BKY Cases and Plans

Radio Shack


March 18, 2015
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Salus Capital Seeks to Limit Credit Bidding Rights in RadioShack's Bankruptcy

Breaking News Alerts from Chapter11Dockets.com


As we reported yesterday on sister site Commercial Bankruptcy Litigation, one of RadioShack's lenders (Salus Capital Partners) filed an adversary complaint against other of RadioShack's lenders.  Today, the other shoe dropped as Salus filed a motion in RadioShack's Chapter 11 bankruptcy cases asking the bankruptcy court to limit those lenders' right to credit bid their claims in sales of RadioShack's assets.  In the motion, Salus, acting as the agent for lenders referred to as the...

February 2, 2015
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Breaking: RadioShack Receives ANOTHER Default Notice from Lender Salus Capital Partners, at Risk of Triggering Cross-Default Provisions of Other Debt Obligations

Breaking News Alerts from Chapter11Dockets.com


This afternoon, RadioShack Corp. (RSH) filed a Current Report on Form 8-K with the U.S. Securities and Exchange Commission.  You can find a copy of that document here.  In the Current Report, RadioShack disclosed that it has received a second notice of default from Salus Capital Partners, LLC, as agent for the lenders under the Credit Agreement, dated as of December 10, 2013, between RadioShack and the lenders: As previously disclosed on Form 8-K filed on December 2, 2014,...

January 28, 2015
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RADIO SHACK BANKRUPTCY WATCH VIII: Stiffing Landlords, Husbanding Cash, and Separating Sheep From Goats

  • Christopher M. Cahill
  • Lowis & Gellen LLP
  • Chicago, Illinois
  • (312) 628-7193
  • ccahill@lowis-gellen.com

Radio Shack is set to file a chapter 11 bankruptcy case in early February, 2015, i.e., next week. Radio Shack rents its 4,300 stores in North America, and it has been reported that the company has “delayed” January rental payments on some stores, and that it is talking with Sprint about the latter’s acquisition of store leases. Focusing on these facts alone, we can discuss a likely Radio Shack strategy to: (a) finally get around...

January 2, 2015
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RADIO SHACK BANKRUPTCY WATCH VII: RECOMMENDED READING On the Role of Credit Default Swaps in this Serial Drama

  • Christopher M. Cahill
  • Lowis & Gellen LLP
  • Chicago, Illinois
  • (312) 628-7193
  • ccahill@lowis-gellen.com

In the most recent installment of this Serial, we reported that the International Swaps and Derivatives Association ruled that the early December declaration of a Radio Shack default issued by a junior lending group (led by Salus Capital Partners LLC) did not constitute a “credit event” that would trigger the obligation of credit default swaps parties to pay counterparties under  those contracts. We also noted that there are outstanding some $25.7 billion in swaps contracts...

December 18, 2014
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RADIO SHACK BANKRUPTCY WATCH VI: Cut me, Mick!

  • Christopher M. Cahill
  • Lowis & Gellen LLP
  • Chicago, Illinois
  • (312) 628-7193
  • ccahill@lowis-gellen.com

Last week, we speculated that Salus Capital Partners LLC declared a default under its junior loan facility because it wants to acquire the senior secured facility, taken over in October by investor Standard General and others, at a steep discount. According to Fitch Solutions, Inc., in a liquidation held today, the $585 million senior secured ABL facility would be in the money, the $250 million junior secured term loan (held by Salus) would still be...

December 15, 2014
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RadioShack 6.75% Bonds Due 2019 Trading in Low Teens, Yielding Over 80%

Breaking News Alerts from Chapter11Dockets.com


According to FINRA's TRACE system, RadioShack's 6.75% bonds due 2019 have traded as low as 12.375 cents on the dollar today.  At those prices, the bonds would yield over 82% assuming that RadioShack did not default before maturity.  That final caveat, of course, is looking increasingly unlikely, despite the International Swaps and Derivatives Association's determination last week that a "credit event" had not yet occurred to trigger payment on credit default swaps related to RadioShack's debt....

December 5, 2014
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RADIO SHACK BANKRUPTCY WATCH V: O War, thou son of Hell!

  • Christopher M. Cahill
  • Lowis & Gellen LLP
  • Chicago, Illinois
  • (312) 628-7193
  • ccahill@lowis-gellen.com

When we last left Radio Shack, we imagined its new Chief Revitalization Officer as Henry V giving a St. Crispin’s Day speech to rouse beleaguered troops toward an improbable turnaround victory.  That scenario was premised upon Radio Shack’s largest shareholder, Standard General LP, having doubled down on its investment by replacing GE Capital as leader of a $585 million facility (which included all senior secured loans, plus a $140 million line of credit), having put...

October 30, 2014
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RADIO SHACK BANKRUPTCY WATCH IV: Enter Chief Revitalization Officer

  • Christopher M. Cahill
  • Lowis & Gellen LLP
  • Chicago, Illinois
  • (312) 628-7193
  • ccahill@lowis-gellen.com

As discussed here, here, and here, Radio Shack has progressed in a few months from a basket case months away from Code Blue to . . . a refinanced basket case under the control of certain aggressive and smart major shareholders who have doubled down on their prior investments.  At the least, with the new cash the lapsing of the company into Code Blue condition has been pushed back in time.  Having asserted their intention...

October 10, 2014
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RADIO SHACK BANKRUPTCY WATCH III: Shareholders Refinance the Company (or Else Bankruptcy!) – A Mere Delay in the Inevitable?

  • Christopher M. Cahill
  • Lowis & Gellen LLP
  • Chicago, Illinois
  • (312) 628-7193
  • ccahill@lowis-gellen.com

Large shareholders of Radio Shack have worked a financial restructuring deal that includes their contribution of $120 million into the company in exchange for preferred shares that can be converted into common shares, and a later rights offering which, with the other steps could result in these shareholders holding up to 80% of Radio Shack common stock plus control of the company’s board of directors.  The company gains liquidity through the holiday shopping season, breathing...

September 25, 2014
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RADIO SHACK BANKRUPTCY WATCH II: From Crystal Palace to Near Shore of Chapter 11

  • Christopher M. Cahill
  • Lowis & Gellen LLP
  • Chicago, Illinois
  • (312) 628-7193
  • ccahill@lowis-gellen.com

In 2001, about when Radio Shack spent more than $20 million to acquire the land (and public housing complex to tear down) upon which it built a fancy headquarters in Fort Worth, an AlixPartners managing director told the editor-in-chief of this site (not referring to Radio Shack) that the building of a “crystal palace” was a strong sign of a to-be-failing company.  Such a move betrays a lack of respect for cash flow.  By the...

September 17, 2014
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RADIO SHACK BANKRUPTCY WATCH I: The Broad Brush

  • Christopher M. Cahill
  • Lowis & Gellen LLP
  • Chicago, Illinois
  • (312) 628-7193
  • ccahill@lowis-gellen.com

Radio Shack was a hot commodity in the 1980s: localized, convenient storefronts, respected electronic merchandise in a solid niche.  In Treehouse of Horror II (1991), after Frankensteinian efforts succeeded in resuscitating Homer, Mr. Burns could gloat: ““Look, Smithers, a twitch!  It’s moving, it’s alive!  Oh, that fellow at Radio Shack said I was mad!  Well, who’s mad now?!”  In 2014, Radio Shack needs the zapping. The emergence of internet commerce and consumer comfort with transacting...



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