Tweeter shuts down, leaving workers without pay
The owners of bankrupt electronics chain Tweeter abruptly shuttered its stores today and fired more than 600 employees at 70 stores across the country days before the company was set to close for good, according to five Tweeter store managers and executives briefed on the situation.
The employees, including roughly 150 in Massachusetts, are still owed at least one week's pay, vacation time, and hundreds of thousands of dollars in bonuses that were promised as part of the liquidation sale, said the managers and executives who declined to be named because they are still owed money. Customers are unable to pick up merchandise they had already purchased and the liquidators handling the closing also have not been paid. Meanwhile, there is roughly $14 million worth of goods left in the locked stores.
The owners of the chain, Schultze Asset Management , shut down Tweeter after they paid off millions of dollars to the largest secured creditor -- Wells Fargo, according to the managers and executives. Schultze Asset Management, a New York investment firm which had also loaned money to Tweeter, was the second biggest creditor and decided against putting additional money into the company to cover expenses to wind down the operations. Tweeter had planned to close its shops on Sunday.
Schultze Asset Management, which had bought Tweeter out of its first bankruptcy in July 2007 for $38 million , did not return calls seeking comment.
Craig Boucher , who works for turnaround company CRG Partners and has served as chief restructuring officer for Tweeter since it filed for bankruptcy protection again last month, declined to comment except to say: "Things will take care of themselves in due time."
A spokeswoman for Hudson Capital Partners , one of the firms running Tweeter's going-out-of business sale, declined to discuss the matter. Tiger Capital Group, another liquidator, did not return calls seeking comment.
Kenneth Howell , who worked as a store manager for the Tweeter shop in Burlington, Mass., said he received a call this morning from an operations manager that he should not show up to work and if he entered the building, he would be responsible for any lost merchandise. Howell said he was told Schultze Asset Management was planning to file for Chapter 7 bankruptcy protection and no information was available regarding unemployment, insurance, and owed wages.
"The employees don't deserve this. It's bad enough to be liquidated," Howell said. "But to be shut out of the stores, without wages and everything else owed. And now customers can't get their merchandise. It's totally unfair and pretty sad."
Howell and other Tweeter employees interviewed said they are planning to file complaints with the Massachusetts Attorney General's office. Harry Pierre , a spokesman for the Attorney General's office, said: "We are aware of the situation and reviewing it."
Arthur Perkins , president of the Turnaround Management Association, which includes liquidators, bankruptcy attorneys, and turnaround executives, said it is unusual for retailers to shut down in the middle of a liquidation sale.
If Schultze Asset Management files for Chapter 7 bankruptcy protection, a trustee would come in and run the company, dispose of assets, and try to settle some of the claims from hundreds of unsecured creditors -- including customers and vendors -- who have to wait in line behind larger creditors.
(By Jenn Abelson, Globe staff)
So I guess this means the name goes back to Great Woods??
I went through this many years ago with Tech HiFi. They went bankrupt, and were liquidating all of the stock at all locations. I managed the store at MIT, and one morning when I arrived at the store to open up for the day, there were federal marshalls inside, demanding my keys and telling me the store would not be opening. I was allowed to grab any personal items inside, but that was the end. No pay. No notice. No nothing. I feel for these people. Worst possible time of year too. They must really be up against it if they just lock everybody out and close the doors.
I feel bad for the employees. The employees at the Tweeter stores here in Dallas had a similar experience. They did not loose their personal property in the stores like the employees did this time. They did loose their promised exit packages. They did not get the signed contract packages before the first bankruptcy was declared. Good Luck to all of you.
The Attorney Generals office needs to step in and insure that Schultze Asset Management provide goods to customers that have paid for them and also insure that wages are paid for hours worked to fired employees. The State Police should be detailed to the warehouses to insure merchandise is not removed. Criminal charges should be brought against Schutze and the Companies owners arrested.
This case need to be used to make an example so that this type of irresponsible behavior does not become commonplace during this recession.
"The owners of the chain, Schultze Asset Management , shut down Tweeter after they paid off millions of dollars no details to the largest secured creditor..."
What does "paid off millions of dollars no details" mean? And where was Tweeter's bailout? Is the check in the mail or something?
the salespeople watched their customers get hosed a couple of weeks ago when they couldnt return money or give them the merchendise then are surprised that they are left on the short end of the stick?
Also notice that they didnt sell much of the inventory because you can get better deals on Amazon
It is very discouraging hearing this news... I started going to Tweeter when they first started out in Harvard Square. They were one of the best Hi-Fi and stereo stores and most importantly the original owners were extremely knowledgeable, loved Hi-Fi and they were extremely helpful/friendly. It is just a shame that they have gone to this point after the original owners have left, I believe, long ago.
I will miss the "old" Tweeter, not the new or recent one.
I still love Hi_fi and home theater and willl look forward to doing business with the few small business owners that are left.
