RadioShack Files For Bankruptcy; To Sell Stores

(RTTNews) - The struggling consumer-electronics retailer RadioShack Corp. (RSH) said that the company and certain of its U.S. subsidiaries have filed voluntary petitions for relief under Chapter 11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court for the District of Delaware. RadioShack's foreign subsidiaries and its franchisee-owned stores are not included in the filing.

RadioShack said it has signed an asset purchase agreement with General Wireless Inc., an affiliate of Standard General L.P. General Wireless has agreed to acquire between 1,500 and 2,400 of RadioShack's U.S. Company-owned stores.

As part of this process, other parties will have an opportunity to submit offers for RadioShack's assets in a court-approved process. The sale agreement is subject to court approval and other conditions.

General Wireless, the entity formed to acquire the stores under the asset purchase agreement, has agreed in principle on terms with Sprint (S) to establish a new dedicated mobility "store within a store" retail presence in up to 1,750 of the acquired stores. This agreement-in-principle is subject to negotiation of definitive documentation as well as court approval.

In addition, the Company has filed a motion with the Court to proceed with the closure of the remaining company-owned stores under an agreement with Hilco Merchant Resources. Stores that are closing are expected to sell remaining inventory. RadioShack currently has approximately 4,000 company owned stores in the U.S. Its more than 1,000 dealer franchise stores in 25 countries, the stores operated by its Mexican subsidiary, and its Asia operations are not included in the Chapter 11 filing or the agreements announced today.

Discussions are underway with interested parties to sell all of the company's remaining assets, RadioShack said.