Solomon, 80, is still a member of Tower's board of directors. His family gave up 85 percent ownership of the company to bondholders during its previous bankruptcy crisis, in 2004, but he retains a 15 percent share, according to the Bee.
Many of the private-equity firms listed as potential bidders often rescue struggling companies. Stuart Jamieson of Radius Equity Partners of Chicago, which is a potential bidder, told the Bee, "We are specialists in buying distressed companies. We like to come in, find out what's wrong ... and see if we can fix them. We believe there is a need for companies like Tower Records, (but) it can't be sitting there selling the same stuff they've been selling."
According to the Bee, other potential bidders include Dallas-based Highland Capital Management and HM Capital; Bayside Capital of Miami; Los Angeles-based Balmoral Advisors and Platinum Equity; and Chicago real estate developer Centrum Properties Inc.
Dow Jones Newswires reported earlier this week that Tower Records, which has 89 stores in 20 states, filed for Chapter 11 bankruptcy protection on August 20. According to the agency, the troubled company decided to put itself up for sale through a court-supervised auction scheduled for October 5. Tower wants to finalize the sale by mid-October to give itself enough time to prepare for the busy holiday season, which usually accounts for about one-third of its annual sales.
Tower's revenue fell to $430 million for the fiscal year ending July 31 from $476.1 million the previous year, according to Dow Jones.
Like other brick-and-mortar music and book stores, Tower has faced significant competition from online retailers as well as discount chains. Earlier this month, The Los Angeles Times reported that Universal Music Group, Warner Music Group and EMI Music had suspended CD shipments to the Sacramento-based chain after it stopped paying its bills. Sony BMG had also reportedly stopped shipments, although the paper was not able to confirm it at the time.
Tower recently appointed crisis management and bankruptcy specialist Joseph D'Amico as chief executive.
