Sam Ash Music: Century-Old Retailer Closes 42 Stores, Sells E-Commerce to Gonher

Sam Ash Music Corporation and affiliates filed chapter 11 on May 8, 2024 in the U.S. Bankruptcy Court for the District of New Jersey, a filing that followed an announced closure of all 42 retail stores and an accelerated liquidation timeline. The company described itself as a century-old American music retailer in coverage of the filing, and news reports framed the case as the end of a 100-year run for a national instrument chain. The filing was publicly disclosed when the company filed for bankruptcy protection, with broader industry coverage describing Sam Ash as a century-old music retailer and trade coverage reporting the chapter 11 filing.

Court filings show that the debtors operated a multi-channel business with 42 stores, an e-commerce platform, and a wholesale segment through Samson Technologies. The First Day Declaration describes the operating footprint, including distribution centers in Hicksville (New York), Tampa (Florida), Las Vegas (Nevada), and Indianapolis (Indiana), along with a concentration of stores in Florida, California, Texas, and New York. The filing also positioned the chapter 11 cases as a rapid sale and wind-down process funded by debtor-in-possession financing, with proceeds and collections directed to the DIP lender under a court-approved budget. The debtors sought to market their digital and wholesale assets while liquidating the retail store base. Those details appear in the First Day Declaration, the DIP Motion, and the Final DIP Order.

The restructuring path combined a short sale timeline with a liquidation plan. A court-approved bidding schedule culminated in a Sale Order that authorized an asset purchase agreement with Organizacion Gonher S.A. de C.V. (or a designee) for stated cash consideration of $15.2 million plus assumed liabilities and cure costs. The sale focused on the e-commerce operations, intellectual property, and the Samson Technologies wholesale business, and coverage reported that Gonher Music Center acquired those assets for $15.2 million. The sale approval is reflected in the Bidding Procedures Order and the Sale Order. The case later moved to a confirmed liquidating plan that created a liquidating trust and provided pro rata distributions to general unsecured creditors from net distributable proceeds, while subordinated and equity classes were canceled. Those provisions are described in the Second Amended Plan and the Confirmation Order. Post-confirmation reporting stated that the plan became effective on August 30, 2024 and that administrative claims payments had begun, with no general unsecured distributions reported as of the quarter ended March 31, 2025, according to Post-Confirmation Reports.

Debtor(s)	Sam Ash Music Corporation (and affiliates)
Case Number	24-14727
Court	U.S. Bankruptcy Court, District of New Jersey
Judge	Hon. Stacey L. Meisel
Petition Date	May 8, 2024
DIP Facility	Up to $20 million from Tiger Finance, LLC, with a roll-up of prepetition ABL obligations
Sale Buyer	Organizacion Gonher S.A. de C.V. (or designee)
Confirmation Date	August 15, 2024
Plan Effective Date	August 30, 2024
Claims Agent	Epiq

Restructuring Overview

Case posture and objectives. The chapter 11 cases were structured around an accelerated sale process supported by DIP financing. The debtors sought approval to use DIP proceeds and cash collateral under a budget while pursuing a marketing process that would culminate in a court-approved sale. Those objectives were laid out in the DIP Motion and the Final DIP Order, which authorized the financing facility and set parameters for budget compliance and cash application.

Liquidity conditions at filing. Court filings described a prepetition over-advance position under the asset-based lending facility and less than $1 million of available cash at the petition date. The declarations described this liquidity position as the immediate driver for a DIP facility tied to a fast sale timeline. The liquidity description appears in the First Day Declaration, and the lender identity and facility structure are described in the DIP Motion.

Sale execution and outcome. The court approved bidding procedures that set mid-June 2024 bid and auction dates and provided for a stalking horse framework, followed by a June 28 Sale Order approving a transaction with Organizacion Gonher S.A. de C.V. (or a designee). The sale terms included $15.2 million in cash consideration with specified adjustments, a deposit, an escrow amount at closing, and assumed liabilities and cure costs. The key sale mechanics are summarized in the Bidding Procedures Order and the Sale Order.

