Judge OKs sale of RadioShack name, data to Standard General
RadioShack won court approval to sell data on about 67 million customers in a $26.2 million deal for assets that also includes the bankrupt electronics retailer’s name.
In Wilmington, Del., U.S. Bankruptcy Judge Brendan Shannon approved the sale to hedge fund Standard General on Wednesday after almost 40 states, led by Texas, reached an agreement with the chain and the buyer to limit the use of the shopper data.
The states had expressed concern about how Standard General might use the information. The hedge fund has also taken over more than 1,700 RadioShack locations with a plan to run them in a co-branding arrangement with Sprint. The rest of the company’s 4,000 locations are being closed.
The agreement was reached May 14 and announced in court Wednesday. At least 50 million customer files will be destroyed, according to a statement from New York Attorney General Eric Schneiderman. The new owner won’t have access to credit card data, Social Security numbers, birth dates or phone numbers.
Standard General can keep email addresses supplied by customers seeking product information in the past two years, but people can opt out before that information is transferred to the new owner. Standard General won’t be allowed to share any of the data, including with Sprint.
According to Reuters, RadioShack and several attorneys general held a nine-hour mediation last week in Dallas on the treatment of customer data.
“This settlement is a victory for consumer privacy nationwide,” Texas Attorney General Ken Paxton said in a statement. “The fact that 38 states joined together in this case reflects a growing understanding of the importance of safeguarding customer information.”
The asset sale was approved over the objection of Wonderland Investment Group, which wanted the auction reopened so it could submit a $30 million bid. Wonderland said the approved bidding procedures didn’t provide for a change from incremental bidding to sealed bids.
But Shannon said he had no proper grounds to reopen the bidding, even if it would result in millions more for RadioShack creditors.
“The switch to sealed bids, I believe, was permissible,” Shannon said, citing language in the procedures order that allowed RadioShack, after consulting with interested parties, to adopt appropriate auction rules.
Fort Worth-based RadioShack, founded in 1921, is being dismantled in bankruptcy after struggling to compete with big-box retailers and online merchants.
Besides its name and the stores that Standard General bought, the company has also sold leases and non-U.S. intellectual property. RadioShack lawyers said Wednesday that opening bidders are in place for real estate that goes on the block June 11.
This report includes material from The Associated Press.
This story was originally published May 21, 2015 at 11:23 AM with the headline "Judge OKs sale of RadioShack name, data to Standard General."