[GreenKeys] OT: Radio Shack RIP

[Don Robert House K9TTY]

RadioShack, after years of puzzling bottom-seeking stock investors on
how it managed to stay in business, filed for bankruptcy on Thursday
evening. The retailer, best known to consumers in recent years as a
trusty seller of easy to lose cords, chargers and tech accessories,
also announced a deal to sell between 1,500 and 2,400 stores to a
consortium including Standard General and Sprint while in
restructuring.

The bankruptcy filing ends a surprisingly long run for RadioShack.
While some electronics competitors such as Circuit City and Nobody
Beats The Wiz died years ago, the Ft. Worth, Tx.-based company
withstood the internet age, the rise of Apple AAPL -0.84% and
consumers’ transition to wireless devices mostly by selling cords,
esoteric technological parts, battery packs and adapters.

Founded 94 years ago by Theodore and Milton Deutschmann in a
storefront in Boston, RadioShack rose to glory with the mass adoption
of the radio and the rise of electronics.  In 1962, the company was 
acquired by Tandy Corporation, a New York Stock Exchange-listed 
Texas-based leather goods firm that was seeking to diversify and in
2000, the company changed its ticker to ‘RSH’.

The retailer sold its first mobile phone in 1984 and eventually
peddled over 73 million cellular phones over a span of decades. The
company also became a top seller of the walkmen, CD Players, mini
disk players and beepers that preceded, but were made obsolete by the
smartphone, in addition to do-it-yourself devices such as satellites
dishes. As with Best Buy BBY +3.52% and Circuit City, RadioShack
suffered from the rise of e-commerce, but it survived as a declining
and niche electronics business for years.

Ultimately, changing technology and consumer habits proved too much
to overcome. The company filed with $1.2 billion in assets and $1.38
billion in liabilities in a Delaware court Thursday, listing between
50,000 and 100,000 creditors. Wilmington Trust Company, owned by M&T
Bank MTB +1.83%, is acting as a trustee representing unsecured
creditors with $329 million in claims listed against RadioShack.
Sprint holds a $6 million claim, the filing shows.

There will be life, of sorts, after bankruptcy. Standard General, a
private equity fund said on Thursday it reached a deal to acquire up
to 2,400 RadioShack stores and will work with Sprint to create 1,750
store-within-a store concepts nationwide.

Standard General also filed a motion to close RadioShack’s remaining
company-owned stores under an agreement with Hilco Merchant
Resources. Currently, RadioShack currently has approximately 4,000
company owned stores in the U.S., and over 1,000 dealer franchise
stores in 25 countries.

RadioShack stores operated by its Mexican subsidiary, and its Asia
operations are not a part of the company’s Chapter 11 filing.

“These steps are the culmination of a thorough process intended to
drive maximum value for our stakeholders,” Joe Magnacca, RadioShack’s
CEO said in a statement and added discussions are underway to sell
the company’s remaining assets.

As part of its bankruptcy filing, RadioShack said its secured a $285
million in debtor-in-possession financing commitment from its current
asset-backed lenders group, which includes DW Partners.

RadioShack is working with legal advisor Jones Day, investment bank
Lazard Freres, and financial advisors The MAEVA Group and FTI.
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