Joel R. Glucksman
Partner
201-896-7095 jglucksman@sh-law.comFirm Insights
RadioShack Considers Refinancing, Bankruptcy
Author: Joel R. Glucksman
Date: September 4, 2014
Key Contacts
Back
Electronics retailing chain RadioShack is considering refinancing or even a bankruptcy filing to clear up its financial troubles, sources told The Street.
While the company appears to prefer the refinancing option, this may not be possible, the news source explained. The company’s financial troubles center around a $250 million second-lien term loan held by Salus Capital Partners LLC. Salus is apparently not pleased with RadioShack’s plan to close about 1,100 stores as part of a turnaround strategy. While this would help RadioShack cut costs, it would also reduce the collateral that backs Salus’ loan. This, in turn, would reduce the potential for Salus to recover on its loan should RadioShack declare bankruptcy. In response to Salus’ concerns, RadioShack has reduced the planned closures to just 200 stores.
Standard General, the hedge fund that is working to rescue American Apparel Inc., is also reported to be in talks with RadioShack about methods to raise money to avert a bankruptcy, according to The Columbus Dispatch. Data compiled by Bloomberg indicated that Standard General owns almost 10 percent of RadioShack’s shares as of Aug. 26, up from 7 percent on June 30.
“As tough a battle as it’s going to be to turn the business around, I won’t completely write them off yet,” Will Frohnhoefer, a special-situations equity analyst for BTIG in New York, told the news source. “The new capital could get them through the rough patch.”
RadioShack has experienced nine consecutive quarters of losses, including a $98.3 million deficit in the most recent quarter, ending May 3, Bloomberg data cited by The Dispatch showed. This is up from the $43.3 million losses one year earlier. If things were to continue along their present course, the retailer is expected to run out of cash in 2015.
RadioShack isn’t the only U.S. business in hot-water. Here are a few of my other posts regarding popular businesses, that you may know and love, that are also facing bankruptcy:
- Crumbs Cupcakes – Still In The Running
- Sbarro Successfully Exits Bankruptcy
- Carol’s Daughter Files For Bankruptcy
- Hostess Brands Inc. bankruptcy posed risk to other pensions
- Practices: Bankruptcy & Creditors' Rights, Corporate Transactions & Business
- Locations: Red Bank, NJ, New York City, Little Falls, NJ
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Related Posts
See all
New Jersey’s Revised UHAC Regulations: What Residential Developers Need to Know About Affordable Housing Commitments
New Jersey residential developers with affordable housing obligations should carefully review their existing approvals, development agreements, and proposed deed restrictions in light of the State’s revised UHAC regulations (Uniform Housing Affordability Controls). The regulations, which took effect on November 6, 2025, significantly change the administration and physical requirements for affordable housing units. For developers with […]
Author: Wendy Rubinstein Quiroga
“No Comment” Culture: Why Silence Is Often the Riskiest Legal Strategy
A “no comment” response is sometimes the right call when a legal problem arises. As a blanket policy, however, it lets allegations go unanswered, deadlines pass, evidence disappear, and manageable disputes grow into expensive litigation. The businesses that fare best are usually the ones that say little publicly while acting decisively behind the scenes. When […]
Author: Sean M. Pena
Utility-Scale Battery Storage Projects: A Legal Roadmap for Developers, Property Owners and Other Stakeholders
Utility-scale battery energy storage systems (BESS) are becoming an increasingly important component of the electric grid throughout New Jersey, New York, and Pennsylvania. As renewable generation expands, electricity demand increases and grid operators seek greater flexibility, battery storage can help balance supply and demand while providing additional capacity and reliability. For developers, battery storage presents […]
Author: Nicholas Wall
Navigating Disputes: Hire a Partnership Dispute Lawyer
A falling out between partners can be disastrous for any business. In many cases, the partnership will not survive. If you are in an unworkable situation with your partners, it may be time to consult a partnership dispute lawyer experienced in handling partnership breakups and dissolutions before the situation deteriorates any further. It is easy […]
Author: Jay McDaniel
Section 363 Sales in Bankruptcy: What Businesses, Lenders, and Buyers Need to Know
When a company enters Chapter 11 bankruptcy, many assume the process will culminate in a lengthy reorganization plan. However, distressed businesses are increasingly being sold through a different mechanism — a sale under Section 363 of the United States Bankruptcy Code. A Section 363 sale allows a company, as a debtor-in-possession in bankruptcy, to sell […]
Author: John D. Giampolo
Zoning Laws Explained: What You Need to Know Before Buying Property
Before buying property, it is critical to determine whether local zoning laws may affect your plans. If you plan to redevelop the property, you will want to confirm that local zoning regulations permit development as intended. If acquiring property that is already developed, you must verify that the use is permitted in the underlying zoning […]
Author: Wendy Rubinstein Quiroga
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Sign up to get the latest from our attorneys!
Explore What Matters Most to You.
Consider subscribing to our Firm Insights mailing list by clicking the button below so you can keep up to date with the firm`s latest articles covering various legal topics.
Stay informed and inspired with the latest updates, insights, and events from Scarinci Hollenbeck. Our resource library provides valuable content across a range of categories to keep you connected and ahead of the curve.