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
Reputational Risk and Legal Exposure: Why New Jersey Businesses Must Manage Them Together
New Jersey businesses must manage legal and reputational risk together because modern disputes play out on two fronts at once: the legal proceeding itself and the court of public opinion, where customers, employees, investors, and business partners often reach conclusions long before a judge or jury has had the opportunity to evaluate the facts. Success […]
Author: Sean M. Pena
Eviction Is Not Always the End: Understanding Post-Possession Rent Claims in New Jersey and New York
No. An eviction does not automatically end a tenant’s obligation to pay rent. Post-eviction rent claims are common because recovering possession resolves who has the right to occupy the premises, but it does not extinguish the tenant’s contractual obligations under the lease. Whether unpaid or future rent remains owed depends on three factors: the lease’s […]
Author: Donald M. Pepe
Company Dissolved? Legal and Financial Consequences to Expect
A company is dissolved; legally, it ceases to exist. Accordingly, dissolution results in significant legal and financial consequences. It is a process that must be properly managed to avoid continuing liability. The Corporate Dissolution Process Corporate dissolution is the legal process of formally closing a corporation, paying its debts and distributing the remaining assets. Most […]
Author: Jay McDaniel
The Legal Implications of Signing a Triple Net Lease
A triple net lease is a commercial lease in which the tenant pays the property’s real estate taxes, insurance, and maintenance costs, known as the three nets, in addition to base rent. They are most often used in freestanding retail and office buildings and in large single-tenant industrial properties, with terms that typically run 10 […]
Author: Donald M. Pepe
When to Settle and When to Fight: A Litigator's Framework
Every lawsuit comes with a cost, and knowing when to settle a lawsuit is one of the most consequential decisions a business owner will face. Experienced litigators understand how to minimize cost and obtain certainty for their clients. For many business owners, the decision is viewed almost entirely through a financial lens: What will it cost […]
Author: Sean M. Pena
Types of Business Law Services Companies Actually Use
Business law services are legal services that help companies form, operate, transact, protect assets, manage risk, and resolve disputes. The phrase can sound broad because it is broad. A company may need help with entity formation one month, contract review the next, a commercial lease after that, and a business dispute later in the year. […]
Author: Scarinci Hollenbeck, LLC
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.