Retail

RadioShack Prepares Bankruptcy Filing

January 15, 2015

RadioShack Corp. is preparing to file for bankruptcy protection as early as next month following a sputtering turnaround effort that left the electronics chain short on cash, the Wall Street Journal reported today. A filing could come in the first week of February, as the Fort Worth, Texas-based company has reached out to potential lenders who could help fund its operations during the process. Meanwhile, RadioShack is in talks with a private-equity firm that could buy its assets out of bankruptcy. The retailer, which employed 24,000 people late last year, has made clear it is running dangerously low on cash after posting losses in each of the last 11 quarters. Its stock-market value has fallen to less than $50 million.

Salus Capital Offers RadioShack $500 Million Bankruptcy Loan

January 13, 2015

Salus Capital Partners has offered RadioShack Corp. $500 million in bankruptcy financing, according to people familiar with the matter, a move that could increase the lender’s influence if the struggling retailer ends up in chapter 11, the Wall Street Journal reported today. RadioShack hasn’t said that it plans to seek bankruptcy protection, but the Fort Worth, Texas-based consumer electronics retailer is running out of cash after posting losses in each of the last 11 quarters. In September, it warned that it could be forced into bankruptcy court if it couldn’t raise new funds or get relief from lenders, including Salus, that are blocking its effort to close hundreds of stores. Salus’s unsolicited offer for a debtor-in-possession loan expires on Thursday. The new debt would replace a $585 million financing package the company first obtained in late 2013, some of which consists of credit lines dependent on the value of RadioShack assets.