Earlier this year, an affiliate of the hedge fund Standard General LP assumed more than 1,700 RadioShack® store leases in an auction sale in the electronics retailer’s bankruptcy. Standard General reportedly plans to partner with Sprint® to open stores within more than 1,400 of these RadioShack locations. Sprint branded mobile devices, including Boost® and Virgin Mobile®, will be sold by Sprint employees in the Sprint stores within the RadioShack stores. The storefronts and promotional materials will bear the Sprint brand, but the locations will also carry some other historical RadioShack products, services and accessories.
In addition to its store leases, RadioShack’s assets included its name and other IP assets, as well as a substantial amount of personal information collected from millions of consumers prior to the bankruptcy. This personal information includes names, addresses, telephone numbers, email addresses, and records of purchased items. In a second bankruptcy court auction, which was approved by the bankruptcy court on May 29, Standard General paid $26.2 million for these assets.
Yesterday, the bankruptcy court approved the sale over the objections of several parties, including the Federal Trade Commission (FTC) and third party manufacturers Apple and AT&T who sold products to the bankrupt retailers. The approval also came after RadioShack successfully negotiated a settlement with several state attorneys general to limit the buyer Standard General’s access to (i) RadioShack customer email to the last two years, and (ii) other RadioShack customer information to only 7 of 170 fields of data collected by RadioShack.
RadioShack claimed segregating this customer information was not done initially and therefore would be difficult if not impossible to do now. The RadioShack court ultimately approved the sale, and ruled against the FTC, AT&T, Apple and RadioShack customers.
See In re RadioShack Case No. 15-10197 (BLS).