The Great RadioShack Bankruptcy Auction Standoff may be over. The 94-year-old electronics retailer declared bankruptcy in February, and then closed around half of its stores, selling their leases. The company wanted to rid itself of the rest of its stores before April began so they won’t have to pay April rent on all of those stores out of money that should be going to their creditors.
The most important creditor here is Standard General, which is using RadioShack’s debt to the hedge fund as part of its bid for 1,740 of the chain’s remaining stores. Today, the bankruptcy court approved the sale of those remaining stores to despite the objections of other lenders. RadioShack preferred the bid from Standard General, which consisted of debt forgiveness and a modest amount of cash.
Backers of the SprintShack plan say that it will keep more than 7,000 current RadioShack retail employees working. The judge decided that Standard General’s bid was the superior one, and had the added benefit of “saving a century-old American retail icon.”
The highest competing bid for the company was from another lender, Salus Capital Partners. While that bid was entirely in cash rather than debt forgiveness, it would have led to having liquidators sell store inventory, leases, and fixtures
RadioShack co-branding of stores with Sprint wins court approval [RadioShack]
by Laura Northrup via Consumerist
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