Tweeter - for times like these...
The Globe had a borderline hagiographic piece about the liquidator company overseeing the Tweeter bankruptcy. It truly glorified them. I wonder if we'll see an amendment to the story about this conduct (doubtful).
"he should not show up to work and if he entered the building, he would be responsible for any lost merchandise"
And why should Mr. Howell be held responsible? Sheesh, and after that nice profile the other day of that nice liquidation manager.
this storie read like a second grader rote it.
American business at its finest............
Is this what Reagan meant by Trickle Down Economics?
Thank you Republicans........
How about the executives? I hope they've been paid and that all their expense accounts are up-to-date.
These guys should go to jail if they can't pay their employees. People need to pay rent and buy food, you know.
They should have requested a bailout.
Congress probably has enough change in their pockets to keep Tweeter in business.
Remember their slogan from the 80s, "Tweeter, for times like these."
Bitterly fitting.
the state always protects major corporations - never the little people
if I just stopped paying my bills or stop paying my employees I'd be in jail
This is terrible news coming before Christmas. Not only for the employees and the customers, but for Massachusetts.
Off the DOR tax rolls, and onto Commonwealth Care state-sponsored luxury private health insurance.
Only the best.
I've always hated Tweeter, poor service and even poorer quality products. I'm not surprised this happened.
Did anyone proof this article before publishing, or was it the typical boston.com "rush to publish before the Herald" scenario, ignoring grammar, sentence structure, or readability?
That place always s*cked.
This move proves just how hard.
If I were a customer who got locked out of stuff they just purchased, I'd batter the front door down and loot the place.
MERRY CHRISTAMS TO TWEETER
I have to return an item to Tweeter, where do I go?
Very few people buy $1000+ stereo systems. With the economy down its even less. Bye bye Tweeter.
Same thing happened to me quite a few years ago. Never collected one red cent of what I was owed despite filing claims with dept of labor and whatever other agencies handled this type of thing. The smartest ones of all were my co-workers who took whatever wasn't nailed down on the way out the door. Fax machines, clocks, pictures off of the walls,office supplies ect.
Why would anybody by ANYTHING from a liquidation without a CREDIT CARD that has built in protection? I feel terrible for employees but the shoppers need a clue
Remember the names of the companys mentioned in this article. Remember them long after the dust has settled . Their lack of backbones and neglect for those that are now out of work ,speak volumes about their disregard for others. As for you Craig Boucher, thanks on behalf of all those that will enjoy the holiday for your "Things will take care of themselves in time" quote.
I'm sure that's very reassurring.
I'm not an expert in such matters, but is there a significant benefit to shutting down today versus this coming Sunday? It seems to me that whatever financial advantage could be accrued will evaporate in the form of lawsuits and other legal proceedings born from this 'premature' closing. The 'unintended consequences' of doing something that The Wizards of Smart said was a sensible thing to do.
What a horribly edited article this was. And of course, what a shame.
AG Martha Coakley gets a chance to show if she's for real or a political empty suit. Shultze's actions are indefensible.
Practicing and Preaching
If you were planning on stopping by a local Tweeter store this weekend to find one last bargain before the chain closed it doors on Sunday, don’t bother. Despite public announcements and rather gaudy in-store posters counting down the days to the December 7th closing, Tweeter’s owner decided to abruptly shut down everything this morning (Tuesday, December 2nd).
Store managers and employees who arrived to open the 60-some remaining stores (12 or so in PA, NJ and Delaware) were informed of the surprising announcement by phone or email. They were told they had 15 minutes to gather personal belongs and vacate the premises. Some, I’m told, did so under the supervision of local police.
Others, like me, received phone calls and simply told not to come to work. We were fired.
Reportedly – but I can’t confirm it – Schultze Asset Management, the owners of Tweeter, filed Chapter 7 Bankruptcy this morning. (The company filed for Chapter 11 in early November at the beginning of its liquidation effort.) The potential repercussions, I’m told, are no final paychecks for employees, no severance, vacation pay or promised bonus for those who agreed to stay until the stores closed.
There is an irony in this situation, and I use that word euphemistically.
Tweeter and its local predecessor, Bryn Mawr Stereo, built its once-strong reputation on exceptional customer service, encouraging and training its sales people to build strong and trusting relationships with customers – and to go the extra mile. Those of us who did – and there are many I work(ed) with who are far better at it than me – learned the benefit of working that way. It paid off, both monetarily (in what we earned), and it ‘paid’ bonuses professionally/personally in the long-term relationships and even friendships developed with customers. For some of my longer-tenured colleagues, those relationships have lasted a decade or more.
The ‘irony’ is that as we asked for and earned the trust and confidence of our customers, we also gave it willingly to our employer. When we were told that changes in policy, structure or operations were for the long-term benefit of the company, we accepted the explanations. Sure, we questioned many of the actions, but the response was convincing – if now obviously insincere.
