The RadioShack (NYSE:RSH) auction moved into its second day on Tuesday as the company and its creditors failed to come to an agreement on the value of Standard General's bid.
Standard General's bid would keep RadioShack in operation, and the company is estimated to be worth $20 million more than a potential counterbid issued by a joint venture of liquidators, reported the Wall Street Journal.
The bidding lasted late into the night on Monday because the company wants to make sure the closing deal with Standard General is quick, without any obstacles. RadioShack is reportedly having trouble accepting Standard General's bid, which is based in cancelling loans already made to the company.
Creditors, owed $500 million in total, questioned the validity of those loans and have until the second week in April to decide whether or not to sue Standard General. If the auction goes through as planned, these creditors may see little to none of the money. And if RadioShack doesn't make a sale by March 31, it will have to run up another month's worth of rent payments. Therefore, RadioShack is pushing to expedite the sale of its assets.
RadioShack filed for Chapter 11 bankruptcy protection on Feb. 5. The company agreed to sell 1,500 to 2,400 locations to its largest shareholder, Standard General. Per the agreement, some of the stores would remain branded in a special section of up to 1,750 Sprint Corp. retail stores.
Standard General said it will close the deal when RadioShack's loans are recognized as valid.
-See this Wall Street Journal article
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