Retailer Radio Shack may be near bankruptcy according to one of its regulatory filings that hinted at such action. The store sells electronics parts such as cables and batteries as well as the electronics like phones, cameras and, of course, radios themselves.
There has been evidence that the business has been trying to change in order to save its finances, but has been unable to do so. The company has had a hard time closing stores recently because of certain agreements with its lenders. There are currently 1,100 stores. Physical stores are expensive to run and maintain and do not have a competitive advantage in todayâ€™s e-commerce world.
Chapter 11 bankruptcies are the avenue typically pursued by large corporations when they seek bankruptcy protection. Once a company enters Chapter 11 bankruptcy protection, their creditors cannot sue the company. The company may restructure its debts and its operations so that it can be on better financial footing when it exits bankruptcy. If a company will not reopen or reopen at the same capacity as it was at pre-bankruptcy, then it can liquidate, or partial liquidate. That means that the company sells assets, such as patents or real estate, to pay debts. It seems as if RadioShack might liquidate. Chapter 11 bankruptcy would also allow agreements with lenders to be modified so that the company could close some stores that might be loss-makers.
The company is over $650 million in debt. From quarter-to-quarter revenue has been falling, and RadioShack now has much less cash than it had at the end of 2013, $30.5 million down from $179.8 million.
If you are facing pressure by mounting debt that you cannot pay back, then you may wish to consider bankruptcy. Discussing a personal bankruptcy with a qualified lawyer can help you assess your situation and your options of legal recourse. Jayson Lutzky is an attorney with an office in the Bronx, New York, who has been practicing law for the past 31 years and has represented thousands of highly satisfied clients. Call 718-514-6619 to set up a free, confidential in-person consultation. Visit www.MyNewYorkCityLawyer.com for additional resources on bankruptcy.