WILMINGTON, Delaware (Reuters) - Bankrupt electronics retailer RadioShack Corp got court approval on Monday to borrow $10 million to support its operations until it opens the bidding this month for its best-performing stores.
RadioShack, which filed for Chapter 11 bankruptcy last week, has an initial deal to sell as many as 2,400 of its 4,100 stores to an affiliate of hedge fund Standard General, one of the lenders and its largest shareholder. But that agreement is subject to higher bids.
Lawyers for RadioShack and creditors worked on Monday to modify the terms of the interim bankruptcy loan, which was originally proposed at $14 million. Some creditors had objected to the terms, saying they would lock RadioShack into a rushed sale to Standard General, which is also providing a portion of the bankruptcy loan.
U.S. Bankruptcy Judge Brendan Shannon in Wilmington, Delaware approved the interim financing and set a Feb. 20 hearing to consider RadioShack’s request for approval to borrow up to $285 million.
At the same hearing later this month the company will ask Shannon to approve procedures for bidding on RadioShack’s assets. The company is in the process of closing around 1,100 stores that it was unable to shut outside bankruptcy due to disagreements with lenders.
RadioShack posted 11 straight quarterly losses after failing to transform itself into a destination for mobile phone buyers.
Standard General has said it is working with Sprint Corp to open mobile phone sales centers in at least 1,750 of the RadioShack stores it plans to acquire. The sale agreement with Standard General will be subject to higher bids, and RadioShack’s lawyers have said the company will even consider proposals from liquidators.
The case is In Re RadioShack Corp, U.S. Bankruptcy Court, District of Delaware, No. 15-10197.
Reporting by Tom Hals; Editing by Richard Chang