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"Bankrupt electronics chain Tweeter yesterday converted its case to a Chapter 7 liquidation, abruptly shuttered its stores, and fired more than 600 employees at 70 stores across the country, days before the company was set to close for good."
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, according to five store 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 and filed for Chapter 7 after they paid off millions of dollars to the largest secured creditor - Wells Fargo. Schultze Asset Management, a New York investment firm that 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 bought Tweeter out of its first bankruptcy in July 2007 for $38 million, did not return calls seeking comment."
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