New Chapter 22 Filing - General Wireless Operations Inc. (f/k/a Radio Shack)

General Wireless Operations Inc.

  • 3/8/17 Recap: We're exasperated. Let's revisit history. In February 2015, Radio Shack filed for bankruptcy. The bankruptcy court confirmed the plan of reorganization in October 2015 and it went effective just five days later. So...six...wait, carry the one...yeah, sixteen months later the successor entity General Wireless Operations is now in bankruptcy looking to shut the lights and/or pass this toad on to another sucker as Standard General pulls the chute. Why did this all happen? Well, because Sprint sucks, apparently ("[w]hile the retail business progressed, the Sprint relationship did not yield the benefits that the Debtors expected"). The arrangement out of bankruptcy was for the reinvented Radio Shack to have co-branded stores with Sprint for the purpose of selling Sprint mobile devices that nobody wants (note: 78+mm Apple iphones were sold last quarter). Sprint was obligated to pay rent for the space it occupied as well as commissions above a certain threshold level of sales ($60mm). Hahahaha...above a threshold level of sales? Yeah, never got there (wait what? erroneous projections? you don't say!).  Absent that cash inflow, the company had insufficient funds to continue to operate as a going concern. Hence, the Scarlet 22.  
  • Jurisdiction: D. of Delaware
  • Capital Structure: $75mm revolver and term loan debt ($25.5mm funded) (Royal Bank of Canada & GACP Finance Co. LLC) & $88mm second lien revolver and term loan debt ($39.7mm funded)(Standard General Master Fund LP, Cortland Capital Market Services LLC, Prisma Capital Partners LP) & $23mm IP term loan (Kensington Technology Holdings LLC)
  • Company Professionals:
    • Legal: Jones Day LLP (Scott Greenberg, Mark Cody) & Pepper Hamilton LLP (David Fournier, Evelyn Meltzer, Michael Custer, Kay Kress)
    • Financial Advisor: Loughlin Management Partners & Company Inc.
    • Liquidation Consultant: Tiger Capital Group LLC
    • Claims Agent: Prime Clerk LLC (*click on company name for docket)
  • Other Parties in Interest:
    • Sprint
      • Legal: McGuire Woods LLP (David Swan, James Van Horn) & (local) K&L Gates LLP (Steven Caponi)
    • Kensington Technology Holdings LLC
      • Legal: Honigman Miller Schwartz and Cohn LLP (Joseph Sgroi)
    • GACP Finance Co. LLC
      • Legal: Paul Hastings LLP (Andrew Tenzer, Leslie Plaskon, Michael Comerford) & (local) Young Conaway Stargatt & Taylor LLP (Pauline Morgan, Justin Rucki, Allison Mielke)
    • Official Committee of Unsecured Creditors
      • Legal: Kelley Drye & Warren LLP (Eric Wilson, Jason Adams, Lauren Schlussel) & (local) Klehr Harrison Harvey Branzburg LLP (Michael Yurkewicz)

Updated 3/21/17