RadioShack Trademarks, Customers, Dealer Network Up for Sale

The RadioShack business has a new owner. The RadioShack name is up for sale.

Headed to the bankruptcy auction block in May is the well-known and occasionally mocked trademark of the electronics retailing pioneer, as well as the data of millions of customers and contracts with hundreds of independent dealers strung across small-town America, who have been selling under the RadioShack name for decades.

It is all for sale in a bankruptcy that, so far, has only paid off part of the $1 billion or so in debt that had pushed RadioShack Corp. into bankruptcy in February.

While much of the business was saved through a takeover by Standard General LP, the corporate shell of RadioShack left behind in Chapter 11 is still trying to scrape up more cash for creditors.

More than half the 4,000 stores are being liquidated, but the hedge fund rescued over 1,700 stores and is leading a revival of the retailing operation. Many are flying the flag of Sprint Corp., along with the iconic RadioShack name, as Standard General implements its strategy of streamlining, improving and sharpening the focus of the product offerings.

Standard General has said its turnaround strategy doesn't hang on the RadioShack name, but it may make an offer for the brand. Standard General couldn't immediately be reached Monday to discuss whether it will bid at the auction.

As part of the takeover, Standard General has the right to use the RadioShack name for six months. After that, it will have to buy the brand and other intellectual property, such as the dealership agreements, if it wants to incorporate them into its business. Officials at Standard General have said they see great value in the dealership and franchise operation, a string of 800 or 900 small businesses established in communities too small to support a company-owned RadioShack outlet.

A lawyer for RadioShack didn't respond Monday to inquiries about the intellectual property sale. A bankruptcy judge has to sign off on rules for the competition, where a May 6 deadline has been set for the bids. If RadioShack gets more than one offer, there will be an auction May 11.

The sale to Standard General took care of RadioShack's top-ranking debt but left little for unsecured creditors, including landlords and suppliers. Creditor lawyer Jay Indyke said Monday that RadioShack is starting the process of selling the intellectual property and isn't sure how it will turn out.

Among those still waiting for payment is second-tier secured lender Salus Capital Partners, which has first claim on the intellectual property. Owed $150 million, Salus may get some money from the sale of the business to Standard General, Mr. Indyke said. However, a rich price for RadioShack's basket of intellectual property would go a long way toward satisfying Salus.

RadioShack's customer lists have been a particularly sensitive spot in the electronics retailer's bankruptcy. Names and addresses were collected over the years under promises they wouldn't be rented or sold.

State officials campaigned in court warning they will block deals that would violate those terms. The customer data was withdrawn from the March auction. Papers filed Friday with the U.S. Bankruptcy Court in Wilmington, Del. say RadioShack is working closely with the Attorney General Ken Paxton, and other regulators worried about the privacy of RadioShack's customers.

A consumer privacy ombudsman is already in place to make sure any transaction involving the consumer information complies with the law.

Write to Peg Brickley at [e-mail]

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