Bankruptcy Judge Brendan Shannon Tuesday approved the sale of 1,740-plus RadioShack stores to Standard General, saying the hedge fund’s offer was “economically superior” to another led by Salus Capital and that it preserved stores and jobs rather than liquidating a “century-old American retailing icon.”
The approved plan has Sprint operating store-within-store concept shops in most of the surviving stores.
Salus last week had called Standard General’s offer a “sham” because it involves a significant credit bid or canceling of its loans to the retailer. That bid, valued at $160 million all told, will save some 7,500 jobs.
This auction entailed a long, bumpy, and contentious process, drawn out in part by objections from RadioShack lender Salus that would have liquidated the company to pay off its substantial loans. That maybe shouldn’t have been a surprise after the contentiousness that RadioShack CEO Joseph C. Magnacca encountered for months from Salus and other lenders as he tried to fashion a turnaround by closing stores. Now, stores have been closed all right, but thanks to this auction, stores will also stay open, if just a few of them.
The new RadioShack is not the old RadioShack; in fact, the retailer emerging from this auction has temporary rights to the RadioShack name and certain assets. Standard General won, but the retailer will need more money, beyond the cancelation of debts, to stay afloat.