WILMINGTON, Del (Reuters) - A lender to bankrupt RadioShack Corp RSHCQ.PK told a U.S. judge on Friday it was prepared to present a new offer that was a “significant improvement” over a rival proposal that was selected as a winning bidder at an auction this week.
Anthony Clark, an attorney for Salus Capital Partners, said the lender was working on the bid and called it “a significant improvement over anything in front of the court right now.”
Clark’s announcement came at the end of two days of hearings to consider the sale of the company to Standard General, a hedge fund.
RadioShack’s advisers declared that Standard General had outbid Salus, RadioShack’s largest creditor, at a four-day auction that concluded Thursday morning. Salus has challenged that, arguing its bid included $271 million in cash, compared with just $16 million offered by Standard General.
The hedge fund’s proposal also included $112 million of debt forgiveness.
However, Standard General’s bid would save 7,500 jobs by keeping 1,740 RadioShack stores open, most of them in conjunction with wireless phone company Sprint Corp. (S.N) Salus planned to liquidate RadioShack by selling everything from inventory to fixtures.
“People are working on the bid right now,” Clark said.
He said Salus’ team was benefiting from two days of witness testimony about the auction and the way bids had been valued.
He also said Salus’ team would be available all weekend to meet and discuss the proposal with other parties.
The court will resume the hearing to consider the sale to Standard General on Monday. Salus has urged U.S. Bankruptcy Judge Brendan Shannon to block the sale to Standard General, calling the process a sham.
RadioShack entered Chapter 11 bankruptcy in February with more than 4,000 stores, most of which have been closed.
Founded in 1921, the chain was once the go-to retailer for electronics, but became increasingly irrelevant in the digital age.
The case is In Re: RadioShack Corp, U.S. Bankruptcy Court, District of Delaware, No. 15-10197
Reporting by Tom Hals in Wilmington, Delaware; Editing by Richard Chang and Dan Grebler