Tweeter Declares Chapter 11 Bankruptcy
Tweeter Home Entertainment Group, the struggling specialty A/V retailer that last month hinted that its severe cash shortage may lead to a bankruptcy filing, today indeed filed voluntary petitions for reorganization under Chapter 11 of the U.S. Bankruptcy Code. Tweeter, which expects to continue operating “business as usual,” said it made the decision in order “to address its financial challenges and support its ongoing efforts to evolve its home installation and services business model.”
In a press release, Tweeter said it “has taken this action after determining that a Chapter 11 reorganization is in the best long-term interest of the Company, its employees, customers, creditors, business partners and other stakeholders.”
Tweeter said it has secured a $60 million secured debtor-in-possession (DIP) credit facility provided by General Electric Capital Corp, to which it has petitioned to seek immediate authority to access in order to purchase merchandise, pay salaries and benefits and for “other general corporate purposes.”
Tweeter said its stores will remain “open for business as usual,” and that it will continue to honor returns, exchanges, credits and layaway programs at each store.
“After considering a wide range of alternatives, it became clear that this course of action was a necessary and responsible step toward preserving Tweeter’s viability as we address our financial challenges and work to secure our future,” said Tweeter President and CEO Joe McGuire. “I am confident that, with our tremendous talent pool of the best-trained, most knowledgeable sales and installation teams in the business, we will emerge from this process as a stronger, more competitive organization that is well-positioned to respond to and succeed in the ever-changing consumer electronics industry.”