RadioShack is confused by the mixed signals of a lender who flip-flopped to push the troubled retailer into bankruptcy, the New York Times reported today. Salus Capital — who joined Cerberus Capital Management — now claims RadioShack is in default, though the money-losing retailer yesterday made a public presentation explaining why it was not. Its contention was that it did not borrow money in October from an affiliate, which it is prevented from doing. RadioShack says that since lender Standard General owns less than 10 percent of its voting stock, it does not qualify as such. RadioShack term lenders Cerberus and now Salus on Dec. 2 claimed the company had defaulted, since Standard General qualifies as an affiliate because it owned a greater-than-10-percent company stake. If RadioShack cannot reach a deal with the two lenders, it may need to file for bankruptcy next month.
