Our regular California readers may remember seeing a previous post here regarding the Chapter 11 bankruptcy filing by former electronics powerhouse retailer RadioShack. The company, hindered by changing consumer preferences that have seen many brick-and-mortar retailers lose significant ground to Internet-based companies, filed for Chapter 11 bankruptcy to presumably attempt to turn things around and remain in business. The most recent reports concerning the company's Chapter 11 proceedings indicate that several different options are still in play.
One report suggests that a bidding fracas is heating up between two parties that are both interested in paying millions of dollars to take over RadioShack's assets. One bid, of about $160 million, would have kept over 1,700 RadioShack retail locations open, which would have been good news to the 7,500 people who would have been able to maintain their employment with the company. However, another interested party reportedly submitted a bid of nearly $271 million.
For RadioShack, it seems the uncertainty regarding the future will remain. A business bankruptcy filing can be tricky when the parties involved are trying to work out a solution along the way. This is why sometimes in a Chapter 11 bankruptcy filing it is advantageous for everyone involved to know and agree to what is going to happen before the filing even occurs.
When a company pursues a Chapter 11 bankruptcy filing, the results can sometimes be unpredictable. But, with the right information about the options beforehand, a company should be able to streamline the process and expect a far more predictable outcome.
Source: Daily Finance, "Bankruptcy Hearing to Decide What's Next for RadioShack," Randall Chase, March 26, 2015