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The former RadioShack tripped over a major hurdle on Friday, when a bankruptcy judge ruled the distressed former electronics retailer owes the Internal Revenue Service at least $72 million and possibly more in interest and penalties, Dow Jones Daily Bankruptcy Review reported today. Bankruptcy Judge Brendan Shannon had urged the former RadioShack and the IRS to resolve the tax dispute consensually, but negotiations ultimately came to an impasse. The former RadioShack, already short on cash, must now find a way to satisfy the IRS's priority claim before its chapter 11 plan goes before Judge Shannon for final approval next week.

Standard General LP, the hedge fund that salvaged much of RadioShack 's business in a bankruptcy buyout earlier this year, is leading a list of objectors trying to block the chapter 11 plan that sets out how the former company will wrap up its final affairs, Dow Jones Daily Bankruptcy Review reported today. In court papers filed on Wednesday with the U.S. Bankruptcy Court in Wilmington, Del., Standard General, which bought the RadioShack name to use in its revival and saved more than 1,700 stores from liquidation, said the money the distressed electronic retailer has set aside to cover its final obligations is "woefully inadequate." Those obligations, Standard General says, include litigation-related expenses linked to the loans the hedge fund and other lenders made last October. Wells Fargo & Co., another lender, also objected to the plan on Wednesday.

Another entity controlled by Ray’s the Steaks’ Michael Landrum is seeking chapter 11 petition, this one in Virginia, the Washington (D.C.) Business Journal reported today. MLRG Inc., which lists Landrum as its president, filed the petition in U.S. Bankruptcy Court for the Eastern District of Virginia on Sept. 2. The petition lists assets of between $1 million and $10 million and debts of the same. Another of Landrum’s entities, 449 K St LLC, filed for chapter 11 protection Aug. 27. That filing came amid a lengthy battle with the landlord of a building where Ray’s Hell Burger, Landrum's famous burger restaurant, was supposed to open in Mount Vernon Triangle. That bankruptcy filing lists MLRG as a creditor owed $1.5 million.

Struggling surfwear maker Quiksilver Inc. said that it filed for chapter 11 protection for its U.S. units yesterday, Reuters reported. The company listed assets of more than $100 million and liabilities of more than $500 million in the filing. The European and Asia-Pacific businesses are not part of the filing as those "operations remain strong," Quiksilver said. Quiksilver added that holders of its Eurobonds, sufficient to waive any technical default arising from the filing, had agreed to allow it to reorganize its U.S. operations under chapter 11. The company said that it had requested the court to approve $175 million in new debtor-in-possession financing with affiliates of private equity firm Oaktree Capital Management and Bank of America.

Hilo Hattie, a popular chain for Hawaii’s tourists in search of souvenirs, laid out a plan to get out of bankruptcy and repay some of its debts after selling its most valuable location for $5.1 million earlier this year, the Wall Street Journal Bankruptcy Beat blog reported yesterday. In court papers, Hilo Hattie lawyers proposed to use the sale money to repay a portion of the company’s debts, including a $360,000 chunk of sale money that would flow to unsecured creditors who are owed more than $3 million. The plan projects that the 52-worker chain, which has downsized from seven to three locations, will start seeing sales grow starting next year. By 2020, the chain expects to take in about $7.5 million from the sale of its travel trinkets, Hawaiian floral-printed shirts and other inventory, according to documents filed in U.S. Bankruptcy Court in Honolulu.

Quiksilver Inc., the surfwear chain that has lost more than three-quarters of its value this year, is looking for a buyer that could help keep the company afloat, Bloomberg News reported yesterday. Quiksilver has been holding discussions with potential strategic bidders with the goal of a management-led buyout that would let the company retain its stores. The Huntington Beach, Calif.-based chain replaced its top executives in March after the company had to restate earnings and projected disappointing sales. In June, Quiksilver scrapped its annual earnings forecast, saying that a rebound would take longer than expected.

Just more than a year since his 11th-hour move to resurrect Crumbs Bake Shop Inc., investor and television personality Marcus Lemonis announced that he’s selling his stake in the bakery, the Wall Street Journal reported today. Fischer Enterprises LLC, which owns Dippin’ Dots and which currently holds the majority stake in the business, has purchased his piece of the company, Lemonis said yesterday. The investor and television personality added that he’s taking a “sizable loss” in the deal that was brokered during Crumbs’ bankruptcy case last year but didn’t name a purchase price. Lemonis said that he made the decision to sell after realizing that he had underestimated his opportunities to grow the business as a minority owner of the company. Although the deal does means that Lemonis won’t have any involvement in the company going forward, he is retaining the rights to the Crumbs name for cookies, ice cream and candy products.

Bankruptcy Judge Robert Drain yesterday said Great Atlantic & Pacific Tea Co. could make changes to its collective-bargaining agreements with union employees as the supermarket chain braces for its first swath of store closings, but he noted that some of the requested provisions must be changed to be more employee-friendly, Dow Jones Daily Bankruptcy Review reported today. Judge Drain approved the company's request to avoid so-called bumping provisions that allow employees in closing stores to take jobs of more junior employees at other locations, but he ordered A&P to increase the amount of severance money it immediately pays to workers being let go. An A&P lawyer said that the company had reached a compromise on the bumping provisions with the United Food and Commercial Workers International Local 1776, which represents 1,078 A&P employees, but not ones representing the company's other 27,400 or so workers. That deal allows a one-time move where senior workers in some of the 25 closing stores can take the jobs of junior employees at locations that remain open. The store closures are set to begin later this week.

RadioShack Corp., the iconic consumer electronics chain, was driven into bankruptcy because of a takeover scheme by hedge fund Standard General LP, according to a lawsuit by a committee for creditors who say they are owed more than $500 million, Bloomberg News reported yesterday. By delaying actions that might have preserved some of the chain’s value, Standard General allegedly sought to take over RadioShack at the lowest price possible. The creditors say that turmoil at the company last year, including an October loan transaction that paved the way for the hedge fund to win control, led to RadioShack’s February bankruptcy. The lawsuit targets Standard General, its principal investment officer, company lender Wells Fargo Bank and RadioShack’s former top managers, including Joseph Magnacca, the former chief executive.

A proposed multi-state settlement that could help consumers who bought RadioShack gift cards get their money back is awaiting bankruptcy court approval, according to the Pennsylvania Attorney General's Office, PennLive.com reported yesterday. The proposed settlement, which the office says is supported by attorneys general from at least five other states, would apply to consumers nationwide, and would not impose any minimum dollar threshold for consumer claims related to unredeemed gift cards. The settlement would give priority status to claims in RadioShack’s bankruptcy case related to gift cards purchased by consumers.