Plan confirmation and liquidation. The cases culminated in a second amended joint plan of liquidation that created a liquidating trust, provided full payment for secured and priority classes, and directed net distributable proceeds to general unsecured creditors on a pro rata basis. Subordinated and equity classes were cancelled. These terms are described in the Second Amended Plan and the Confirmation Order. Post-confirmation reporting stated the plan effective date and reported administrative claim payments, with no general unsecured distributions as of March 31, 2025, in Post-Confirmation Reports.

Retail wind-down and asset separation. The restructuring strategy separated the retail store wind-down from the sale of digital and wholesale assets. Public announcements described the closure of all 42 stores and the start of liquidation sales, while the court-approved sale addressed the e-commerce platform, intellectual property, and the Samson Technologies wholesale business. The public record on the retail wind-down appears in the announcement that all 42 stores would close and the store closing sales, while the asset scope is defined in the Sale Order.

Business Background and Operations

Sam Ash traced its history to 1924 and was described in contemporary coverage as a century-old American music retailer at the time of the bankruptcy filing. Media reports highlighted the long operating history in coverage of the chapter 11 petitions, including references to the company as a century-old music retailer and trade coverage that reported the chapter 11 filing. The filing announcement also emphasized the retailer's national footprint and restructuring objective, noting the intent to reposition the business.

The First Day Declaration provides the operating details that set the context for the restructuring. The debtors described a multi-channel platform that included retail stores, a dedicated e-commerce channel, and a wholesale business operated through Samson Technologies. The declaration identified the principal place of business as 278 Duffy Avenue in Hicksville, New York and listed four distribution centers in Hicksville (NY), Tampa (FL), Las Vegas (NV), and Indianapolis (IN). Those details appear in the First Day Declaration.

At filing, the debtors reported 42 retail stores across multiple states, with concentrations in Florida, California, Texas, and New York. The same declaration described the store footprint and distribution network, which formed the operational base for the prepetition business and shaped the liquidation strategy that followed the filing. The chapter 11 filings placed the emphasis on preserving the e-commerce and wholesale business while winding down store operations, a structure consistent with the asset sale approved later in the case. The store footprint and operational segments are discussed in the First Day Declaration.

Additional filings described the product focus of the business as marketing and distributing musical instruments, accessories, and stage and recording equipment through the retail stores, online channel, and the Samson wholesale platform. That overview of the product mix appears in the Debtor Business Overview and aligns with the asset disposition in the Sale Order.

To keep the operational profile clear, the business can be summarized as follows:

The separation between the physical retail footprint and the digital and wholesale assets is central to understanding the case outcome. The Sale Order approved a transaction that covered the e-commerce and Samson wholesale business rather than a going-concern transfer of the store base, with the stores instead liquidated through a going-out-of-business program. The asset mix is detailed in the Sale Order.

Store Closures and Going-Out-of-Business Sales

The bankruptcy filing followed a public announcement that all 42 stores would close and that store closing sales would begin immediately. The announcement explained the decision to wind down the retail footprint and framed the closures as part of a broader effort to reposition the business and preserve the value of non-store assets. In a separate industry update, Tiger Group described the process for store closing sales across the remaining locations.

The liquidation of the store base ran in parallel with lease marketing efforts. A&G Real Estate Partners marketed 27 store leases in 12 states as the retail footprint was wound down. The lease marketing process was reported in local business coverage, including reporting that the company planned to auction two remaining New Jersey stores. The leasing and liquidation activity underscored the distinction between the retail stores and the core digital and wholesale assets that were ultimately sold through the court-approved sale process.

Coverage of the filing and sale process emphasized the breadth of the store liquidation program, which included all operating retail locations at the time of filing. The public announcements and industry coverage made clear that the liquidation track was a core component of the restructuring plan, even as the chapter 11 process sought a buyer for the e-commerce and wholesale lines of business. The public record includes the announcement that the company would close all 42 stores and the liquidation sales run across the remaining locations.

