A lawyer for RadioShack on Friday said the bankrupt electronics chain would accept all kinds of bids for its assets, including from liquidators, although any transaction would require court approval.
RadioShack, which filed for Chapter 11 protection on Thursday, has a tentative deal to sell as many as 2,400 of its 4,100 stores to an affiliate of hedge fund Standard General, its lender and largest shareholder. As part of that deal, wireless company Sprint Corp would operate within those stores.
But any better bids, which RadioShack lawyer David Fournier said could include liquidation offers, may trump that deal.
“We don’t know exactly where we’re going to end up,” Fournier said at a hearing in U.S. Bankruptcy Court in Delaware.
RadioShack, which posted 11 straight quarterly losses after failing to transform itself into a destination for mobile phone buyers, hopes to avoid the fate that plagues many bankrupt retailers: liquidation.
U.S. bankruptcy law, which gives companies in Chapter 11 just 210 days to decide whether to break or reject leases, makes it hard for retailers to formulate turnaround plans.
A court hearing on procedures for bidding on RadioShack’s assets is set for Feb. 20, with a final sale hearing tentatively scheduled for March 12. RadioShack in court papers said it hoped to expedite the process due to strict timeline milestones in the Standard General deal.
Separately, RadioShack has said it will close more than 1,700 stores, a process it hopes to largely complete by the end of this month to avoid paying an estimated $7 million in March rent.
Judge Brendan Shannon on Friday said RadioShack could begin taking initial steps to close those stores over the weekend, but any further measures will require additional approval. The company is expected to seek that approval at a follow-up hearing scheduled for Monday.
A proposed $285 million bankruptcy loan from a lender group led by DW Partners will also be addressed on Monday.
Any deal to liquidate or sell stores could face objections from stakeholders. A lawyer representing Texas Attorney General Ken Paxton said at Friday’s hearing that his office might have concerns over whether the Standard General sale would protect consumer privacy.
RadioShack’s unsecured creditors are expected to form a committee later this month, adding another key voice to restructuring negotiations.
The case is In Re RadioShack Corp, U.S. Bankruptcy Court, District of Delaware, No. 15-10197.
Source : Reuters
