Musicland gets court OK of bidding procedures for Media Play lease sale

By Caroline Salls

Pittsburgh, Jan. 18 - Musicland Holding Corp. obtained court approval of the bidding procedures for the proposed sale of 61 Media Play, Inc. leases, according to a Tuesday filing with the U.S. Bankruptcy Court for the Southern District of New York.

The company said it plans to auction the leases and reject leases that are not sold.

If a stalking horse bidder is not the high bidder for any or all of the leases, Musicland must pay the stalking horse bidder a $10,000 break-up fee for each individual lease or 3% of the cash amount of the stalking horse bid.

Each bid must include a 15% deposit.

The auction is scheduled for Jan. 24, and the sale hearing will be held on Jan. 27.

In connection with the proposed sale, the company also obtained court approval to hold an auction to select a liquidating agent for store closing sales.

Musicland said it hopes to begin the store closing sales on Feb. 1.

The company plans to vacate the stores by Jan. 31.

Musicland, a Minnetonka, Minn., specialty retailer of pre-recorded entertainment software products, filed for bankruptcy on Jan. 12. Its Chapter 11 case number is 06-10064.

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