Monday, September 14, 2015

Latest in RadioShack Bankruptcy Case

The company filed a response [pdf] to objections by Standard General and Wells Fargo to plan confirmation.

Standard General and Wells Fargo assert purported indemnification rights against the Debtors that do not exist under either the ABL Credit Agreement or the DIP Credit Agreement. Under established New York law (which governs both agreements), an indemnification agreement does not cover claims made by the indemnifying party itself absent “unmistakably clear” language. This makes sense, because such an indemnification right would be tantamount to a release, and RadioShack (both pre- and post-bankruptcy) never gave Standard General or Wells Fargo a general release. Plain vanilla indemnity agreements (such as those contained in section 9.6 of each of the ABL Credit Agreement and DIP Credit Agreement) cover claims brought by third parties. And, of course, the Committee’s timely filed litigation in Fort Worth, Texas (the “Texas Litigation”) is on behalf of RadioShack (not a third party), a right expressly provided by the Sale Order.
Stock is currently 6.5 cent bid.

1 comment:

Anonymous said...

Do u know when Radio Shack are going to emerge from Bankruptcy?