Sources say in court that upwards of 60 retail chains were contacted, but at the end of the day the only potential retail bidder turned out to be Bull Moose, the 12-unit, New England-based chain.
At press time Billboard was unable to reach Bull Moose executives for comment, so the details of the bid are unclear, but according to sources the company requested another week to come up with its financing. Sources say, the bankruptcy court was willing to grant the extension if Bull Moose was willing to put down an nonrefundable deposit; whatever amount the court was asking apparently turned out to be unpalatable for the chain.
Hastings Entertainment was founded in 1972 by Sam Marmaduke, the man who years earlier first convinced Walmart to carry music. As Western Merchandisers, the Marmaduke family supplied Walmart with music until 1994.
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After selling Western Merchandiser to Walmart (which in turn sold it to Anderson News) Marmaduke's son, John, ran Hastings Entertainment right until April 2014 when his publicly-traded chain was sold to Draw Another Circle, a company owned by Joel Weinshanker, who also owns National Entertainment Collectibles Association (NECA).
Draw Another Circle also acquired MovieStop and SP Images and supposedly those assets are the reasons why all three had to file Chapter 11.
According to sources, the Hastings chain has about $140 million in inventory, about $70 million is owed to secured creditors, which according to press reports are Bank of America and Pathlight Capital. Another $50 million is owed to unsecured creditors including most of the major movie studios because of DVD product and many of the big music suppliers, including the three majors and Alliance Entertainment.
With the bid from the liquidators put at about $95 million by one source, that would leave about $25 million to be split among the other unsecured creditors, which would be a return of 50 cents on the dollar, before the chain’s legal and consultant fees are considered.
"Its a sad day for the music industry," Newbury Comics CEO Mike Dreese told Billboard. The chain supposedly has 2,000 employees who will soon be seeking jobs. As to when the stores will be shuttered, a company spokeswoman for outside consulting firm FTI, declined to disclose those dates. The spokeswoman e-mailed a statement that said, "On Friday July 22, the bankruptcy court is expected to approve our agreement with the companies who oversee our store closing sales" -- Hilco and Gordon Brothers.