RadioShack notes trustee objects to loan OK before committee review

By Caroline Salls

Pittsburgh, Feb. 9 – RadioShack Corp. indenture trustee Wilmington Trust, NA objected to the company’s proposed debtor-in-possession financing, arguing that an unsecured creditors committee should be allowed to evaluate the DIP facility before any pre-bankruptcy debt is paid down and any case milestones implemented, according to a Sunday filing with the U.S. Bankruptcy Court for the District of Delaware.

Wilmington Trust is the indenture trustee for RadioShack’s 6¾% senior unsecured notes due 2019.

“The DIP motion seeks to implement - on an unjustifiably expedited basis - several questionable measures that may irreparably harm the interests of unsecured creditors before an unsecured creditors’ committee has even been formed,” Wilmington Trust said in the objection.

“While news of the debtors’ impending bankruptcy has been well-documented in the press, there has, to date, been absolutely no transparency to unsecured creditors on any aspect of these cases or the debtors’ restructuring plans.”

The trustee said RadioShack has enough cash collateral to meet its liquidity needs through the final DIP financing hearing without incurring any new debt.

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

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