Tweeter shuts stores, seeks to liquidate
By Emily Chasan
NEW YORK, Dec 3 (Reuters) - Bankrupt U.S. electronics retailer Tweeter abruptly closed all of its stores this week and asked a bankruptcy judge to convert its Chapter 11 case to a Chapter 7 liquidation, just days before the chain's going-out-of business sales were to conclude.
Tweeter, which had about 94 U.S. stores, filed for bankruptcy protection on Nov. 5 and began going-out-of-business sales at all of its locations shortly thereafter.
On Tuesday, it filed a motion in U.S. Bankruptcy Court for the District of Delaware, saying it could not obtain the funds from a lender to keep running the store-closing sales.
In court documents, the company said it had closed all its stores and fired its employees, beginning on Monday.
The liquidators retained to help run Tweeter's store closings said in court documents that they were told on Monday that the company was ending its store-closing sales and that Tweeter did not open any locations on Tuesday.
The liquidators, SB Capital Group, Tiger Capital Group and Hudson Capital Partners, said they estimate roughly $15 million of inventory, furniture and fixtures are in the locked stores.
The chain employed about 1,150 workers when it filed for bankruptcy in November, and as is typical with going-out-of-business sales, many had been promised bonuses and other compensation to stay with the company through its store closings.
On Wednesday, some employees hacked Tweeter's corporate website, saying the company's managers had delivered false promises and lied to employees.
The case had been the second Chapter 11 filing for Tweeter in two years. Tweeter Home Entertainment Group Inc, a former publicly traded company, filed for bankruptcy protection in June 2007, and was later bought out by Schultze Asset Management . The Schultze-run stores had filed the new Chapter 11 case in November.
The liquidators filed an objection to Tweeter's request to convert to a Chapter 7 case, saying if the case were converted, they should be paid immediately. A court hearing on the matter was scheduled for Wednesday. (Reporting by Emily Chasan, editing by Gerald E. McCormick)