Industry coverage also framed the store closure decision as a defining event in the restructuring timeline. Coverage described the chapter 11 filing and store closures alongside the bankruptcy filing, while trade coverage highlighted the shift to liquidation sales. Those reports provide public context for the store wind-down that ran alongside the court-supervised sale of the digital and wholesale assets.

Liquidity and DIP Financing

The debtors entered chapter 11 with limited liquidity and described a prepetition over-advance position under the asset-based lending facility. Court filings described less than $1 million of available cash at the petition date, a factor that drove the request for immediate DIP financing and budgeted cash collateral use. The liquidity description appears in the First Day Declaration, and the lender relationship is described in the DIP Motion.

Tiger Finance, LLC served as both the prepetition asset-based lender and the DIP lender. The debtors sought approval for a DIP facility of up to $20 million, with interim borrowings up to $18.125 million and a roll-up of prepetition obligations upon entry of the Interim DIP Order. Those terms appear in the DIP Motion and were later authorized on a final basis in the Final DIP Order. Law360 reported that the court approved the $20 million DIP financing over a U.S. Trustee objection, with Tiger Finance serving as the lender.

The financing documentation defined the pricing mechanics using a 9.0 percent applicable margin. The credit agreement specified that SOFR loans would be priced at the applicable margin plus Term SOFR, while prime rate loans would be priced at the applicable margin plus the prime rate. The agreement also included a floor concept for base and term rates and provided for a default rate of an additional 3.0 percent per annum. The pricing mechanics are described in the DIP Credit Agreement included with the DIP Motion.

The DIP Motion also detailed fee economics and milestones tied to the sale process. The motion described a $300,000 commitment fee earned and paid as of the effective date and a $300,000 exit fee that could be forgiven if no event of default occurred. The same motion tied financing approval to case milestones, including final DIP approval by June 5, a June 14 bid deadline, a June 20 auction commencement if needed, and a targeted closing date of July 17. These terms appear in the DIP Motion.

Budget controls and application of proceeds were key features of the Final DIP Order. The Final DIP Order tied permitted cash collateral and DIP usage to an approved budget and required collections and proceeds to be remitted to the DIP lender and applied first to prepetition obligations and then to DIP obligations. Those mechanics are set out in the Final DIP Order, which formalized the cash governance structure for the short sale timeline.

The financing approval followed a two-step process. The court entered the Interim DIP Order shortly after the petition date to authorize immediate access to DIP financing and cash collateral while the debtors pursued the sale process. The Final DIP Order entered on June 5 ratified the financing on a final basis and confirmed the roll-up structure and budget controls that governed liquidity use during the sale process, as reflected in the Final DIP Order.

The Final DIP Order also ratified the roll-up of prepetition obligations into the DIP facility while preserving challenge rights in the order. That structure effectively converted the prepetition ABL exposure into DIP obligations on the terms approved by the court, with a limited window for parties in interest to challenge the prepetition liens and claims. The roll-up and challenge rights framework is described in the Final DIP Order.

Sale Process and Asset Disposition

The debtors sought approval of bidding procedures on a rapid timetable, with mid-June dates for the bid deadline and potential auction. The court-approved schedule set a June 14 bid deadline and a June 20 auction if needed, followed by sale hearings on June 21 or June 28 depending on whether an auction occurred. The schedule is detailed in the Bidding Procedures Order. Contemporary coverage emphasized that the court approved the sale process with a baseline bid and reported that the assets were set for auction with a stalking horse bidder. Trade coverage reported that the June 20 auction produced a $15.2 million winning bid after competitive bidding.

The Bidding Procedures Order established a stalking horse framework and contemplated bid protections, including a $150,000 break-up fee. The order also set contract cure and adequate assurance objection deadlines, a standard component of a section 363 process with contract assumption and assignment. The break-up fee provisions are reflected in the Bidding Procedures Order.

