Speculation continues to grow about the future of US music chain Tower Records, due to rumours that the chain will shortly file for Chapter 11 bankruptcy protection, the second time the company has had to do so in just over two years.
As previously reported, the future of the music chain dominated conversations at the recent annual convention of US music retail trade body NARM after the major record companies confirmed they were no longer supplying Tower with new music just as the conference opened - a decision reportedly reached after Tower bosses let the majors know they wouldn't be able to meet their August payments.
Analysts now say the future of the company, which has been up for sale since the start of the year, will depend on decisions made by their bankers, CIT Financial. It is hoped a 'Chapter 11 deal' will be reached which allows some kind of takeover or ownership restructure (as happened when the group last applied for Chapter 11 protection), but some fear the bank might now push for all out liquidation.
Billboard quote one financial executive as saying: "Deep down, the industry is pulling for Tower, but a lot depends on how patient the bank is. If they start sweeping the cash [from Tower stores' nightly deposit out of the company's account] and say 'liquidate,' then there is nothing we can do."