
Joel R. Glucksman
Partner
201-896-7095 jglucksman@sh-law.comFirm Insights
Author: Joel R. Glucksman
Date: July 22, 2015
Partner
201-896-7095 jglucksman@sh-law.comThe Wall Street Journal reported that the move would threaten the chances for Radioshack to emerge as a standalone business after bankruptcy proceedings.
As it calculates the likely results from liquidation of the debtor, Salus Capital is apparently ready to cut its losses and push the company toward Chapter 7. Salus Capital reports that the professional fees accrued during the bankruptcy are already exorbitant, and that Radioshack has sold most of its assets, meaning that there is no benefit to it remaining in Chapter 11 liquidation. The lender alleged that Radioshack is insolvent because it owes more than $600 million to bondholders, landlords and suppliers for its 4,000 retail locations. Furthermore, the retailer is expected to accrue close to $45 million in legal fees and operating losses.
The final hearing is set for this week, however Radioshack has reported that its Chapter 11 restructuring plan will be finalized by July 22, which further complicates the case. In the proposal, Radioshack would set up a trust enabling secured lenders to pursue litigation claims for unpaid bills.
Radioshack’s lawyers have alleged that Salus Capital has taken cash out of the company for professional fees, further sending the retailer into staggering debt. Therefore, if the company is pushed into Chapter 7 bankruptcy, Salus would effectively walk away from its own share of the $39 million in debt. The move would also allow Salus to install a trustee to replace Radioshack’s legal and advisory teams, thereby negating the company’s debt restructuring plan.
RadioShack filed an objection to Salus Capital’s move for a conversion to Chapter 7 early on June 22. In the objection, Radioshack claimed that the company has met all scheduled debt obligations for Salus Capital and other senior bondholders. Therefore, it argued, a move to Chapter 7 liquidation is unnecessary at the moment.
According to the WSJ, new court documents reported that funds from liquidation are still coming in, including more than $100 million expected in July. The argument against Salus Capital’s claim is therefore that the debt tally is impossible to calculate with the company only midway through the bankruptcy process. Indeed, the parties argue that the bankruptcy has actually been successfully handled.
In fact, new court papers show that since its sale to Standard General, Radioshack has effectively repaid over $250 million in second rank debt. This includes $55 million toward the reported $250 million debt owed to Salus Capital.
Are you a creditor in a bankruptcy? Have you been sued by a bankrupt? If you have any questions about your rights, please contact me, Joel Glucksman, at 201-806-3364.
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Your home is likely your greatest asset, which is why it is so important to adequately protect it. Homeowners insurance protects you from the financial costs of unforeseen losses, such as theft, fire, and natural disasters, by helping you rebuild and replace possessions that were lost While the definition of “adequate” coverage depends upon a […]
Author: Jesse M. Dimitro
Making a non-contingent offer can dramatically increase your chances of securing a real estate transaction, particularly in competitive markets like New York City. However, buyers should understand that waiving contingencies, including those related to financing, or appraisals, also comes with significant risks. Determining your best strategy requires careful analysis of the property, the market, and […]
Author: Jesse M. Dimitro
Business Transactional Attorney Zemel to Spearhead Strategic Initiatives for Continued Growth and Innovation Little Falls, NJ – February 21, 2025 – Scarinci & Hollenbeck, LLC is pleased to announce that Partner Fred D. Zemel has been named Chair of the firm’s Strategic Planning Committee. In this role, Mr. Zemel will lead the committee in identifying, […]
Author: Scarinci Hollenbeck, LLC
Big changes sometimes occur during the life cycle of a contract. Cancelling a contract outright can be bad for your reputation and your bottom line. Businesses need to know how to best address a change in circumstances, while also protecting their legal rights. One option is to transfer the “benefits and the burdens” of a […]
Author: Dan Brecher
What is a trade secret and why you you protect them? Technology has made trade secret theft even easier and more prevalent. In fact, businesses lose billions of dollars every year due to trade secret theft committed by employees, competitors, and even foreign governments. But what is a trade secret? And how do you protect […]
Author: Ronald S. Bienstock
If you are considering the purchase of a property, you may wonder — what is title insurance, do I need it, and why do I need it? Even seasoned property owners may question if the added expense and extra paperwork is really necessary, especially considering that people and entities insured by title insurance make fewer […]
Author: Patrick T. Conlon
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
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.
The Wall Street Journal reported that the move would threaten the chances for Radioshack to emerge as a standalone business after bankruptcy proceedings.
As it calculates the likely results from liquidation of the debtor, Salus Capital is apparently ready to cut its losses and push the company toward Chapter 7. Salus Capital reports that the professional fees accrued during the bankruptcy are already exorbitant, and that Radioshack has sold most of its assets, meaning that there is no benefit to it remaining in Chapter 11 liquidation. The lender alleged that Radioshack is insolvent because it owes more than $600 million to bondholders, landlords and suppliers for its 4,000 retail locations. Furthermore, the retailer is expected to accrue close to $45 million in legal fees and operating losses.
The final hearing is set for this week, however Radioshack has reported that its Chapter 11 restructuring plan will be finalized by July 22, which further complicates the case. In the proposal, Radioshack would set up a trust enabling secured lenders to pursue litigation claims for unpaid bills.
Radioshack’s lawyers have alleged that Salus Capital has taken cash out of the company for professional fees, further sending the retailer into staggering debt. Therefore, if the company is pushed into Chapter 7 bankruptcy, Salus would effectively walk away from its own share of the $39 million in debt. The move would also allow Salus to install a trustee to replace Radioshack’s legal and advisory teams, thereby negating the company’s debt restructuring plan.
RadioShack filed an objection to Salus Capital’s move for a conversion to Chapter 7 early on June 22. In the objection, Radioshack claimed that the company has met all scheduled debt obligations for Salus Capital and other senior bondholders. Therefore, it argued, a move to Chapter 7 liquidation is unnecessary at the moment.
According to the WSJ, new court documents reported that funds from liquidation are still coming in, including more than $100 million expected in July. The argument against Salus Capital’s claim is therefore that the debt tally is impossible to calculate with the company only midway through the bankruptcy process. Indeed, the parties argue that the bankruptcy has actually been successfully handled.
In fact, new court papers show that since its sale to Standard General, Radioshack has effectively repaid over $250 million in second rank debt. This includes $55 million toward the reported $250 million debt owed to Salus Capital.
Are you a creditor in a bankruptcy? Have you been sued by a bankrupt? If you have any questions about your rights, please contact me, Joel Glucksman, at 201-806-3364.
Let`s get in touch!
Sign up to get the latest from the Scarinci Hollenbeck, LLC attorneys!