Tower Records Files For Bankruptcy

The parent company of Tower Records filed for bankruptcy yesterday, one day after the music industry celebrated their achievements at the 46th Annual Grammy Awards.MTS Inc. filed Chapter 11 in what the company said was a final step in reorganizing under bankruptcy laws.Tower is the latest casualty in an industry wide recession that has claimed websites, chain stores and record labels.Tower launched in 1960 as a single store and soon expanded. The chain is credited with creating the "mega-store" concept and was recognized for its diverse musical selection.MTS has been trying to sell the 93 stores amid increasing competition from such discount chains as Wal-Mart, Best Buy, Circuit City and the Internet.Tower has lost money for 13 consecutive quarters and recently defaulted on a $5.2 million dollar debt payment.A spokesperson said the music chain would attempt to reorganize in two months, hoping to be more lucrative to a potential buyer.Billionaire supermarket tycoon Ron Burkle's investment firm Yacaipa Cos. was interested in purchasing the chain, but lost interest.Burkle, who also owns independent distributor Alliance Entertainment Corp, recently pumped $100 million into Sean "P. Diddy" Combs' Sean John clothing line.