Shelby Banking Bill Advances in Face of Democratic Opposition
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FTC Presses Courts to Protect RadioShack Customers' Data
The Federal Trade Commission (FTC) is urging the courts to secure tens of millions of consumers’ personal data as RadioShack goes through bankruptcy, The Hill reported yesterday. The FTC yesterday recommended that Standard General, which purchased the electronics retailer, be bound to the terms that were in place when consumers initially handed over their data. After RadioShack filed for bankruptcy earlier this year, it put up a number of assets up for auction, including lists of names, home addresses, email addresses and purchase histories. Standard General was the top bidder for the assets, which included 1,743 RadioShack stores in addition to the company’s trove of consumer data. Approval from a bankruptcy court is required to finalize the deal, and a hearing is set for later this week.
Judge Approves $7 Million Sale of Fresh Produce Retail Chain
The roughly $7 million sale of the Fresh Produce retail chain, which sells vacation-inspired clothing to women, got approval from a bankruptcy judge, the Wall Street Journal reported today. Bankruptcy Judge Michael Romero on Tuesday approved the chain’s sale to an investor group that includes Fresh Produce’s existing owners, Thom and Mary Ellen Vernon. The deal is expected to keep more than half of Fresh Produce’s 27 stores open. The retailer targets both tourists and “non-tourist customers for whom a ‘vacation state of mind’ resonates,” Chief Financial Officer Jo Stone said in earlier documents filed in in U.S. Bankruptcy Court in Denver. The Boulder, Colo., chain filed for chapter 11 protection on April 4, blaming an “aggressive overexpansion” and high turnover in key positions.
Standard General Makes Top Offer for RadioShack Name, Customer Data
The auction for bankrupt electronic retailer RadioShack's brand and customer data has closed with the Standard General hedge fund posting a winning bid of $26.2 million after objections piled up to their sale, Reuters reported yesterday. Standard General affiliate General Wireless, which had already bought more than 1,700 RadioShack stores, on Tuesday won the auction with the offer, well over its initial bid of $15 million on Monday, Adrienne Walker, a lawyer with Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, said yesterday. Walker had been tracking the sale for a group of RadioShack's U.S. independent dealers and franchisees. They had objected to the sale over concerns about whether they could continue to use the RadioShack trademark and whether a buyer of the customer data will be subject to their privacy policies.
In Auction for RadioShack Name, Bid Stands at $15 Million
The auction for bankrupt electronic retailer RadioShack's name and customer data will resume on Tuesday with bidding at $15 million, Reuters reported yesterday. The high bidder is an affiliate of the Standard General hedge fund, which acquired 1,740 RadioShack stores in April, according to Adrienne Walker of Mintz, Levin, Cohn, Ferris, Glovsky and Popeo. Walker represents a group of RadioShack's U.S. independent dealers and franchisees. They have objected to the sale over concerns about whether they could continue to use the RadioShack trademark and whether a buyer of the company's customer data will be subject to their privacy policies. The sale of RadioShack's customer data has also raised concerns about privacy, and Texas Attorney General Ken Paxton's office has objected to the sale of personally identifiable information.
Fresh Produce Buyer Plans to Save More Than Half of Stores
Women’s clothing retailer Fresh Produce has found a buyer who promised to keep more than half of its 27 stores alive, the Wall Street Journal reported today. Fresh Produce officials said in court papers that an entity called Blue Stripe LLC is preparing to buy all but 12 stores out of bankruptcy protection. Blue Stripe beat other offers at an auction on Friday for the Fresh Produce stores and online clothing line, which targets both tourists and “non-tourist customers for whom a ‘vacation state of mind’ resonates,” said Chief Financial Officer Jo Stone in earlier documents filed in in U.S. Bankruptcy Court in Denver. The Boulder, Colo., chain filed for chapter 11 protection on April 4, blaming an “aggressive overexpansion” and high turnover in key positions.
RadioShack Name Going on the Block Today
The RadioShack trademark and other intellectual property of the electronics retailing pioneer is going up for auction today as efforts to pay creditors continue, the Wall Street Journal reported on Saturday. Carrying more than $1 billion in debt, RadioShack filed for Chapter 11 bankruptcy in February and scrambled to shut down or sell off stores. With most of its 4,000 stores sold to new operators or vacant, RadioShack is selling its warehouses and other assets. Paying close attention to the auction is Standard General LP, the hedge fund that saved more than 1,700 RadioShack stores from closing and launched a revival in an alliance with Sprint Corp. Standard General said it would make an offer on the name and some of the other assets, but signaled it is ready to move on without the iconic brand if the price gets too high. Salus Capital Partners, which sits behind Standard General in the rankings of RadioShack lenders, has $150 million tied up in the bankruptcy and a prime claim on the name and other intellectual property. Auction rules gave Salus until Friday to say whether it is going to “credit-bid” on the intellectual property, meaning it would cancel some of the debt RadioShack owes. Read more. (Subscription required.)
For further analysis of credit-bidding in bankruptcy, be sure to pick up ABI’s newest title, Credit-Bidding in Bankruptcy Sales: A Guide for Lenders, Creditors, and Distressed-Debt Investors, in the ABI Bookstore.
HRG Still Paying for RadioShack Failure With Two Units on Hook
HRG Group Inc., the holding company formerly known as Harbinger Group Inc., is still paying for the collapse of RadioShack Corp. as it seeks to recover from losses on loans two units made to the retailer before its bankruptcy filing, Bloomberg News reported today. Fidelity & Guaranty Life said on Wednesday that its participation in a $250 million loan to RadioShack arranged by HRG-owned Salus Capital Partners contributed to a $32 million impairment charge that wiped out its first-quarter profit. Harbinger bought FGL in 2011 under former Chairman Philip Falcone, then sold a stake of about 19 percent in an initial public offering in 2013. HRG said in a statement it’s considering the sale of the remaining stake. It’s also reviewing options for Salus that include a sale of the firm after the lender suffered losses linked to the RadioShack loan.
Cache Creditors Reach Accord with Lender
Cache Inc.'s unsecured creditors dropped a bid to force the liquidating women's retailer into a chapter 7 bankruptcy after reaching concessions with the company and its secured lender, Salus Capital Partners, Dow Jones Daily Bankruptcy Review reported today. Through a deal reached just minutes before a court hearing yesterday, Salus has agreed to set aside $800,000 from what otherwise would have been its cash collateral to help pay creditors. The money will fund stub rent claims owed to Cache's now-former landlords as well as pay suppliers for goods delivered in the 20 days prior to Cache's bankruptcy filing.
Fredericks of Hollywood Can Move Ahead with Authentic Bid
Frederick’s of Hollywood Inc. received bankruptcy-court approval Wednesday to move forward with a $22.5 million offer that would keep the iconic brand alive, the Wall Street Journal reported today. A bankruptcy judge signed off on the company’s proposed protections for the offer from Authentic Brands Group Inc., which will be tested at auction on May 28 should competing offers emerge. Bankruptcy Judge Kevin Gross said at a hearing yesterday that the bid rules proposed by Frederick’s are “perfectly adequate” and “possibly in a form that would create some competitive bidding.” The offer from Authentic Brands is for Frederick’s intellectual property, some inventory and its e-commerce business, since the company entered bankruptcy having shut down its remaining store locations. The protections for that bid include a $775,000 termination fee, negotiated down from $850,000 with the committee representing unsecured creditors, and $300,000 in expense reimbursement.