RadioShack set to receive $20 million payment under Sprint settlement

By Kali Hays

New York, June 2 – RadioShack Corp. is seeking approval of a negotiated settlement deal with Sprint Solutions, Inc. resolving claims related to residual payments under a retail distribution agreement, according to a Tuesday motion with the U.S. Bankruptcy Court for the District of Delaware.

The distribution agreement between the parties goes back to 2012 and allowed RadioShack to sell pre-paid Sprint brand products and services in its retail locations. After RadioShack filed for bankruptcy, Sprint filed a “multi-million dollar claim” against the company claiming that RadioShack failed to operate the program properly.

However, Sprint and General Wireless, Inc., which purchased 1,743 RadioShack stores in April, executed a “retail alliance agreement” whereby Sprint will have a number of retail outlets located within a number of “co-branded” RadioShack locations, according to the motion.

Under the proposed settlement agreement, RadioShack and Sprint have agreed to withdraw all claims against one another, and Sprint will pay RadioShack a total of $20 million, resolving any remaining disputes and payment or inventory claims.

RadioShack said the outcome of litigating the issues would be “uncertain” and that the payment from Sprint will “provide much needed liquidity” to its estate.

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

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