Salus Capital complaint urges cap on credit bid for RadioShack

Reuters News
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Posted: Mar 18, 2015 7:02 PM

SAN FRANCISCO (Reuters) - Salus Capital LLC filed an adversary complaint on Wednesday in RadioShack Corp's Chapter 11 bankruptcy that seeks to hold credit bidding in the electronic retailer's upcoming auction to $111 million.

RadioShack won bankruptcy court approval last month to auction about 2,000 of its stores with an initial $200 million bid from Standard General hedge fund, which will keep about half of the stores open and operate them under an agreement with Sprint Corp.

Credit bidding allows a creditor to use the debt it is owed as currency during a bankruptcy auction sale. It is unclear how much of its credit Standard General plans to use in its bid at the March 23 auction.              

RadioShack owes Salus, a middle-market lender and subsidiary of Harbinger Group Inc, and Cerberus Capital Management $250 million for a loan.

Salus and RadioShack declined to comment on the filing. Standard General was not immediately available for comment.

The case is In re: RadioShack Corp, et al., Case No. 15-10197 in U.S. Bankruptcy Court for the District of Delaware

(Reporting by Jim Christie; Editing by Chris Reese)