The Orchard will buy TVT Records as the winning bidder in the Chapter 11 auction, held yesterday (June 19) in New York.

Although terms of the deal were not disclosed, sources say that the Orchard will pay $6.05 million, with the acquisition expected to close by July 3. The deal is subject to court approval, customary closing conditions and finalization of the purchase agreement between the parties.

TVT filed for Chapter 11 protection on Feb. 19 and the bankruptcy court moved quickly into the auction process. Sources say there were four qualified bidders. To win the auction, the Orchard offered $50,000 more than the $6 million required to cover the $1 million break-up fee for the stalking horse bidder D.B. Zwirn, which bid $5 million, sources say. Zwirn is the label's secured creditor.

Under the terms of its bid, the Orchard would assume control of TVT's catalogue of recorded masters, artist contracts and physical record distribution infrastructure, among other assets, but excluding its holdings in its music publishing subsidiary, according to a press release.

“Along with a great catalogue of chart-topping music, TVT has a formidable artist roster, with major hip-hop talents and a phenomenal pipeline of developing artists” the Orchard president/CEO Greg Scholl said in a statement.

“We look forward to working with these artists, and where it makes sense, in conjunction with other Orchard clients and partners, to support their artistic vision and maximize their commercial potential,” he continued.

TVT’s roster includes such artists as Pitbull, Lil Jon and the Polyphonic Spree.

TVT Records president Steve Gottlieb added in a statement, “After 23 years and 25 plus Gold and Platinum releases, I am delighted to see TVT's catalogue and roster move to a company so deeply engaged in developing the digital future of the music business.

"My energies will now focus on the continued growth of TVT Music as a premier music publisher, as well as following on with my consulting and co-investing with VC's in early stage Internet ventures,” Gottlieb continued.