Sprint Corp. “abandoned” RadioShack and “destroyed” the struggling electronics chain’s attempt to turn profitable after its last bankruptcy, leading to thousands of lost jobs, according to a lawsuit filed this week by RadioShack’s creditors.
The suit, filed in Delaware Superior Court, alleges that Sprint’s breach of contract with RadioShack’s parent, General Wireless, forced the electronics retailer into bankruptcy for a second time this spring. The unsecured creditors committee is seeking $500 million in damages from Sprint.
“Sprint’s actions destroyed nearly 6,000 RadioShack jobs,” the lawsuit says. “As RadioShack struggled, Sprint employees in charge of the RadioShack relationship who had access to highly confidential RadioShack store-level data and store-lease information then preyed on the RadioShack business by misappropriating General Wireless’s confidential information to benefit Sprint and a separate Sprint marketing partner.”
General Wireless joined with Sprint in 2015 to bring RadioShack out of bankruptcy with 1,700 stores, including more than 1,000 co-branded locations with large displays of Sprint wireless products. The lawsuit alleges that Sprint failed to create the RadioShack “store-within-a-store” at the majority of its Sprint stores and that Sprint employees working in RadioShack stores sent customers to Sprint corporate stores to purchase phones and sign up for wireless service.
Sprint disputes the allegations in the lawsuit.
“We’re disappointed the creditors’ committee took this action, and we expect to defend the matter vigorously,” Sprint said in a statement.
General Wireless filed for bankruptcy protection in March after its partnership with Sprint failed to boost revenues. The nearly century-old company now appears to be winding down, having already closed more than 1,500 stores, leaving it with fewer than 70 corporate stores and 500 dealer stores.
RadioShack’s last store in North Texas, located in Weatherford, is scheduled to close June 30. The company is also auctioning off memorabilia as part of its bankruptcy proceedings.
This week, the bankruptcy court also approved a new lease for RadioShack with Tarrant County College for office space at the riverfront campus in downtown Fort Worth.
Under the new lease, General Wireless will occupy only 4,000 square feet at TCC Trinity campus, down from 72,984 square feet. RadioShack built the riverfront complex as its new corporate headquarters in 2005 and quickly sold it to investors and leased back space. But by 2008, RadioShack was starting to downsize and TCC bought the complex to expand downtown.