Search CE Pro






Print  |  Email  |  Share  |  News  |  Follow on Twitter, Facebook, Google+ or RSS

Tweeter Stores to Remain Closed, Warehouse Sale to Come

Company has 15 days to remove all products and property from all stores.


image

It appears that Tweeter stores will not reopen for liquidation. Instead, all products will be sold in a warehouse sale.

It appears that Tweeter stores will not reopen after all.

Tweeter, which was granted Chapter 11 bankruptcy in 2007 and sold to liquidators, abruptly closed all its stores on Dec. 2 because it was unable to access operating funds from its lender. This happened before liquidation was complete.

Tweeter owner Schultze Asset Management, then petitioned the U.S. Bankruptcy Court for the District of Delaware in Wilmington for its status to be converted to Chapter 7 bankruptcy, for lender Wells Fargo to open up access to operating funds and for it to be allowed to reopen stores.

Chapter 7 was granted and George L. Miller was appointed trustee.

According to a Dec. 15 filing by the court, however, the reopening of stores won’t happen. The “expenses expected” and the “logistical difficulties in reopening the retail stores and recalling employees to work at a going out of business sale have been daunting,” it wrote.

The court adds that trustee George Miller is to vacate as many locations as possible by Dec. 31.

This presumably means emptying out all remaining unsold products from stores and all other property from corporate headquarters in Canton, Mass. and collecting all company vehicles — all to be done within 15 days.

The trustee has determined, according to the filing, that it should hand over all assets of the company to liquidator Apto Solutions of Atlanta. Everything — equipment, inventory, fixtures — will be sold in a warehouse sale.

From the court filing:

Schultze [Asset Management, which owned Tweeter leading up the bankruptcy] has agreed to agreed to a carve out from the proceeds of the Warehouse Sale from the Trustee’s compensation, compensation for Trustee’s counsel and distribution to general unsecured creditors of the Debtors.

Apto will collect all the property and conduct the sale at its warehouse over “a period of months,” according to the filing.

It’s unclear whether Apto will conduct a physical warehouse sale, sell the products through its Web site or a combination of both.

It appears that Apto will keep 30 percent of the warehouse sale proceeds and Schultze Asset Management will get 70 percent. From the filing:

Seventy percent of the net sale proceeds from the auction sale [after Apto’s expense deductions] … shall be available after Apto’s commission is deducted. From this 70 percent will be deducted a fee for the Trustee’s compensation and his counsel’s fees. The remaining funds are to be split between Scultze and the Debtor’s bankruptcy estates 87.5% and 12.5% respectively.

Several Tweeter employees told CE Pro they been contacted about their availability for returning to work at the stores. That will not happen.

A small sample of employees tells CE Pro that they have received the “regular pay” that was owed to them. This was apparently freed up after Schultze petitioned the court to free up funds from the lender.

However, those employees tell CE Pro that they have not received accrued bonuses or vacation time payments.




Subscribe to the CE Pro Newsletter

Article Topics

News · Big-Box Retailers · Big-box Retailers · All topics

About the Author

Tom LeBlanc, Senior Writer/Technology Editor, CE Pro
Tom has been covering consumer electronics for six years. Before that, he wrote for the sports department of the Boston Herald. Migrating to magazines, he was a staff editor for a golf publication and an outdoor sports publication. Now, as senior writer/technology editor of CE Pro magazine since 2003, he dabbles in all departments and offers expertise in marketing. Follow him on Twitter @leblanctom.

27 Comments (displayed in order by date/time)

Posted by Joe P  on  12/16  at  09:31 AM

As a customer who had 2,500 of deposit money taken from them in this bankruptcy, why is anyone making a profit before I get my money back?????  Confused…


“Seventy percent of the net sale proceeds from the auction sale [after Apto’s expense deductions] … shall be available after Apto’s commission is deducted. From this 70 percent will be deducted a fee for the Trustee’s compensation and his counsel’s fees. The remaining funds are to be split between Scultze and the Debtor’s bankruptcy estates 87.5% and 12.5% respectively.”

Posted by Techguy  on  12/16  at  10:53 AM

You may want to read this:
http://somd.com/news/headlines/2008/8781.shtml
I sure hope you made the deposit with a credit card!
Good Luck!

Posted by Jason  on  12/16  at  11:13 AM

As a former employee of Sound Advice, please allow me to clarify something. We were NOT paid salaries/vacation due/or any corrective pay promised to us by upper management. Tweeter has been making mistakes in payroll since this all began in the beginning of November. We were allways promised that it would be taken care of in our next check. They pushed that line all the way to the end when I was on my way to work and received a call to turn around because I no longer had a job to go to. All managers were also promised a “stay on” bonus that would be paid at the time of closing which was supposed to be 12/7. We were never paid that either. I do hope however that Mr. Shultz, Apco and the court appointed trusted and counsel spend there dividends well and have a very merry Christmas as my wife and I continue to wonder how we are going to pay our mortgage payment right before Christmas.

God Bless,
Former Loyal Employee

Posted by Joe P  on  12/16  at  11:58 AM

Techguy…thanks for your reply. That news about the deposits with the link you sent is practically ancient history about now.  I was stupid enough to pay cash for the deposit (I wrote a check).  The frustrating thing is that I wrote the check long before the bankruptcy, but the installation was scheduled for 11/11 which was after the bk was filed.  However, I was promised a refund check would come to me on 10/31, and of course, the computers were seized, and no check could be issued, or was ever intended to be issued. 
I have gone as far as meeting with the trustee of the bankruptcy George Miller today.  He is not a pleasant person to meet with.  He as much as told me to take a hike and to get in line with the rest of the creditors.  Maybe now its time to go after Wells Fargo..it seems as if they got paid by Schultze.  Because they got paid by him, and because my deposit money was taken, and I got no merchandise, arent they technically double dipping me?  Any way you look at it, its unjust that the little guy (employees and customers) have no voice in this matter).

