Tower.com Purchased by Caiman

Classic Arts News   Tower.com Purchased by Caiman
 
A bankruptcy judge has approved the sale of the Tower Records website business to an affiliate of Internet retailer Caiman Inc. for approximately $4.2 million, reports the Associated Press.

Caiman outbid Amazon.com and four other companies at the auction on Friday (March 16) for Tower.com and for the Tower Records trademark.

Caiman, which The Sacramento Bee calls "a little-known e-commerce merchant," sells music, books and DVDs on its own site and is also a major reseller on Amazon.com. As part of the deal, Caiman reportedly agreed to shoulder some of the defunct company's existing liabilities.

Tower Records, with stores in 20 states, filed for Chapter 11 bankruptcy protection in August; in October, Great American Group purchased most of Tower's assets and immediately liquidated the company. This is the second attempt at a sale of Tower.com: Norton LLC had agreed to buy the web business in October for about $3.8 million but couldn't seal the deal.

At a separate auction today at the retailer's West Sacramento headquarters, Tower sold off its office and warehouse equipment, plus $500,000 worth of leftover merchandise, according to the Bee.

By purchasing the trademark, Caiman could theoretically open new retail stores under the Tower Records name. Caiman also has the right to collect royalties from Tower's 142 franchise stores in Mexico, Israel and other countries.

The company's main operating subsidiary, Caiman Distribution, is based in Montreal and has distribution offices in Miami; it distributes music in the United States and Latin America. The holding company's legal headquarters is in the British Virgin Islands.

According to the Bee, Caiman Distribution filed for Chapter 11 bankruptcy protection in 2002 in Miami, blaming a water main burst in that city which put it out of business for months, as well as an expensive copyright disagreement.


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