RadioShack trade creditor MagicJack halts product sales to all stores

By Kali Hays

New York, Feb. 6 – RadioShack Corp. unsecured trade creditor MagicJack LP said that it has ceased all sales to the company and will not resume until RadioShack has sufficient liquidity to pay for purchased inventory, according to an 8-K filed Friday with the Securities and Exchange Commission.

As previously reported, MagicJack has an outstanding trade debt of $1.34 million.

MagicJack went on to say that it will not recognize roughly $125,000 of its fourth quarter 2014 revenue from RadioShack sales or any portion of 2015 proceeds “due to uncertainty of collectability of such sales.”

Though RadioShack “has been a key retail channel distribution partner” and represented about 71% of sales of all MagicJack devices sold, the creditor said that the bankruptcy filing will “not have a material adverse effect” on MagicJack’s operations.

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

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