Posted by Joe P  on  12/16  at  01:28 PM

I am confused about this…does this mean that the people who have outstanding deposits and merchandise due to them that never got it are going to get paid if they sell enough of the leftover merchandise??  Too much legal speak here….it sounds like the trustee gets paid, but after that I have no idea what “general unsecured creditors of the Debtors” means….is that me?


From the court filing:


Schultze [Asset Management, which owned Tweeter leading up the bankruptcy] has agreed to agreed to a carve out from the proceeds of the Warehouse Sale from the Trustee’s compensation, compensation for Trustee’s counsel and distribution to general unsecured creditors of the Debtors.

Posted by motion  on  12/16  at  07:02 PM

Hey! this is the same story I posted to the Twice talkback 24 hours ago. where’s my credit?

Posted by motion  on  12/16  at  08:37 PM

CT. Attorney General Richard Blumenthal filed an objection in court today. He basically told Schultze and Miller that all customers’ monies in Tweeter’s possession before Chapter 11 and all assets sold to customers before Chapter 7 but are now locked up in the stores are not the debtors’ property, GIVE IT BACK! Does Martha Coakley and the other AG’s have the guts to follow Blumenthal’s lead?

Posted by rohit  on  12/16  at  09:05 PM

What Tweeter is doing is very similar of what happened with Voce Wireless in Feb this year.  Voce was a premium wireless company that dumped its service and their employees on 2nd February.  Their customers and employees went to the attorney general and FCC to file a class action against them.  One of the Voce’s customers started a website – http://www.voceclassaction.com - that kept a list of the people supporting the class action.
If any of you guys were affected with this (employees and customers), I would suggest logging a similar suit against Schultze (Asset Management) about this as soon as possible.  The employees need to speak up to a higher authority and make themselves heard, rather than waiting for the scraps after 30-70 split.
Best of luck.

Posted by motion  on  12/17  at  03:30 AM

I’m unclear why this article is referring to the 2007 bankruptcy and not the Nov. 2008 filing. It was previously reported that the moment Schultze paid off his debt to Wells Fargo he filed for Chapter 7 claiming Tweeter was suddenly out of cash and that he was unwilling to use his own money to pay for the final days of liquidation. this article is suggesting that when Chapter 7 was filed, Schultze went back to Wells Fargo and said now gimme some more money so I can finish the liquidation. does this make sense to anybody?

Posted by Joe P  on  12/17  at  07:57 AM

Good point on the article commenting on the wrong bankruptcy date….
Motion…have I mentioned that I actually met the trustee George Miller yesterday?? This guy is a real gem.  The impression he left me with was that he is a really bad guy who is mostly concerned with his bottom line.  If we are left with him to fight for our money, we are a lost cause. Hopefully the CT Attorney General can get something done on our behalf. My next step is to get a hold of the person who is handling my claim at the Attorney generals office in PA and see whats going on, and why they arent doing anything to help me.

Posted by motion  on  12/17  at  08:27 AM

I’ve been following your posts Joe. I’ll be posting another observation to the Twice forum later on that.

Posted by motion  on  12/17  at  07:10 PM

I feel the need to correct this article. On Dec. 2nd Tweeter didn’t shut down Tweeter, George Schultze did. He had just paid off Wells Fargo and was immediatley filing Chapter 7 to get out of paying anyone else. Employees on their way to work were told they were fired without pay, go home. Managers in the stores were told to lock the doors and get out, you will be arrested if found on the property. The liquidators didn’t even know. Those were the events of Dec. 2nd.

Posted by motion  on  12/17  at  07:37 PM

These liquidation sales are generally funded by the liquidation firms who are also paid up front. These firms were not and had to go to the courts to get their payment from Schultze. No one is buying this excuse that Tweeter just suddenly ran out of money after Schultze paid off the only debt that mattered to him. Schultze is not a CE guy, he is a Wall Street guy. Remember that.

Posted by Former Employee  on  12/19  at  12:35 AM

The fact that Schultze Assest Management is going to get 70% of the proceeds from the selling off of Tweeter’s remaining inventory and assests is insane.  What about the employees that were not paid the stay on monies and unused vacation time?  I bet that Schultze is not going to offer it from their cut of the deal.  Sure, the companies that are creditors to Tweeter will also lose out.  But, they will most likely have the benefit of writing it off, something that all the former Tweeter employees can’t.  This is what happens to good, hard working, trusting people when one of these assest management companies buys up a distressed company. They only care about one thing, the bottom line.  When you ask what is wrong with America today, this is a perfect example of it.  Sooner or later people are not going to take stuff like this anymore.  I hate to think what will happen then.

Posted by motion  on  12/19  at  06:37 AM

I heard from a coworker that a very angry customer actually broke into a Tweeter store to get his merchandise. The police showed up, the GSM showed up. The customer had his receipt so they said you know what, don’t press charges, let him go with his stuff. I wonder if Schultze is aware of the physical danger he’s in if one of these people come across him?

Page 1 of 2 comment pages  1 2 >
Post a comment
Commenting is not available in this weblog entry.

Sponsored Links

  About Us Customer Service Privacy Policy Contact Us Advertise With Us Dealer Services Subscribe Reprints ©2013 CE Pro
  EH Network: Electronic House CE Ideas Store Commercial Integrator ChannelPro ProSoundWeb Church Production Worship Facilities Electronic House Expo Worship Facilities Expo