By Peg Brickley
RadioShack won court approval of a lender takeover that will
send the retailing operation out of bankruptcy trimmed-down, but
still selling electronics.
Tuesday's decision from Judge Brendan Shannon clears the way for
Standard General to save 1,743 stores and 7,500 jobs in a
streamlined relaunch of the business.
Overtaken by newer retailers, the one-time electronics pioneer
was weighed down with some 4,000 outlets and too much debt when it
filed for Chapter 11 bankruptcy.
Standard General intends to operate most of the salvaged stores
in an alliance with Sprint Corp. The arrangement is designed to
draw mobile-phone shoppers to the electronics goods outlets without
dragging on RadioShack's profits.
The ruling came hours before a deadline that could have tipped
the sprawling chain into an all-out liquidation. RadioShack filed
for bankruptcy protection Feb. 5, and immediately launched
going-out-of-business sales at nearly 2,000 stores.
The plan was to try to save the rest, through a sale to lender
Standard General LP, a hedge fund that took an interest in
RadioShack last year. March 31 was a crucial date, as RadioShack
didn't have the spare cash to cover April rent.
Valued at about $160 million, Standard General's offer was the
best bid to come out of an auction last week where the new owner
competed with liquidators and with Salus Capital Partners, another
lender.
Write to Peg Brickley at peg.brickley@wsj.com
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