The underlying Bidding Procedures Motion described a stalking horse framework in which an affiliate or designee of the DIP lender would serve as the initial bidder, and it identified consultation parties that included the DIP lender and any official committee. The motion sought approval of bid protections and a break-up fee structure that later appeared in the Bidding Procedures Order. Those elements are described in the Bidding Procedures Motion.

The Sale Order approved an asset purchase agreement in which Organizacion Gonher S.A. de C.V. (or a designee) served as the purchaser. The order documented $15.2 million of cash consideration, subject to specified adjustments, and required a $1.52 million deposit into escrow. It also provided for a $750,000 escrow amount deposited at closing, along with the assumption of specified liabilities and the payment of cure costs for assigned contracts. These terms are stated in the Sale Order. Industry coverage described Gonher as a Mexico-based distributor and manufacturer.

The cash consideration was subject to adjustments tied to working capital and paid time off obligations, and the escrow arrangements addressed potential post-closing adjustments under the asset purchase agreement. The Sale Order's description of these adjustments and escrow mechanics provides the framework for how the purchase price could change based on closing calculations. Those mechanics are stated in the Sale Order.

The approved transaction focused on the e-commerce operations, intellectual property, and the Samson Technologies wholesale business. The Sale Order also included standard section 363 findings for a good-faith purchaser and free-and-clear transfer of assets. The asset scope and good-faith findings are detailed in the Sale Order, which framed the transaction as a sale of non-store assets rather than a transfer of the retail store footprint. Capstone Partners reported that the transaction closed in July 2024, and Clifford Chance later said it advised Gonher on the acquisition.

Contract Assumption, Cure, and Post-Sale Disputes

The sale process required assumption and assignment of contracts needed to support the digital and wholesale businesses. The Bidding Procedures Order established deadlines for cure amount and adequate assurance objections, with different timing depending on whether an objection related to the stalking horse bidder or a subsequent successful bidder. Those procedural mechanics are summarized in the Bidding Procedures Order.

The Sale Order required cure costs for assumed and assigned contracts to be paid in cash at closing and stated that cure payments would not reduce the overall purchase consideration. The order also provided for designated contracts and disputed cure amounts, a structure that can create post-closing disputes if contract obligations remain in question. The cure mechanics appear in the Sale Order.

A post-sale contested matter illustrates how these mechanics played out. Blue Yonder, Inc. filed a motion to compel the purchaser to pay post-closing expenses under a designated contract during a dispute over cure amounts, seeking $155,180.66 through October 31, 2024 and a $1,492.12 per diem thereafter. The motion relied on provisions in the Sale Order that governed post-closing payment obligations for designated contracts while cure disputes were pending. The dispute and requested amounts are described in the Post-Closing Contract Expense Motion.

Plan Confirmation and Liquidating Trust

The debtors filed a second amended joint plan of liquidation on August 8, 2024, and the court entered a Confirmation Order on August 15, 2024. The Confirmation Order approved the disclosure statement and confirmed the plan. Those actions are reflected in the Second Amended Plan and the Confirmation Order. Media coverage of confirmation noted that the court approved the liquidation plan and overruled a U.S. Trustee objection.

The plan established a liquidating trust and a liquidating trustee to manage claim reconciliation and distributions. The trust structure provided a framework to administer remaining assets, pursue retained causes of action, and distribute net proceeds according to the plan's priority scheme. The trust structure and administration authority are described in the Second Amended Plan and reflected in the findings of the Confirmation Order.

Class treatment in the plan reflected a standard liquidation waterfall. Secured tax claims, other secured claims, and priority claims were unimpaired and paid in full or treated to render them unimpaired. General unsecured claims were impaired and entitled to pro rata distributions of net distributable proceeds. Intercompany claims, subordinated claims, and equity interests were impaired and received no distribution, with those interests cancelled under the plan. This structure is described in the Second Amended Plan.

The Confirmation Order included findings supporting debtor releases, consensual third-party releases, and exculpation provisions, while specifying that exculpation does not cover fraud, gross negligence, or willful misconduct. Those provisions are detailed in the Confirmation Order. Post-confirmation reporting stated that the plan became effective on August 30, 2024 and reported administrative claims payments in the early post-effective period. The plan effective date appears in a Post-Confirmation Report, and the reporting status for distributions appears in a later Post-Confirmation Report.

