%1

RadioShack Corp. is mired in negotiations with its lenders over plans to close as many as 1,100 stores, complicating the struggling consumer-electronics retailer's turnaround efforts, the Wall Street Journal reported today. The delay also is intensifying tensions with some lenders, who were surprised by the store-closing plan when RadioShack publicly disclosed it on March 4. The company, which operates about 4,300 stores in the U.S., said at the time that the plan still needed permission from its lenders, adding that its credit agreements allowed it to close only about 200 stores without the approval of lead lenders Salus Capital Partners and GE Capital, a unit of General Electric Co. The company also said in March that it planned to spend the next month hammering out an agreement with its lenders before choosing a liquidator to wind down the stores.

Coldwater Creek Inc. won court approval to borrow $42 million to finance operations while the women’s clothing retailer prepares for going-out-of-business sales at its more than 370 stores, Bloomberg News reported yesterday. The loan from current lender Wells Fargo & Co. will allow the company to maximize returns for creditors, Coldwater said in court papers. Coldwater, founded as a catalog business 30 years ago, said last week it intends to start liquidating inventory just before the May 11 Mother’s Day holiday. Bankruptcy Judge Brendan Shannon at a hearing yesterday granted the company interim approval to borrow as much as $42 million of a $75 million financing package.

Calumet Photographic Inc., the photography retail chain whose abrupt shuttering and bankruptcy filing surprised customers, has found a buyer for some of its assets, the Wall Street Journal reported today. According to court papers filed yesterday in Calumet’s bankruptcy case, CalPhotoUS LLC — a new company formed by Calumet’s former principals — is offering $2.825 million to acquire inventory, store leases and other assets. The inventory and leases are for former Calumet stores in such cities as Chicago, San Francisco and Washington, D.C. CalPhoto would also take responsibility for any liabilities related to the leases as well as the stores’ former employees and customers.

Unsecured creditors expected to go unpaid in Sbarro LLC 's second trip through bankruptcy say that the pizza chain is blatantly disregarding landlords and others owed money by the company, Dow Jones Daily Bankruptcy Review reported today. The official committee representing Sbarro's unsecured creditors on Monday filed an objection to Sbarro's proposed $20 million bankruptcy loan, which it says sets the restaurant company's restructuring on a path that hurts the committee's members. Unsecured creditors aren't expected to recover any of their claims through the restructuring.

Coldwater Creek Inc., a women’s clothing retailer that hasn’t been profitable since 2007, is planning to liquidate its assets after a bankruptcy filing that may come as soon as today, Bloomberg News reported yesterday. The filing would come five months after Coldwater said that it was exploring strategic alternatives, including a sale. Coldwater would follow Dots LLC and Loehmann’s Inc., two clothing chains that have liquidated in recent months amid sluggish consumer spending. Sales at Coldwater stores that have been open at least a year, considered a key gauge of retail performance, plunged 17 percent in the quarter ended Nov. 2.

Sbarro Inc., the 800-restaurant U.S. pizza chain in bankruptcy, has seen signs of interest from 31 potential bidders ahead of an auction for which it seeks initial offers by April 14, Bloomberg News reported yesterday. Of 114 possible buyers contacted, 31 signed confidentiality agreements to learn more about Sbarro, Adam Keil, a managing director at investment bank Moelis & Co., said in an April 4 in court filing. Sbarro’s secured lenders already have a proposal to buy the company under a reorganization plan that provides for an auction to test the market for higher bids. The plan has support of holders of 98 percent of secured lender claims, Keil said. The winning bidder must pay the company’s bankruptcy loans in full and offer more than $500,000 more than the $35 million credit bid made by the secured lenders.

Brookstone Inc., the retailer of luxury gadgets including $4,600 massage chairs, won bankruptcy court approval of a financing package to help fund operations and pay off some debt as it pursues a sale, Bloomberg News reported on Saturday. Brookstone filed for bankruptcy on April 3 with a deal to sell its assets to Spencer Spirit Holdings Inc. The chain has struggled to adapt to an evolving retail landscape where online competitors dominate and consumers are cutting back on non-essentials. Bankruptcy Judge Kevin J. Carey on Friday granted the company interim approval to borrow about $91.3 million of $96.3 million in financing being provided by some of its noteholders. The company will seek approval of the remaining $5 million at an April 25 hearing.

Retailer Brookstone Inc. said that it would be bought by the owner of Spencer's retail chain for about $147 million as part of a pre-packaged bankruptcy plan, Reuters reported yesterday. Brookstone, which has been struggling with falling sales as shoppers cut discretionary spending, filed for Chapter 11 protection on Thursday in a U.S. bankruptcy court, along with 10 of its subsidiaries. Spencer Spirit Holdings Inc., which also owns costume retailer Spirit, will be the stalking-horse bidder at Brookstone's auction. Spencer Spirit will receive a $3.7 million break-up fee if it is not selected as the final bidder.

Women’s retailer Coldwater Creek Inc. is preparing to file for bankruptcy protection within about a week as it contends with a high debt load, declining sales and broader industry struggles, the Wall Street Journal reported today. Coldwater Creek, known for its catalogs selling a variety of women’s clothes and accessories as well as mall-based retail stores, has struggled for months. Attempts to avoid a bankruptcy filing by refinancing debt or selling itself to a private-equity buyer were ultimately unsuccessful. The company’s post-bankruptcy strategy isn’t clear. Coldwater Creek carries about $353 million in total debt, which includes about $180 million in current liabilities, according to its most recent earnings filing.

Brookstone Inc., which sells consumer gadgets ranging from travel electronics to massage chairs, is preparing to file for bankruptcy protection as early as Sunday, with a plan in place to be bought by another specialty retailer, the Wall Street Journal reported today. Egg Harbor Township, N.J.-based Spencer Spirit Holdings Inc., which owns Spencer's and costume retailer Spirit, has been in discussions with Brookstone for weeks as Brookstone battles disappointing sales, weak liquidity and a hefty debt load. The two parties are hoping to finalize sale paperwork over the weekend leading up to a bankruptcy filing. Spencer Spirit Holdings is expected to pay around $120 million for Brookstone, which has about $140 million in debt.