Kanye West and Dame Dash may be coming to the rescue of Karmaloop, the online streetwear retailer that recently filed for bankruptcy restructuring, Billboard reported on Friday. The pair announced their intention to buy the company in a series of Instagram posts on Thursday following talks with Karmaloop founder Greg Selkoe. It was announced last week that the 15-year-old Karmaloop would be restructuring after filing for chapter 11 bankruptcy due to debt. In response to rumors of West and Dash's interest, Selkoe confirmed on Tuesday that the three were "talking" and on Thursday tweeted that it was "good speaking" with West. Following concern that he would be leaving the company he told one fan on Twitter that "I am here to stay no matter who we join forces [with]." While the Boston-based company's core business of online retail remains strong, it accumulated a "bunch of debt" from the launching of recent business startups, Selkoe told the Gearbottle website.
A lender to bankrupt RadioShack Corp. told a U.S. judge on Friday it was prepared to present a new offer that was a "significant improvement" over a rival proposal that was selected as a winning bidder at an auction last week, Reuters reported on Friday. Anthony Clark, an attorney for Salus Capital Partners, said the lender was working on the bid and called it "a significant improvement over anything in front of the court right now." Clark's announcement came at the end of two days of hearings to consider the sale of the company to Standard General, a hedge fund. RadioShack's advisers declared that Standard General had outbid Salus, RadioShack's largest creditor, at a four-day auction that concluded on Thursday. Salus has challenged that, arguing that its bid included $271 million in cash, compared with just $16 million offered by Standard General. The hedge fund's proposal also included $112 million of debt forgiveness.
A deal to keep 1,740 RadioShack Corp. stores open hangs in the balance in a Delaware court after its top creditor, a losing bidder in an auction for the bankrupt retailer, called the process a "sham" and demanded a new sale, Reuters reported yesterday. RadioShack, which filed for bankruptcy last month, told a bankruptcy judge that it had selected the Standard General hedge fund as the winning bidder in the private four-day auction, which ended just before a court hearing yesterday. Standard General plans to operate most of the stores in conjunction with wireless phone company Sprint Corp. While RadioShack's attorney told the court the deal saved 7,500 jobs and was $23 million more than a bid by liquidators, the deal included less than $40 million in cash, according to court testimony. The hearing to approve the agreement quickly deteriorated into disputes among lenders over the complex agreements that governed the repayment among creditors. An attorney for Salus Capital Partners, which is owed $150 million and is RadioShack's largest creditor, blasted the auction process and demanded it be reopened. http://www.reuters.com/article/2015/03/26/radioshack-bankruptcy-idUSL2N0WS2O020150326
In related news, personal information gathered by RadioShack Corp. from shoppers is not included in its sale, the consumer privacy ombudsman in the electronics retailer's bankruptcy case said in response to concerns shared by several states that the data could be sold, Reuters reported. If that changes, Elise Frejka also said in a letter on Wednesday to Bankruptcy Judge Brendan L. Shannon that she would file a report with recommendations based on specific facts and circumstances. Her letter came as Oregon and Pennsylvania on Wednesday joined Texas and Tennessee in objecting to RadioShack selling names, email addresses and other personal information gathered from shoppers. Personally identifiable information of 117 million consumers could be made available in RadioShack's proposed sale, Oregon Attorney General Ellen Rosenblum said in a filing that urged stripping out information such as telephone numbers and mailing addresses from assets. In a separate filing, Pennsylvania Attorney General Kathleen Kane said that selling the information would violate parts of her state's Unfair Trade Practices and Consumer Protection Law. Texas Attorney General Ken Paxton last week objected to the sale of personally identifiable information and requested RadioShack's buyer be required to set a separate price for it. http://www.reuters.com/article/2015/03/26/idUSL2N0WS29H20150326
A RadioShack Corp. lender asked a bankruptcy judge to intervene in the auction of the electronics retailer and said it had submitted a bid to liquidate the chain that was "materially superior" to one favored by RadioShack, Reuters reported yesterday. Salus Capital Partners said in a court filing yesterday that it had submitted a bid jointly with three liquidators to offer $271 million in cash at the auction that began on Monday. The lender said, however, that RadioShack favored a proposal from hedge fund Standard General, even though its bid included only $16.4 million in cash. Standard General planned to keep open about 1,740 RadioShack stores, many in conjunction with wireless operator Sprint Corp.
