RadioShack Bankruptcy Update: Electronics Retailer Nears the End

The former RadioShack Corp. is currently nearing the final stretches of its bankruptcy filing, reaching a final reckoning after being in business for 94 years.

According to the Wall Street Journal, bankruptcy lawyers are currently counting the take from the liquidation of the now-collapsed company. At the same time, Salus Capital Partners LLC is seeking to oust these lawyers and replace them with a trustee by converting RadioShack’s bankruptcy into a Chapter 7 filing.

The electronics retailer, which made a name for itself over the last century by selling consumer electronics ranging from cellphones to radios, filed Chapter 11 bankruptcy in February. The company hastily closed or sold its 4,000 or so remaining store locations. This form of bankruptcy, which offers legal protection from creditors and sets up a division of assets, is most often filed by businesses. In 2013, about 8,980 businesses filed Chapter 11 bankruptcy.

By converting RadioShack’s bankruptcy into a shoestring Chapter 7 case, Salus Capital would effectively replace the company’s teams of lawyers and advisers with a single trustee. Salus Capital, a hedge-fund owed some $150 million, said in a June 23 filing that RadioShack’s liquidation brought in much less than it should have.

Additionally, the bankruptcy case has racked up $45 million in legal and other professional fees, court papers said, which “threaten to rapidly erode creditor recoveries in these cases.” By switching to a trustee, Salus would no longer need to front the bill for these legal fees, and the case would be wrapped up in a much more efficient manner.

“Salus stands to lose the most in these Chapter 11 cases, which at this stage are essentially being funded directly from Salus’s pockets,” lawyers for the hedge fund explained.

If nothing else, it’s clear that the cord is finally cut on RadioShack’s future.

Life Continues After Bankruptcy: How Bankruptcy Offers Many A Fresh Financial Start

banruptcy-next-exitThough the economy is beginning to show promising signs of improvement, many Americans are continuing to fall deeper into debt. Financial experts say that those in debt often make big mistakes while in search of financial relief.

“American consumers deleveraged after the financial crisis, but they’re starting to take on more debt again,” says Ben Woolsey, president of credit-card advice website In fact, the total outstanding revolving credit card debt of American consumers reached $873.1 billion at the end of June 2014, according to the latest data from the Federal Reserve, and the numbers continue to steadily increase.

Unfortunately, many consumers seeking to ease the burden of debt often make mistakes that can actually make their financial situation worse. Some examples include, taking out payday or title loans, transferring a balance to a zero-interest credit card but failing to pay off the balance when the higher interest rate begins, and borrowing from a 401(k) retirement account. In addition, paying off one creditor while failing to continue making payments on other debt is counterproductive.

Filing for bankruptcy gives many Americans the opportunity to regain control of their financial and personal life, allowing them a fresh start. Bankruptcy is common debt relief option. Statistics show that one out of every 70 households in the United States files for bankruptcy, that’s an estimated 322 out of every million Americans.

However, there are a number of myths and stigmas surrounding filing for bankruptcy that are based on misinformation. For example, financial irresponsibility is not the sole reason people file for bankruptcy. In fact, most bankruptcy filings are due to unemployment or medical related expenses. It’s important to keep in mind that the benefits of filing for bankruptcy greatly outweigh the the stigmas as well as the risks of carrying debilitating debt.

Life continues after filing for bankruptcy. Additionally, filing for bankruptcy also includes long-term financial planning advice. Many Americans feel empowered after filing, as they now have the experience and know-how to make better and more informed financial decisions in the future. Bankruptcy gives Americans the opportunity to start fresh both financially and personally, allowing them the freedom to pursue the life they’ve always wanted.