Emile Harmon’s latest post.
According to the Wall Street Journal, the hedge fund Standard General LP has taken over RadioShack Corp., which filed for Chapter 11 bankruptcy earlier this year, in a deal that pares the company down to 1,743 stores from 4,000, but allows it to get out of bankruptcy and save roughly 7,500 jobs. The bankruptcy court’s ruling came down to the wire, just hours before a deadline after which complete liquidation of the company was a very real possibility. If this hadn’t come through, it’s possible that there would be no RadioShack stores anymore.
And actually, that is still a possibility, considering the newly solvent RadioShack only has the rights to the name “RadioShack” temporarily, for just six more months, unless Standard General pays more money to retain the name and certain other patents. That would be in addition to this initial bid, which is valued at $160 million.
Litigation involving RadioShack is certainly not over. In total, it is estimated that bondholders, suppliers, and landlords are still owed roughly $500 million.
RadioShack’s recent woes are summarized well in another Wall Street Journal article from late last year: “What many years ago was a point of pride for the company – that more than 90% of Americans then lived within five miles of a RadioShack – has become its Achilles’ heel. The cost of maintaining and stocking its 4,400 company owned outlets “pushed the chain into bankruptcy. While still afloat, and having avoided complete liquidation, many of RadioShack’s problems other than its number of outlets haven’t gone anywhere. They still have to compete with online sales of the products they offer. They will need to get creative if they are to thrive once again.
from Emile Harmon http://ift.tt/1DvUf21
theemileharmon 