RadioShack creditors want to quiz executives, directors

RadioShack’s creditors’ committee wants permission to investigate the retailer’s finances in a bid to find assets and “expose any conduct” that may lead to claims in its bankruptcy case, according to a court filing.

The committee, which represents more than $500 million of unpaid claims owed creditors, bondholders, landlords and employees, is seeking authorization to request copies of documents, electronically-stored information and other items, in addition to deposing some executives.

Lawyers for the committee said Tuesday they want to examine possible breaches of fiduciary duty by company directors in light of “puzzling decisions that flew in the face of their earlier disinterested business decisions.” Those moves “benefited” Standard General, LiteSpeed Management and other firms, the lawyers said.

Fort Worth-based RadioShack listed assets of $1.2 billion and debt of $1.38 billion when it filed for bankruptcy in Wilmington, Del., on Feb. 5. The company announced a plan to sell 1,500 to 2,400 stores to Standard General, a New York hedge fund that was also one of its top shareholders, and a deal for Sprint to set up shop in as many as 1,750 locations.

The seven-member creditors committee for bankrupt consumer-electronics retailer RadioShack includes landlords Simon Property Group and General Growth Properties, AT&T and Wilmington Trust.

Lawyers for the committee seek to question current and former officers and directors at RadioShack, Standard General, LiteSpeed and other companies, according to the filing.

RadioShack filed for bankruptcy after posting losses for 11 straight quarters and losing sales to traditional and online rivals. In the past two years, CEO Joseph Magnacca attempted a turnaround by revamping store designs and product lineups, but was unable to reverse the slide.

The company is looking to close as many as 2,100 of its 4,000 company-owned stores and has already begun shuttering locations. A Tuesday hearing on procedures for selling store leases that aren’t being bought by Standard General was moved to Wednesday after a snowstorm shut down the courthouse in Delaware.

This story was originally published February 17, 2015 at 5:23 PM with the headline "RadioShack creditors want to quiz executives, directors."