RadioShack Obtains Bankruptcy Court’s Approval to Sell Brand Name and Customer Data

by San Antonio Attorney

A U.S. bankruptcy judge has allowed RadioShack to sell its brand and data for $26 million. The buyer is an affiliate of Standard General. The judge rejected the claim of a competing buyer that the bidding process was not fair.

RadioShack has also overcome oppositions to the sale from certain state attorneys general who were apprehensive the deal could violate the privacy of consumers.

Those issues were the final significant obstacles to the bankrupt company’s plan to put up for sale its intellectual property to General Wireless, which purchased a bulk of RadioShack stores in March.

China-based Wonderland Investment Group also offered to buy the intellectual property during the auction. It claimed that RadioShack stopped the step-by-step process of the bidding, unexpectedly informing parties they had half an hour to provide their last bids covertly.

Wonderland offered $17.3 million, but said it could have offered up to $30 million and beaten the S26.2 million bid of General wireless had the preliminary rules been adhered to.

In the end, Bankruptcy Judge Brendan L. Shannon sided with RadioShack saying the company had the ability to change the auction process as it deemed necessary.

According to the lawyer of RadioShack, the auction for two days had become tense, and felt prospect buyers might be discouraged if incremental auction proceeding took longer.

Bankruptcy judges usually find it difficult to reopen auctions – even in the event they could generate more money – mainly to prevent bidders from refusing to get involved and then giving new offers after the value of the item has been established.

Radioshack will turn over 67 million customers’ information to   Standard General. The new owner initially wanted the data of 117 million customers.

The struggling chain of wireless and electronics stores filed for Chapter 11 bankruptcy in February because of online competitors. But it plans to continue its stint during bankruptcy, with Standard General looking to retain the acquired stores in business by co-branding with Sprint.

The most sensible thing to do if you are contemplating about bankruptcy is to talk with a reputable San Antonio Bankruptcy attorney that specializes in business bankruptcy and reorganization. You will get a proper picture of what it might cost to go through a business bankruptcy.

 

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