Tower Records exits Chapter 11 as sale looms

US music retailer Tower Records has emerged from bankruptcy protection, with trimmed down debt and creditors owning 85 per cent of the business.

The 93-store retailer, which filed for Chapter 11 a little more than a month ago, is now ready to be sold, according to US press reports.

Likely suitors include venture capitalists Sun Capital Partners and Yucaipa Cos.

Creditors, led by UK-based Barclays Bank, are presently running the business.

The remaining 15 per cent of the retailer is held by founder Russ Solomon and other family members.

Tower was hit by discounting and downloading of music from the Internet.

Last year, Tower Records sold its remaining UK stores to entertainment retailer Virgin.