RadioShack store operator General Wireless files for Chapter 11

New York, March 9 – General Wireless Operations Inc., which does business as RadioShack, filed for Chapter 11 in the U.S. Bankruptcy Court for the District of Delaware on Wednesday, two years after it previously exited from bankruptcy.

The company said in a news release that it plans to close approximately 200 stores and is evaluating options for the remaining 1,300.

“Since emerging from bankruptcy two years ago as a privately owned company, our team has made progress in stabilizing operations and achieving profitability in the retail business, while our partner Sprint managed the mobility business,” said Dene Rogers, RadioShack’s president and chief executive officer.

He said operating expenses were cut 23% in 2016 and the company made a number of innovations.

“However, for a number of reasons, most notably the surprisingly poor performance of mobility sales, especially over recent months, we have concluded that the Chapter 11 process represents the best path forward for the company,” he added.

In a motion requesting court approval to close stores and liquidate inventory, General Wireless asked for authority to close as many as 530 stores.

It said it plans to close 187 by March 13 and either close or transfer to Sprint a further 365 stores by March 31. These transactions would leave 1,000 stores to be evaluated.

In the previous Chapter 11 case, RadioShack hired Hilco Merchant Resources, LLC, Gordon Brothers Retail Partners, LLC and Tiger Capital Group, LLC to supervise and assist with store closing sales. Based on the experience gained in that process, the company plans to conduct the store closing sales itself this time around, with Tiger Capital to be hired as a liquidation consultant.

The company’s legal advisers are Pepper Hamilton LLP and Jones Day.

General Wireless listed $100 million to $500 million of both assets and liabilities in its filing.

Among unsecured creditors, Sprint Prepaid is listed first with an unliquidated claim for an unspecified amount. The other top 10 unsecured creditors are Brightstar US Inc. of Libertyville, Ill., with a disputed claim of $5.57 million, ION America of Moorestown, N.J., with a disputed claim of $3.01 million, Weide Electronics Co., Ltd. of Huizhou, China, with a trade claim of $1.79 million, Ideavillage Products Corp. of Wayne, N.J., with a trade claim of $1.60 million, National Distribution Inc. of Brooklyn, N.Y., with a disputed trade claim of $1.56 million, Expona Global Sourcing LLC of Southlake, Texas, with a disputed claim of $1.50 million, Standard General of New York with a loan of $1.48 million, Spectrum Brands of St. Louis, Mo., with a trade claim of $1.42 million and Federal Express of Memphis, Tenn., with a trade claim of $1.26 million.

The Chapter 11 case number is 17-10506.

General Wireless is a Fort Worth, Texas-based operator of neighborhood electronics convenience stores.

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