Musicland requests court OK of bidding procedures for $104 million asset sale

By Caroline Salls

Pittsburgh, Feb. 21 - Musicland Holding Corp. requested court approval of the bidding procedures for the proposed $104 million sale of substantially all of its assets to stalking horse bidder Trans World Entertainment Corp., according to a Monday filing with the U.S. Bankruptcy Court for the Southern District of New York.

According to the motion, Trans World Entertainment has partnered with a joint venture comprised of Hilco Merchant Resources LLP and Gordon Brothers Retail Partners, LLC for an arrangement by which Hilco and Gordon Bros. will conduct inventory liquidation sales at some of the company's stores.

If Trans World Entertainment is not the high bidder, Musicland will pay it a $3.12 million break-up fee and will reimburse up to $500,000 of TWEC's expenses.

All bids must include a deposit of $10 million or 10% of the purchase price.

The auction will begin with the highest bid received, to be announced at the auction, and will continue in increments of $1 million.

The auction for the company's assets will be held March 21.

Musicland, a Minnetonka, Minn., specialty retailer of prerecorded entertainment software products, filed for bankruptcy on Jan. 12. Its Chapter 11 case number is 06-10064.

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