A US bankruptcy court has approved a plan to save RadioShack’s remaining retail stores.
RadioShack, founded in 1921 to serve the then emerging radio equipment market, filed for Chapter 11 bankruptcy in February. But some RadioShack stores will survive after the company was bought by hedge fund Standard General. In keeping the stores open, Standard is sharing store space with wireless carrier Sprint. As reported by Reuters, the stores will carry both the Radio Shack and Sprint names, and Sprint will occupy about a third of each store.
The deal came Tuesday amidst protests from lenders that could have killed RadioShack’s chances for survival. Reuters explains that RadioShack was forced to finalize a deal by April because Chapter 11 give companies only a few months to break leases, which is critical for retailers. Only about 1,740 of RadioShack’s more than 4,000 stores have survived the bankruptcy. But the new deal is expected to save as many as 7,500 RadioStack jobs still in place.
According to Reuters, RadioShack’s largest lender, Salus Capital Partners, opposed the Standard General deal, claiming that it had made a more lucrative bid for the retailer’s assets. Judge Brendan Shannon, who decided the case, disagreed. Although the Salus bid may have offered more cash, Shannon determined that Standard General’s bid, which included significant debt forgiveness, was superior.
Amazon was reportedly in talks to buy some of RadioShack’s stores last year, but if true, the talks didn’t result in any acquisitions.