U.S. judge rules RadioShack IP auction was fair
By Nick Brown
(Reuters) - A U.S. bankruptcy judge on Wednesday cleared the way for RadioShack Corp RSHCQ.PK to sell its brand name and customer data to a Standard General affiliate for about $26 million, rejecting a competing bidder's claim that the auction process was unfair.
Separately, RadioShack resolved objections to the sale from several state attorneys general who were concerned the deal could threaten consumers' privacy.
Those matters were the last major hurdles to the bankrupt electronics chain's plan to sell its intellectual property to General Wireless, the same Standard General affiliate that acquired 1,743 RadioShack stores in March.
China-based Wonderland Investment Group, which competed in the intellectual property auction last week, said RadioShack pulled the plug on incremental bidding during the auction, abruptly telling parties they had 30 minutes to present final bids under seal.
Wonderland, which bid $17.3 million, said it could have beaten General Wireless' $26.2 million offer if the initial guidelines had been followed. It later offered $30 million.
Judge Brendan Shannon, in bankruptcy court in Delaware, said on Wednesday that RadioShack had the right to alter bidding procedures in reliance on its business judgment.
A RadioShack lawyer said the two-day auction had grown tense, and the company felt bidders might walk away if incremental bidding dragged on.
Bankruptcy judges are hard-pressed to reopen auctions - even when they could yield higher bids - in part to discourage bidders from declining to participate and then advancing new bids after the fact, when an asset's value is established. Continued...