Salus Capital complaint urges cap on credit bid for RadioShack
SAN FRANCISCO (Reuters) - Salus Capital LLC filed an adversary complaint on Wednesday in RadioShack Corp's Chapter 11 bankruptcy that seeks to hold credit bidding in the electronic retailer's upcoming auction to $111 million.
RadioShack won bankruptcy court approval last month to auction about 2,000 of its stores with an initial $200 million bid from Standard General hedge fund, which will keep about half of the stores open and operate them under an agreement with Sprint Corp (S.N).
Credit bidding allows a creditor to use the debt it is owed as currency during a bankruptcy auction sale. It is unclear how much of its credit Standard General plans to use in its bid at the March 23 auction.
RadioShack owes Salus, a middle-market lender and subsidiary of Harbinger Group Inc, and Cerberus Capital Management $250 million for a loan.
Salus and RadioShack declined to comment on the filing. Standard General was not immediately available for comment.
The case is In re: RadioShack Corp, et al., Case No. 15-10197 in U.S. Bankruptcy Court for the District of Delaware
(Reporting by Jim Christie; Editing by Chris Reese)
