The hedge fund that bought about 1,740 RadioShack stores in March has won the right to continue using the bankrupt 94-year-old retailer’s name.
Standard General said Wednesday that it prevailed in an auction held this week at a law office in New York for the chain’s brand name, a trove of customer data and other intellectual property with a bid of $26.2 million.
Any transaction is subject to approval by the Wilmington, Del., court where the bankruptcy was filed in February. A sale approval hearing for the name is set for May 20.
Fort Worth-based RadioShack entered bankruptcy after three years of declining sales and losses as it struggled to compete with big-box retailers and online merchants. It has since pursued a plan to have a Standard General affiliate take over hundreds of stores in a co-branding arrangement with Sprint.
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Standard General won the store auction in March with a bid of about $145.5 million. The rest of the chain’s 4,000 locations have closed.
RadioShack has also sold operations in Mexico and trademarks for the Middle East and South and Central America. Real estate, including three distribution centers, will be auctioned June 11.
The proposed sale of customer information that the chain has collected over the years drew objections from 37 state attorneys general, including Ken Paxton in Texas, who expressed concern about how a potential buyer might use the data and exactly what information was being sold.
RadioShack and Standard General will mediate with the states to resolve their concerns. That process is set to begin Thursday before Leif M. Clark, a retired U.S. bankruptcy judge in Texas.
“The firm has been working with the state attorneys general to ensure that the customer data is protected,” Standard General said in an emailed statement.
RadioShack said this month that the information it was selling included 8.5 million email addresses, 67 million complete customer name and physical address files, and certain transaction data. It wasn’t selling credit or debit card numbers.
The company also said that the databases contain no sensitive information and that any references to wireless carriers and specific mobile products will be eliminated.
Standard General said it has committed to maintaining RadioShack’s strict privacy policies, which prohibit the sale of customer data. The firm also noted how competitive the auction was, which it said boosted its confidence in the value of the RadioShack brand.
Reuters reported this week that the initial bid was $15 million.