Hedge fund Standard General has raised its bid to buy about 1,740 stores of bankrupt electronics retailer RadioShack Corp. in a court-supervised auction, which entered its second day yesterday, Reuters reported. Standard General, which would operate most of the stores in conjunction with Sprint Corp., increased its initial $145 million bid by at least $20 million, according to one of the sources. It also committed to keeping some 7,500 RadioShack jobs. Liquidators who proposed closing the stores and selling the inventory and fixtures also made a bid. The result of the private auction, taking place at the New York offices of the Jones Day law firm, must be approved by the U.S. Bankruptcy Court in Wilmington, Delaware. A hearing has been scheduled for Thursday at 9:30 a.m.
Karmaloop Inc., an online apparel company, filed for bankruptcy protection, becoming the latest clothing retailer to fall victim to changes in consumer trends, Bloomberg News reported yesterday. The Boston-based company listed assets of more than $10 million and debt of more than $100 million in chapter 11 documents filed yesterday. “The debtors’ businesses have fallen victim to the shift in retail purchasing that is occurring, especially among retailers in the young adult age bracket, as such consumers have moved away from purchasing traditional brands,” Brian L. Davies Jr., the interim chief financial officer, said in court papers. The company will seek court permission to sell assets and named ComCap Acquisition LLC, an affiliate of one or more pre-bankruptcy lenders, as lead bidder at a court supervised auction.
The RadioShack auction moves into a second day today in New York, as the company and its creditors debate the value of the bid from big lender Standard General LP, the Wall Street Journal reported today. Standard General’s takeover proposal would keep the iconic retailer in operation, in trimmed-down form, and estimates are that it’s worth at least $20 million more than a potential counterbid from a joint venture of liquidators. The problem for RadioShack is that Standard General is bidding mostly by offering to cancel loans it made to the company, and creditors have questioned the validity of those loans. What’s hanging up the auction is not a profound legal debate over the fine points of lending to failing companies — it’s timing. Unsecured creditors owed an estimated $500 million have until approximately the second week in April to decide whether they want to sue Standard General to challenge the loans. Given the load of senior debt on the company, those creditors may get little or nothing out of the auction, and can’t afford to walk away from a potentially viable lawsuit. RadioShack needs a sale by March 31 to avoid running up another month’s worth of rent payments. Standard General says it won’t close a takeover deal until its RadioShack loans are recognized as valid.
Fresh & Easy is closing about 50 stores in California, Arizona and Nevada in the coming weeks as the grocery chain pursues a new business model, the Associated Press reported yesterday. The company said that by selling the stores, it can invest in new fresh food convenience stores. Los Angeles-based The Yucaipa Cos. bought the chain out of bankruptcy in 2013 from British retailer Tesco. Since that time, the company gradually changed the stores' look and introduced a new "click and collect" service in Las Vegas that allows shoppers to buy online and pick up the purchased items at the store.
Karmaloop may file for bankruptcy this week, The New York Post reported today. The Boston-based streetwear site — a dot-com darling just a few years ago with ambitious plans for growth — is scrambling to avoid a chapter 11 filing. Chief Executive Greg Selkoe is in talks with investors, including a New York-based private-equity firm, to pay off a portion of the company’s secured debt while adding $10 million in working capital to the business. Those talks could fall apart, leaving Karmaloop’s investors liable for as much as $100 million in writedowns on debt and equity. After racking up nearly $120 million in revenue in 2013, Karmaloop’s business plunged below $100 million last year as debt obligations crippled operations. The site’s troubles have spilled onto social media, with irate customers complaining on social media about undelivered merchandise.
RadioShack Corp.’s fate hangs in the balance Monday when a bankruptcy auction kicks off, pitting companies that want to liquidate the electronic retailer’s remaining assets against a hedge fund that has pledged to keep about half the chain’s stores open, The Wall Street Journal reported yesterday. There is little doubt hedge fund Standard General LP is the sole hope of survival for the company that introduced generations of consumers to electronic toys from ham radios, walkie-talkies, citizens-band radios and calculators to computers and cellphones. Other than liquidators, no other contenders surfaced in weeks of heavy marketing or in the year before the February bankruptcy filing. Hon. Brendan Linehan Shannon, who will make the call on RadioShack, ordered Tower Records sold to liquidators who narrowly won a 30-hour auction in 2006 over a rival who wanted to keep the chain open. The difference in the purchase price — $500,000 — resulted in 2,700 workers being laid off.