The perfect vision of hindsight now easily outlines the steps to lead to Tweeter’s demise – internal/management missteps, external influences of technology/product changes, diminishing profit margins and overall profitability, and those myriad things we lump together and call ‘the economy’. But the analysis of the rise and fall of Tweeter is a conversation for another day.
The question of the day, to me at least, is that of trust. What do we expect – what should we expect of our employers and management? At what point in the past weeks did they cross the line and betray our trust? Why did they mislead us, lie to us?
Or, do they owe us an answer to those questions that at all?
I can’t argue with the fundamental goal of a company to turn a profit. The bigger the better, right? Nor would I expect any company to do anything that would negatively affect its bottom line.
If a store doesn’t turn a profit – or meet even revenue expectations, of course, it is no longer of value to its owners and/or stockholders.
And, if a company is draining its resources and failing to provide a return on investment, then no one can reasonably deny the right of those who have staked it to cut their losses.
Let’s be honest. All of us were ultimately in this business for the money. We are (or were) sales people because it paid our bills – sometimes more. If it wasn’t financially rewarding, we wouldn’t be doing this! It is – or was – fun. And I am – or was – good at it!
Sure, I am upset to be suddenly unemployed (if only unemployed a few days earlier than I expected to be). And, yes, I have been trying to find my next ‘opportunity’ with all vigilance – an unsuccessful quest to date. And if there is no final paycheck (and all the other stuff like severance and bonus), it will have a dramatic, potentially, devastating impact on me and my family.
But what most upsets me today is that my character has been compromised. I was asked to support a management team, my bosses and my owners and they have betrayed me. In my relationship with my customers, they made me a liar.
Call me naďve. Toss in a touch of unrealistic Pollyana-ism. I’m guilty.
Shame on me.
I know my situation and that of my colleagues is not unique. “It happens,” as one friend told me, “it happens almost every day.”
But today it happened to me.
And it really hurts.
And, oh yeah, I need a job.
John
Bucks County, PA
JohnHDTV@aol.com
Jenn, exactly how much is "millions of dollars no details"? lol
That is so despicable to screw the workers and customers. Let me guess ... upper management is doing just fine and made sure they got all their money lined up before the lock up. Sickos. It's truely criminal. I hope the government does something about this for god's sake. Why should the average Joe suffer for other people's mistakes? I really am losing respect for the U.S.
end of an era
mismanagement overspent starting with their Canton wharehouse.
hope everyone finds a job
I think your copy editor went home too early. Please edit and repost. Don't just be first. This story is very sloppy. It looks worse than being second to publish. Fix the third graf. Remove "no details" and fix the convention for Dec. 7. Also remove the extraneous spaces around the commas sprinkled throughout.
Dear Globe Finance Department:
My fee is $150. Please forward the check to my home address.
i worked for tweeter for more then 10 yrs and iam not shocked at all by the way this went down
"Things will take care of themselves in due time." What a sucky comment to make this time of the year! What a A_ _ _ _ _ _!
I never went into a Tweeter store without getting great service. They had knowledgeable, down to earth people who didn't treat you like a moron or pressure you to buy something you didn't want. It's a shame that soon we'll just be left with big box stores. And it's criminal to treat the employees this way.
This sentence does not make sense as written:
"shut down Tweeter after they paid off millions of dollars no details to the largest secured creditor"
Which union is to blame for this?
where can i buy a tv for a great price from these guys! this x-mas
season i am in buy mode!!
meanwhile somewhere in the Caribbean...sandy bloomberg's sippin boat drinks, and whistlin dixie!
I guess I won't be buying those speakers after all...so tragic.
There are several typos in this story - eds pls fix asap
Sounds to me like another owner management rip off. You should have tried to get a hold of the Schultze Asset Mgt. folks by dialing Carab. Islands, as they live the "Good Life".
Again, Another example of a big company getting away with stealing from employees and customers. If this was a small travel agency or another small buisness the AG would be all over this
From the Sunday Globe, "The "junkyard dog," as Schaye affectionately calls Spehar, is actually a nice guy. He's pleasant. He buys doughnuts for the employees. He talks to his wife four times a day. He may be presiding over the impending unemployment of everyone around him, but Spehar likes to call himself a people person."
I hope the 600 employees fired without pay three weeks before Christmas really enjoy the doughnuts the "nice guy" bought them last week. Some people person!
Epitaph: The music stops when the money runs out.
There is only 'one' way to deal with this. File a Complaint with the Securities and Exchange Commission which Schultze Asset Management reports to. The SEC will handle this , in the same manner as they handled Enron.
i live in florida, i have filed on behalf of everyone a class action suit for getting back money owed please return an e mail if you have paid for goods or services or have worked for the company and have not been paid
If we get together we have a chance
there is power in numbers.
fm3@bellsouth.net
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