There Is No Charge For The First Consultation: 903-266-1843

Law Office of Gordon Mosley
A Bankruptcy & Consumer law Firm
20 Years Experience Helping People Gain A Fresh Start

Electronics company RadioShack files Chapter 11 bankruptcy

Business owners who have been in their particular industry for some time may realize that sometimes, restructuring or closing a business is a much smarter choice than sustaining continuing losses. However, the initial decision to go through this process, either through bankruptcy or some other means, is among the toughest decisions that any business owner may have to make -- even if it is the best decision when all paths are considered.

Recently, RadioShack, a well-known electronics chain, filed for Chapter 11 Bankruptcy. According to news reports, the bankruptcy filing did not come as a surprise because the company was reportedly sustaining steady losses for the past 11 months. However, RadioShack chose not to liquidate all of its assets; instead, it struck a deal with telecom giant Sprint and General Wireless, a Standard General affiliate, in which RadioShack would be selling many of its stores to those two companies.

As a part of the deal, Sprint and General Wireless will buy 2,400 and 1,500 stores, respectively, of the more than 4,000 stores that RadioShack owns and operates across the United States. These two companies, along with RadioShack, will start a chain of co-branded stores at as many as 1,750 of the acquired locations. As a part of the bankruptcy process, RadioShack has also engaged Hilco, a liquidation firm, to close some of the under-performing stores that the company presently operates.

According to RadioShack's bankruptcy petition filed in Delaware, RadioShack's assets are worth approximately $1.2 billion but its debts are much greater, at $1.39 billion. However, for operating the business during the bankruptcy process, RadioShack has been successful in obtaining a loan of $285 million from several lenders, which is being led by DW Partners.

Despite the specific issues facing RadioShack, filing for business bankruptcy is not necessarily a major setback in a business owner's life. Instead, that business owner must look at the bankruptcy filing as an instrument of debt relief. However, bankruptcy, or debt relief, is a complex area of the law and often, a lack of thorough understanding may land a business owner in further financial trouble. Being fully informed is a great first step towards charting the best course forward.

Source: Reuters, "RadioShack files for bankruptcy, sell up to 2,400 stores," Nick Brown, Feb. 5, 2015

No Comments

Leave a comment
Comment Information

Start Fresh - We Can Help!

Bold labels are required.

Contact Information
disclaimer.

The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form.

close

Privacy Policy

Contact Information

Law Office of Gordon Mosley

Tyler Office
4411 Old Bullard Rd.
Tyler, TX 75703

Phone: 903-266-1843
Tyler Law Office Map

Gun Barrel City Office
431 N Gun Barrel Ln
Suite 112
Gun Barrel City, TX 75156

Phone: 903-266-1843
Map & Directions

  • Local: 903-266-1843

  • Fax: 903-581-4038

  • Facebook
  • Google Plus
  • Linkedin
  • Twitter
  • Review Us