Two bids for Tweeter

Two bids have emerged for assets of Tweeter Home Entertainment Group Inc. that could be auctioned off in the high-end electronics retailer's Chapter 11 bankruptcy reorganization.

Schultze Asset Management made a $38 million bid to acquire "substantially all" of Tweeter's assets and assume $8 million in costs related to the bankruptcy, Canton-based Tweeter said Tuesday.

The bid from Purchase, N.Y.-based Schultze also includes a $10 million line of credit to help Tweeter buy merchandise and cover other expenses during the bankruptcy case Tweeter filed June 11 in bankruptcy court in Delaware.

Schultze, which specializes in investing in financially troubled companies, also is bidding for Tweeter's 18.75 percent ownership stake in Tivoli Audio, a consumer electronics manufacturer.

The second of the two bids disclosed Tuesday involves only Tweeter's stake in Tivoli. Whippoorwill Associates Inc. and Bay Harbour Management teamed up in a $10 million bid for the Tivoli stake.

A bankruptcy judge on Tuesday approved the pair of so-called "stalking horse" bids in the first phase of a process under which other qualified bidders will have the chance to submit higher offers before a July 10 auction.

"Our objective is to bring cash into the company as quickly and responsibly as possible, and today's events move us closer to that goal," Joe McGuire, Tweeter's president and chief executive, said in a news release.

Tweeter has said it expects to continue normal business operations during its Chapter 11 reorganization by keeping its 130 stores open. The 35-year-old company's stock was delisted from the Nasdaq Stock Market last week.

Tweeter has suffered recent losses, ordered store closures and agreed to back out of naming-rights deals at four outdoor concert sites amid a price war for flat-screen televisions. Bigger rivals such as Best Buy Co., Costco Wholesale Corp. and Wal-Mart Stores Inc. have been better able to absorb the price war's low profit margins.

Tweeter is the owner of stores under the Tweeter, hiFi buys, Sound Advice and Showcase Home Entertainment names in New England, the Mid-Atlantic, Southeast, Texas, Chicago, Southern California, Phoenix and Las Vegas. (AP)