Former RadioShack amends liquidation plan treatment for Salus claims

By Caroline Salls

Pittsburgh, Aug. 7 – RS Legacy Corp., formerly RadioShack Corp., filed an amended plan of liquidation and related disclosure statement Thursday with the U.S. Bankruptcy Court for the District of Delaware.

The amended plan revises the proposed treatment of Salus Capital Partners claims.

Specifically, Salus secured parties will receive encumbered cash to the extent authorized by a dispute resolution. The parties will waive any Salus deficiency claims.

On the plan effective date, the Salus secured parties will be deemed to have transferred assigned claims for the benefit of the holders of general unsecured claims.

Under the original plan, Salus lender deficiency claimants were slated to receive a share of liquidating trust assets plus potential additional distributions. The Salus secured claims class was added to the amended plan.

As previously reported, a liquidating trust will be established under the plan. Trust assets will include causes of action, reserve funds and liquidating RadioShack stock.

Treatment of creditors will include the following:

• Administrative claims, priority claims and priority tax claims will be paid in full in cash;

• Debtor-in-possession facility claims have been or will be satisfied under the company’s General Wireless Inc. and Sprint Solutions, Inc. sale order;

• Secured claims, other than the Salus secured claim, will either be paid in full in cash, or holders will receive the collateral securing the claims;

• Salus secured parties will receive encumbered cash to the extent authorized by a dispute resolution;

• Internal Revenue Service claims will be treated either in accordance with an agreement with the claimant or a bankruptcy court order;

• Holders of dark store claims will recover 75% in cash;

• Holders of 2019 notes claims will receive a share of remaining liquidating trust assets plus potential additional distributions;

• Holders of general unsecured claims will receive a share of remaining liquidating trust assets;

• Intercompany claims and interests in RadioShack will be canceled, and holders will receive no distribution; and

• Interests in other debtors will remain outstanding and will be canceled when the existence of each other debtor is terminated. Upon such cancellation, holders will receive no distribution.

A combined plan confirmation and disclosure statement approval hearing is scheduled for Sept. 16.

RadioShack is a Fort Worth, Texas-based technology retailer that filed for bankruptcy on Feb. 5, 2015. Its Chapter 11 case number is 15-10197.

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