As many predicted, RadioShack Corp. has filed for bankruptcy protection.
The electronics retailor filed a Chapter 11 bankruptcy petition on Thursday after reaching a deal to sell existing stores to hedge fund Standard General.
In its petition, RadioShack listed $1.2 billion in assets and $1.39 billion in debts. The filing occurred in the U.S. Bankruptcy Court in Delaware.
Standard General will procure up to 2,400 of electronic retailer’s current 4,000 stores. Affiliate company General Wireless plans to partner with wireless operator Sprint to take over as many as 1,750 retail shops, according to the Wall Street Journal.
Sprint would essentially operate a store within a RadioShack store, offering "mobile devices across Sprint`s brand portfolio as well as RadioShack products, services and accessories," according to a statement made by Sprint.
RadioShack asked the U.S. Bankruptcy Court for approval to join with liquidation firm Hilco Merchant Resources to close the remaining retail stores. Domestic and international franchise stores will not be included in the restructuring.
DW Partners LP has agreed to finance RadioShack with roughly $285 million in bankruptcy financing, which will provide the company with an extra $20 million in borrowing ability.
According to the Wall Street Journal, employees at several RadioShack locations have been told by the company ship smartphones to nearby stores that would remain open in an effort to speed up the closing process.
Additionally, workers in some stores have been told to slash prices on smaller-ticket inventory.
Standard General had provided RadioShack with an undisclosed loan last year. However, the financial assistance was not great enough to carry the company while executives failed to persuade lenders and suppliers to renegotiate current agreements.
RadioShack posted losses in past 11 consecutive quarters. The company warned of a potential bankruptcy filing in a December securities filing.
As of late last year, RadioShack employed 24,000 people.
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