RadioShack lender readies new bid as bankruptcy hearing drags on

A lender who lost an auction this week for RadioShack’s assets plans to submit a new bid as a Bankruptcy Court hearing on the fate of the electronics retailer drags on.

An attorney for Salus Capital Partners, one of Fort Worth-based RadioShack’s largest creditors, said Friday that it will present a new bid when the hearing resumes Monday and is willing to discuss it with other creditors over the weekend.

Salus says this bid will be significantly better than its initial $271 million offer, which was contingent on future litigation results and was rejected.

RadioShack chose a bid from hedge fund Standard General, one of its top shareholders, that consists mostly of credit on debt rather than cash but would keep 1,743 stores open and preserve about 7,500 jobs.

Salus called the auction a sham and asked U.S. Bankruptcy Judge Brendan Shannon to reject the result and reopen the bidding.

RadioShack, backed by other creditors, defended the auction and argued that Salus missed its chance to outbid Standard General.

Stephen Coulombe, a RadioShack financial adviser, told the court that he talked to a Salus representative during a pause in the bidding Wednesday as the company prepared to move the auction from New York to Wilmington.

“I asked if they were going to attend by phone or in person, and he said he wasn’t sure,” Coulombe said in court.

Any sale requires the court’s approval. Shannon began hearing testimony on the proposed sale to Standard General on Thursday, and Anthony Clark, an attorney for Salus, raised the prospect of a new bid at the end of Friday’s seven-hour session.

Both sides have called witnesses to discuss the various bids and the value of RadioShack’s name and other intellectual property, such as patents and Internet-related properties.

The intellectual property, including the name, will be auctioned separately and might raise up to $22 million more for creditors, Coulombe said.

A witness for Salus claimed that the name alone is worth $22 million and that the patents might fetch millions more.

RadioShack filed for bankruptcy in early February after nearly three years of losses and declining sales. Since filing, the company has closed at least 1,400 of its 4,000 U.S. stores.

In a separate sale, Gigante’s Office Depot de Mexico has agreed to buy RadioShack’s 251 stores in Mexico for $31.8 million.

This report includes material from The Associated Press and Bloomberg News.

This story was originally published March 27, 2015 at 4:32 PM with the headline "RadioShack lender readies new bid as bankruptcy hearing drags on."