MTS Inc. (West Sacramento, Calif.), owner and operator of the 93-store Tower Record chain, has filed a pre- packaged plan of reorganization and voluntary petitions for reorganization under Chapter 11 of the Bankruptcy Code.
The company said all Tower stores will remain open and that neither its employees nor its customers would notice any difference in operations as a result of the filing.
“Court approval of the pre-packaged plan will reduce existing debt by $80 million, effectively eliminating the financial risks that have faced Tower for the past three years,” said Tower ceo E. Allen Rodriguez. “Our issues are financial, not operational. We have already received the votes necessary to confirm the plan from our only impaired classes, the bondholders and shareholders, and we expect the pre-packaged reorganization to be concluded quickly.”
To achieve plan confirmation while operating in Chapter 11, Rodriguez said, the plan must be accepted by holders of at least two-thirds in dollar amount and more than half in number of claims. The bond restructuring plan has already been accepted by holders of more than 97 percent of total amount of its subordinated bonds and 100 percent of its shareholders. The company said it expects to achieve plan confirmation and successfully complete the reorganization within 45-60 days.