RadioShack lender Salus Capital asks court for Chapter 7 conversion

By Kali Hays

New York, June 2 – RadioShack Corp.’s secured lender, Salus Capital Partners, LLC, asked the U.S. Bankruptcy Court for the District of Delaware to convert the company’s Chapter 11 bankruptcy case to Chapter 7, according to a Tuesday motion.

Salus claims that RadioShack’s estate is “likely administratively insolvent” and that after the company has completed its central asset sales it will “have nothing left to achieve in Chapter 11.”

“There is no longer a viable business to reorganize, nor an advantage to liquidating the debtors’ remaining assets, which primarily consist of potential litigation claims,” according to the motion.

Moreover, Salus said that allowing RadioShack to remain in Chapter 11 will only allow its administrative expenses to continue to grow “at staggering and unsustainable levels” and that conversion is the only way “to conserve what little value may remain for the benefit of the debtors’ creditors.”

A hearing to consider the motion is set for June 25.

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

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