RadioShack to sell name separately with $20 million opening bid

WILMINGTON, Del. - RadioShack Corp.'s biggest shareholder, already seeking to buy hundreds of stores from the bankrupt electronics retailer, has agreed to a separate sale of the chain's name, with bids to start at $20 million.

The plan to break off the sale of trademarks and other intellectual property from the auction for store leases would put the 94-year-old brand up for grabs without forcing buyers to also bid on the stores.

Greg Gordon of Jones Day, a lawyer for RadioShack, announced the arrangement Wednesday in U.S. bankruptcy court as he outlined a series of last-minute changes to a proposal by Standard General, which holds 10 percent of the company's stock, to buy as many as 2,000 stores.

Before the Fort Worth, Texas-based retailer filed for bankruptcy this month, Standard General agreed to bid on about half of the company's 4,000 locations, with plans to co-brand some of the stores with Sprint Corp., the wireless carrier.

An official committee of unsecured creditors has objected to various aspects of the proposal.

Susheel Kirpalani, a lawyer for the committee, told U.S. Bankruptcy Judge Brendan Shannon in Wilmington, Delaware, Wednesday that Standard General is negotiating to buy senior debt owned by other hedge funds to improve its ability to trade debt for RadioShack assets, rather than pay cash, during an auction. A bigger claim would give Standard General a bigger so- called credit bid.

Kirpalani, a partner at Quinn Emanuel Urquhart & Sullivan, said it was too soon to release those entities from any liability they may have incurred before the Feb. 5 bankruptcy filing. Calling the release demand the "elephant in the room," he said it was too soon to shield those investors. The committee is seeking to investigate the funds and, if necessary, sue them to increase creditor recoveries.

Shannon agreed to take a break in the hearing so the two sides could talk about the latest changes to the Standard General proposal.

Tom Howley, another RadioShack lawyer, told the court that Spring Communications is interested in bidding on the stores that Standard General doesn't want and that might otherwise be liquidated.