From Reuters, Feb. 18:
Unsecured creditors of RadioShack Corp said the electronics retailer timed its bankruptcy to benefit a hedge fund trading strategy even though it cost the company millions of dollars in added losses, according to a court filing.
A committee of the company's landlords, suppliers and bondholders asked the U.S. Bankruptcy Court in Wilmington, Delaware for subpoena power to investigate their suspicions.
They want access to nonpublic information they say could confirm that RadioShack's bankruptcy was an "assisted suicide" led by its largest shareholders, the Standard General hedge fund and LiteSpeed Management.
"The problem is, there’s no suicide note, and there are too many unanswered questions," said the filing by the RadioShack's official committee of unsecured creditors, who will only get paid after more senior creditors are paid in full.
RadioShack filed for Chapter 11 bankruptcy this month. It plans to close 1,700 stores this month and sell 2,400 stores to Standard General, which is also the chain's leading lender.
The unsecured creditors said RadioShack should have filed for bankruptcy in May, when it first planned to close more than 1,000 unprofitable stores. That plan was blocked by lenders, and the chain continued to pile up $1 million a day in losses....MORE
This recollection was, like the Eno piece, brought to you by aide-mémoire maestro David Keohane who had linked to Matt Levine's take on things: Not Everyone Is Happy That RadioShack Ran on Derivatives.
