Tower Records: No Bankruptcy
The Sacramento, CA–based music retailer has also been rumored to be a candidate for bankruptcy, a possibility that could sink the small labels who depend on Tower's "deep catalog" operation.
Tower owners Louise and Russ Solomon have put such rumors to rest, at least temporarily, with a public statement that the music retailer has found a way to extend its financing for at least a year. "We have no present intention to file bankruptcy," Louise Solomon told reporters June 22. According to an Associated Press report, the company has been able to extend its revolving credit for a year, although at a level reduced "from $275 million to about $225 million." The company's available credit will continue to dwindle, dropping to $195 million in October and possibly going as low as $100 million by December, the report stated.
The figures were included in recent report made to the Securities and Exchange Commission, Ms. Solomon said, emphasizing that her company had made no mention of a bankruptcy filing. She made the statements at a press conference called two days after Moody's Investors Service downgraded Tower's debt ratings. Moody's predicted a bankruptcy filing for Tower if new sources of financing can't be found. Tower claims to be "actively seeking further external financing."