General Wireless Operations Inc., best known as wireless and electronic store chain RadioShack, filed for Chapter 11 bankruptcy for the second time on March 8, 2017. The Fort Worth, a Texas-based company first filed for protection in 2015, which led to the reorganization of business and the closing of nearly 2,400 of its stores, according to USA Today.
As of now, the company has plans to close roughly 200 more of its stores and reevaluate the options for its other 1,300 locations. Additionally, 360 of the stores RadioShack shares with Sprint – a business move they made after the first bankruptcy – will close. Overall, this will impact about 1,850 of the company’s employees.
In a statement, Dene Rogers, RadioShack’s president and chief executive officer said that the company has made progress since filing for bankruptcy in 2015, and that doesn’t go unnoticed.
“Since emerging from bankruptcy two years ago as a privately owned company, our team has made progress in stabilizing operations and achieving profitability in the retail business, while our partner Sprint managed the mobility business,” he said. “In 2016, we reduced operating expenses by 23%, while at the same time saw gross profit dollars increase 8%. Over the same time, we integrated FedEx pick-up/drop-off into 140 RadioShack locations, delivered to customers over 700,000 Hulu login pins and sold more than a million RadioShack private brand headphones and speakers delivering high quality, value- based audio products to consumers across the country.”
While RadioShack has seen improvement, they’ve witnessed downfalls as well. That’s why Rogers believes filing for Chapter 11 protection again is the best way to move forward.
“However, for a number of reasons, most notably the surprisingly poor performance of mobility sales, especially over recent months, we have concluded that the Chapter 11 process represents the best path forward for the Company,” he said. “We will continue to work with our advisors and stakeholders to preserve as many jobs as possible while maximizing value for our creditors.”
A downward spiral for electronics stores
RadioShack isn’t the only company feeling the whiplash of the digital age. Circuit City led the path in 2009 when it failed to find a buyer, according to Fortune. More recently, electronics and appliances retailer hhgregg filed for Chapter 11 bankruptcy on March 7, 2017.
What are the issues these physical retailers can’t seem to tackle? Keeping up with the ever-changing landscape in technology and matching the inventory that can be found online, according to The New York Times. For many consumers, the ability to sit back, relax and order electronics from the comfort of the couch sounds more appealing than driving to the mall and walking through a crowd of people to make a purchase. It’s as simple as that. Any retailer that wants to survive the change in shopping trends needs to take advantage of online sales and may want to consider developing an e-commerce business plan.
Are you a ? Have you been sued by a bankrupt? If you have any questions about your rights, please contact me, , at 201-806-3364.
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 […]
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 […]
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 […]
A Whistleblower Just Filed a Complaint Against Your Company: Here's What to Do Now
Few situations create more uncertainty than learning that an employee has filed a whistleblower complaint. Questions arise immediately: Is the allegation legitimate? Should the employee be placed on leave? Do we need to notify our insurance carrier? Are we now prevented from disciplining the employee if there are unrelated ongoing work related issues? There is […]
Assignment for the Benefit of Creditors: An Alternative to Bankruptcy for Distressed Businesses
When a business reaches the point where it can no longer service its debts or otherwise resolve its liabilities, management is often faced with a difficult question: is a bankruptcy filing necessary or is there another way to perform an orderly liquidation or sale of the business assets? While Chapters 7 and 11 of the […]
Breaking Down New Jersey’s “Mansion” Tax: What Buyers and Sellers Need to Know
For many years, the New Jersey Mansion Tax has been a significant consideration in high-value real estate transactions. Recent legislative changes, however, have substantially altered how the tax operates, including who is responsible for paying it and the amount owed in certain transactions. Whether you are purchasing, selling, or investing in New Jersey real estate, […]
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.
Let`s get in touch!
Sign up to get the latest from the Scarinci Hollenbeck, LLC attorneys!
