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Today Radio Shack filed for Chapter 11 Bankruptcy

It finally happened. Radio Shack has filed for Chapter 11 restructuring after a mostly successful 94-year run. Chapter 11 means it's not going away but will be sold, then liquidated. RS owns a ton of land on which their stores are located so there is certainly some value there. It'll be interesting to see who jumps on it. Here are some old ads that should make you smile, then below I have listed the vendor instructions/FAQ RS has issued. These cover how the restructuring work.

RadioShack Vendor FAQ

We understand and regret the unavoidable challenges the filing can create for many of our vendors and suppliers with respect to outstanding amounts owed for goods and services provided prior to February 6th. We are committed to helping make the claims process as smooth as possible for our vendors and suppliers, which the following questions are intended to help clarify. For additional support, please reach out to our claims agent by calling 844-794-3477 (U.S.) or +1-917-606-6439 (International), or by emailing radioshackinfo@primeclerk.com.
  1. Will vendors be paid for goods and services they provide to RadioShack after the filing? What about those provided to RadioShack before the filing date?
    • We expect that vendors will be paid in full under normal terms for post-petition invoices for goods and services provided on or after February 6, 2015.
    • RadioShack has secured commitments for up to $285 million in what is known as debtor-in-possession (or “DIP”) financing. The DIP financing is intended to permit the Company to complete its sale process. This financing is subject to court approval.
  2. Will vendors be paid for goods and services they provided to RadioShack before the filing date?
    • Vendors who have not received payment for services or goods provided prior to February 6, 2015 will need to submit a proof of claim for unpaid pre-petition goods or services. Information about this process will be made available on our claims agent’s sitecases.primeclerk.com/radioshack.
    • There is no need to re-issue purchase orders. RadioShack views its existing contract as enforceable post-petition and expects its vendors to continue to perform under these agreements. In fact, the bankruptcy code prohibits a creditor from unilaterally cancelling a contract.
  3. What is the definition of “pre-petition”?
    • Pre-petition means before the filing of the petition commencing the Chapter 11 case. In this case, amounts owed for goods received or services provided before February 6, 2015 are considered “pre-petition.”
  4. What is the definition of “post-petition”?
    • Post-petition means on or after the filing of the petition, or in this case on or after February 6, 2015. Amounts owed for goods received or services provided on or after this date are considered “post-petition.”
  5. Our company ships products to RadioShack in countries outside the United States. How does this affect us?
    • RadioShack’s subsidiaries outside the United States are not included in the filing.
  6. I’m not sure whether the entities we are doing business with are considered U.S. entities or not. Can you look at my contract to determine?
    • Our claims agent will reach out to a member of our vendor team in order to investigate the specifics of your situation.
  7. I have a claim. What do I do?
  8. Will my point of contact at RadioShack change?
    • No. Your day-to-day contact at Radio Shack should remain the same.
  9. Why did RadioShack file for Chapter 11?
    • The Company determined that the Chapter 11 filing was a necessary step to restructure its balance sheet and operations.
    • Our goal is to complete this restructuring process as quickly as possible. In the meantime, we fully expect to maintain day-to-day operations.
  10. Is RadioShack continuing to do business?
    • Yes. We are continuing to serve and meet the needs of customers through our network of stores and online capabilities.
  11. Can I get cash-in-advance and wire payments to complete the vendor transactions?
    • Because RadioShack is offering a large portion of their assets for sale at 363 auction, and because the final resolution of that auction is not clear, RadioShack will be very specific with its merchandise purchases.
    • These purchases will be evaluated on a transaction by transaction basis until the outcome of the auction.
    • As a result, RadioShack would actually prefer to pay for these purchases through some combination of Cash in Advance (CIA), Cash on Delivery (COD), and prepayment.
  12. Why haven’t you filed a critical vendor motion?
    • It was determined that a critical vendor motion was not needed.
  13. Why isn’t there a foreign vendor motion?
    • The Company determined that a foreign vendor motion was not necessary.
  14. Where can I get more information?
    • Updates about our progress will be available at www.RadioShackCorporation.com. If you have further questions after reviewing this site, please call our new Restructuring information line toll-free at 844-794-3477 (or +1-917-606-6439 for international callers).
    • You can also visit our claims agent’s site at cases.primeclerk.com/radioshack or emailradioshackinfo@primeclerk.com.

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