
Joel R. Glucksman
Partner
201-896-7095 jglucksman@sh-law.comFirm Insights
Author: Joel R. Glucksman
Date: February 24, 2015

Partner
201-896-7095 jglucksman@sh-law.comAfter reporting losses in each of the last 11 quarters and coming dangerously close to running out of cash, RadioShack was hoping to file for protection under Chapter 11 of the bankruptcy law as early as Feb. 2, according to The Wall Street Journal. However, the retailer and its advisors were still hammering out the details of an agreement with hedge fund Standard General LP, which is attempting to serve as the lead bidder at RadioShack’s bankruptcy auction. Standard General became the company’s largest shareholder last year and led a round of financing that helped it through the holidays.
The struggling company also hasn’t yet finalized the terms of a loan that would go toward funding its operations through the restructuring process, the news source reported. Salus Capital Partners, a financial organization that has provided financing for RadioShack before, has offered to provide a loan of $500 million for this purpose. However, the two parties must first discuss how many of the retailer’s stores will be closed and what protections will be in place for the so-called “debtor-in-possession” loan.
Salus and RadioShack have butted heads in the past, according to the Journal. The former recently prevented the latter from increasing its efforts to close stores, citing a condition in a previous loan to the company that limits it to 200 closings per year. RadioShack announced plans to close up to 1,100 stores, which Salus did not consent to.
Workers at a number of RadioShack stores told the news source that the company has ordered them to ship big-ticket items to nearby stores and cut prices on remaining inventory. There are 4,300 RadioShack stores in North America, but the company has said that it needs to close many of them.
Rumors have been swirling regarding potential buyers of a large number of RadioShack leases. Sprint and Amazon are thought to be the major contenders, according to Forbes.
Sprint is allegedly considering the prospect of buying a lot of RadioShack stores to extend its own retail reach, according to the news source. It has also been reported that it is considering a move to open co-branded stores, which might sell both Sprint and RadioShack merchandise. While this is an interesting possibility, Paula Rosenblum at Forbes noted that Sprint appears to have about as many locations as its competitors in at least some major markets. She questioned, rightly in my opinion, whether Sprint shareholders would be interested in picking up the expense represented by these many additional stores with what may be diminishing returns.
The rumor that Amazon may purchase some of these stores is fascinating. So far, the online retail giant has eschewed any serious commitment to consumer-facing retail space, but Rosenblum notes that many tech companies are showing an interest in so-called “cross channel” capabilities. Could Amazon be moving into new markets?
As RadioShack attempts to reorganize into a smaller, sleeker form, it is worth considering the way that this retailer got left behind in the modern age. As consumers move online for small electronics purchases, to big box stores for TVs, to carriers for smartphones and to manufacturers for computers, a one-time retail giant is left without much of a market.
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.

The application of traditional federal securities laws to crypto assets continues to evolve. In some cases, the Securities and Exchange Commission (SEC) considers tokens and other digital assets to be securities. This makes them subject to federal securities law, including the Securities Act of 1933 and the Securities Exchange Act of 1934. This classification has […]
Author: Bryce S. Robins

While the New York City real estate market can be extremely competitive, moving too quickly often backfires. Before purchasing a condominium or cooperative in New York City, it is important to do you homework. Purchasing property in NYC can involve a dizzying number of legal issues. These include condo and co-op rules, rent restrictions, and […]
Author: Jesse M. Dimitro

Smart contracts feature a unique blend of legal agreement and technical code. This innovation has the potential to reshape how business is conducted. At the same time, smart contract legal issues around enforceability, jurisdiction, identity, and compliance are common. The legal framework for these self-executing agreements is still evolving. What Are Smart Contracts? Smart contracts, […]
Author: Bryce S. Robins

Retaining top talent continues to be one of the greatest challenges facing employers today. Even in an employer’s market, the loss of a key employee can disrupt operations and result in significant costs. While compensation plays a role, long-term retention often depends on workplace culture, communication, and employee engagement. One increasingly popular strategy for improving […]
Author: Angela A. Turiano

Secured transactions form the backbone of a wide range of business dealings, including business loans, mortgages, and inventory financing. Because the stakes are often high and relatively minor oversights can have drastic consequences, lenders and borrowers should thoroughly understand how to form an enforceable security agreement that protects their legal rights. What Is a Secured […]
Author: Dan Brecher

Cashing a check marked “paid in full” can be a risky endeavor, particularly if you don’t fully understanding the legal implications. If you are owed more than the amount of the check you accept and deposit, you may waive your right to collect the full disputed amount. That is why you should consider either rejecting […]
Author: Dan Brecher
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Consider subscribing to our Firm Insights mailing list by clicking the button below so you can keep up to date with the firm`s latest articles covering various legal topics.
Stay informed and inspired with the latest updates, insights, and events from Scarinci Hollenbeck. Our resource library provides valuable content across a range of categories to keep you connected and ahead of the curve.
Let`s get in touch!
Sign up to get the latest from the Scarinci Hollenbeck, LLC attorneys!