Court OKs loan to fund RadioShack store closings
RadioShack Corp., the bankrupt consumer-electronics chain, on Monday won interim court approval of a loan to fund store closings as it seeks to cut the number of locations roughly in half.
RadioShack said it could potentially close 56 stores in Michigan — including 26 in the Metro Detroit area — according to a filing on its website.
The retailer agreed to cap its temporary borrowing at $10 million, Greg Gordon, a lawyer for RadioShack, told U.S. Bankruptcy Judge Brendan Shannon on Monday in Wilmington, Del. As many as 2,100 of the company’s more-than 4,000 stores are to be closed under a deal with liquidators.
“These steps are the culmination of a thorough process intended to drive maximum value for our stakeholders,” CEO Joe Magnacca said in a statement last week.
Last Friday, Shannon allowed RadioShack to begin store-closing sales.
The company filed for bankruptcy a day earlier, saying it had an agreement to sell 1,500 to 2,400 of its locations to a unit of Standard General LP, its biggest shareholder.
Standard General has a deal with wireless carrier Sprint Corp. to set up stores-within-stores at as many as 1,750 of Radio Shack’s locations.
RadioShack, which is based in Fort Worth, Texas, filed for bankruptcy last week after trying to keep up with competitiors such as Amazon.com Inc. and Wal-Mart Stores Inc. while at the same time coping with an industrywide slump in demand for consumer electronics.
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