RadioShack agrees to sell back $10.5 million of merchandise to AT&T

By Kali Hays

New York, March 20 – RadioShack Corp. is seeking approval of a settlement agreement with AT&T Corp. and General Wireless, Inc., according to a March 20 motion with the U.S. Bankruptcy Court for the District of Delaware.

The proposed settlement resolves some informal objections and concerns AT&T raised with RadioShack concerning its commission-based sale agreement with the company for AT&T devices and products.

As previously reported, General Wireless is the stalking-horse purchaser for some of RadioShack’s assets and United States stores.

Under the settlement, AT&T will purchase up to $10.5 million of new, unopened AT&T devices sold at 100% book value, and the parties agreed to release one another from all claims and causes of action related to the bankruptcy case.

As reimbursement for some “account maintenance fees” that AT&T is obligated to pay under the terms of the previous sale agreement, the company agreed to pay RadioShack $5.5 million, conditioned on the agreement being terminated by March 31, according to the motion.

RadioShack said that the settlement will allow it to avoid “the costs and risks inherent in any litigation over these matters,” while also providing “clarity regarding the status of the AT&T agreement going into the auction for the sale of the debtors' assets.”

A hearing to consider the settlement is set for March 26.

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

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