Tower Web site on block: Defunct music retailer moves closer to selling off its leftover assets
SACRAMENTO, Calif. - Tower Records is edging closer to selling its Web site and other leftover assets of the Tower empire.
Two months after its last U.S. stores closed, the defunct Sacramento-based retailer is preparing to auction off Tower.com, the company's famous trademark and its international rights. An earlier deal to sell the Web site fell through, Tower said in court papers.
Tower expects to auction the assets March 15 at its law firm in Wilmington, Del., according to papers filed late Wednesday in U.S. Bankruptcy Court in Wilmington.
"Numerous parties" have already indicated they will participate in the new auction, Tower said in court papers. The assets may be sold as a group or individually and proceeds will help re- pay Tower's remaining debts.
The most prominent asset, the Web site, has remained open for business even though Tower's Sacramento warehouse has closed. A wholesaler has been filling customer orders.
The international licenses cover the right to operate Tower outside the United States. Some 142 stores operate in seven foreign countries.
Someone purchasing the trademark, meanwhile, could open new stores under the Tower name.
After filing for bankruptcy in August, Tower was auctioned off to a liquidating firm in October, following a 30-hour marathon at the same Wilmington law firm. The liquidator, Great American Group, completed the going-out-of-business sales in late December.
As part of the auction, Tower.com was sold for $3.8 million to Norton LLC, an Internet business in San Francisco that sells memorabilia and concert recordings acquired from the estate of rock promoter Bill Graham.
The deal ran into problems almost immediately. Tower accused Norton of trying to back out or substantially change the terms. Norton said the hang-up was a legal restriction involving the transfer of the Web site's customer list - a restriction it says it didn't know about until after it agreed to the purchase.
The two sides tried to work out their differences but failed.
"Certain business, technical and operational issues became apparent in the course of these negotiations, and that transaction did not close," Tower said in its court papers.
Norton owner Bill Sagan wouldn't comment on the failed negotiations Thursday but said he might make another stab at the Web site at the March auction. "I'm still thinking about it," he said.
Separately, Sagan is being sued by such rock stars as Carlos Santana and Led Zeppelin's Robert Plant. They say his rock-memorabilia Web site is illegally profiting from their work. Sagan has called the suit "frivolous."