from specialty electronics retailers (and Circuit City). 

It appears possible that some stores may reopen for liquidation (see article here).  However, there are a few issues:

The conversion will free up cash, allowing Tweeter to continue liquidating its inventory and real estate, and will provide for a $900,000 fund from which employees are to be immediately paid accrued wages and commissions.

TWICE has received reports from Tweeter workers who were either told to return to work tomorrow or received inquiries about their availability. Whether the stores will reopen remains unclear, however, as the headquarters office has essentially ceased operations and Tweeter’s liquidators have filed an objection to the Chapter 7 conversion, demanding immediate payment of about $1.8 million for services rendered.  All parties reportedly were back in the United States Bankruptcy Court in Delaware this afternoon to hammer out an accord.

Full post as published by Georgia Bankruptcy Blog on December 04, 2008 (boomark / email).