Post-Confirmation Reporting and Administration

The plan created a liquidating trust with authority to reconcile claims, pursue retained causes of action, and distribute net proceeds in accordance with the plan priorities. The liquidating trustee role and post-effective date authority appear in the Second Amended Plan, which provides the operational framework for post-confirmation administration.

Post-confirmation reporting provides a window into the liquidation progress. A report covering the period through the plan effective date identified August 30, 2024 as the effective date and marked the start of administrative claim payments. That reporting is documented in a Post-Confirmation Report. A subsequent report for the quarter ended March 31, 2025 reflected cumulative administrative payments and listed zero distributions to general unsecured creditors as of that reporting period. Those figures appear in a later Post-Confirmation Report.

The plan also authorizes the liquidating trustee to object to claims, resolve disputes, and make distributions as funds become available under the plan's priority scheme. Those authorities are described in the Second Amended Plan and provide the mechanism for eventual distributions once claims reconciliation and asset recoveries are complete.

The Post-Confirmation Reports also reinforce the priority structure in the plan, where administrative and priority claims are paid ahead of general unsecured distributions, and where recoveries for subordinated and equity classes are not contemplated. The reporting sequence aligns with the plan treatment described in the Second Amended Plan and the findings in the Confirmation Order.

Key Case Timeline

Frequently Asked Questions

When did Sam Ash file chapter 11?

Sam Ash Music Corporation and affiliates filed chapter 11 petitions on May 8, 2024. The company filed for bankruptcy protection, and coverage reported the chapter 11 filing.

What business lines did the debtors operate at filing?

Court filings describe a multi-channel operation that included 42 retail stores, an e-commerce platform, and a wholesale distribution business through Samson Technologies. The operational footprint and distribution centers are described in the First Day Declaration.

How many stores did Sam Ash have when the case began?

The First Day Declaration reported 42 retail stores at the petition date, with a multi-state footprint that included concentrations in Florida, California, Texas, and New York.

Why did the company seek DIP financing?

Court filings described a prepetition over-advance position under the asset-based lending facility and less than $1 million of available cash, leading the debtors to seek immediate DIP liquidity to fund an accelerated sale process. The liquidity description appears in the First Day Declaration and the financing request is laid out in the DIP Motion.

Who provided the DIP facility and what were the key terms?

Tiger Finance, LLC served as DIP lender and provided a facility of up to $20 million, including a roll-up of prepetition obligations. The motion also set out a 9.0 percent applicable margin and pricing at the applicable margin plus Term SOFR or the prime rate, along with fee terms. Those terms are described in the DIP Motion.

What assets were sold and who bought them?

The Sale Order approved a transaction in which Organizacion Gonher S.A. de C.V. (or a designee) acquired the e-commerce operations, intellectual property, and the Samson Technologies wholesale business for $15.2 million in cash consideration plus assumed liabilities and cure costs. The asset scope and buyer identity are described in the Sale Order.

What did the plan provide for unsecured creditors?

General unsecured claims were impaired and entitled to pro rata distributions of net distributable proceeds from the liquidating trust, while subordinated and equity classes received no distribution and were cancelled. The class treatment is described in the Second Amended Plan.

When did the plan become effective and what is the reported status of distributions?

Post-confirmation reporting stated that the plan became effective on August 30, 2024 and reported administrative claim payments, with no general unsecured distributions reported as of the quarter ended March 31, 2025. These updates appear in Post-Confirmation Reports.

Were the retail stores sold as a going concern?

The retail stores were not transferred in a going-concern sale. Public announcements described a plan to close all 42 stores and conduct liquidation sales.

Who is the claims agent for Sam Ash Music Corporation?

Epiq serves as the claims and noticing agent. The firm maintains the official claims register and distributes case notifications to creditors and parties in interest.

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