The second bankruptcy in two years involving RadioShack has been filed by its parent company, General Wireless Operations. Approximately 1500 stores are at risk of being closed with the latest update stating 552 stores will be closed (two in Alabama are on the closure list and those locations are in Madison and Mobile). The fate of more than 1000 stores is still up in the air. One bright note is that 400 independently owned dealers will remain open. As an aside and being an avid cyclist, I remember RadioShack sponsoring the professional cycling team which featured Lance Armstrong when he made his comeback in 2009. He then retired again in late 2010 after the Tour de France in amid doping allegations which he later confirmed. Not sure that RadioShack got the benefit of that sponsorship as it filed for its first bankruptcy just a few years later in 2015.
RadioShack’s chief executive officer stated that, “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. “We will continue to work with our advisors and stakeholders to preserve as many jobs as possible while maximizing value for our creditors.” I would also like to point out that several hundred RadioShack stores have a Sprint store within. It is unclear what, if any, effect this may have on Sprint. It is being reported that closing stores that have Sprint locations within will be converted into Sprint-branded stores.
RadioShack filed a Chapter 11 case which is a business reorganization and it will attempt to negotiate more favorable terms for repaying its creditors or even lesser amounts. A Chapter 13 is similar because it a reorganization for individual consumers where most all debts are consolidated in to a monthly payment that reduces what a consumer will pay to his creditors each month in comparison to what the consumer is paying creditors individually. It may even reduce interest rates on debts secured by collateral such as a vehicle and may completely stop interest from accumulating on other debts. Further, it may even reduce the balances that must be repaid to certain creditors. Every case is different and therefore it is difficult to give specifics without knowing more information about your specific situation. This second bankruptcy by RadioShack within a short period of time brings up an interesting point concerning chapter 13. Just because a chapter 13 case fails due to unforeseen circumstances, it does not mean you cannot seek protection a second time. A new case may be filed if it is in good faith, feasible, and the issue that caused the previous dismissal has been addressed.
It is reasonable to assume that RadioShack looked at many options and got wise advice from their attorneys before taking this step. You can also tell that Sprint was well prepared in case RadioShack experienced difficulties again. If you are having financial difficulties, facing foreclosure, repossession, collections, lawsuits, and garnishment of wages, the attorneys at Bond and Botes believe you have the right to get wise and trusted advice from attorneys with many years of experience. We have been helping good people through tough times for more than 20 years. The decision to hire an attorney is an extremely important one and should not be based on a fee quoted over the phone. At Bond and Botes, your first consultation is free and will be face to face with an experienced attorney so you will know what options you have.