With RadioShack’s Bankruptcy Filing Imminent, What Comes Next?

bankruptcy filing petition and a court gavel
After years of stagnant, stalling profits and continued financial woes, RadioShack Corp. is finally close to reaching a plan to get Chapter 11 bankruptcy help and protection.

According to a February 5 Bloomberg article, the electronics retailer that once offered Americans a wide range of consumer electronics and hard-to-find niche technologies is currently working on a deal with its creditors that would allow the company to be protected from lawsuits as it seeks help with filing bankruptcy.

Unlike the two most common bankruptcy plans — Chapter 7 bankruptcy, which completely liquidates an individual’s debts, and Chapter 13 bankruptcy, which creates a repayment plan for an individual — the Chapter 11 bankruptcy process allows corporations to get bankruptcy help from the court and to create a debt reorganization plan.

So what comes next for RadioShack? Here are three things that are expected to take place during and after RadioShack’s Chapter 11 bankruptcy timeline:

Sprint’s move toward cellphone supremacy

As part of its bankruptcy agreement with creditors, RadioShack will likely sell the leases to up to 2,000 of its more than 4,000 U.S. store locations to Sprint, Bloomberg reports. Sprint’s acquisition of so much retail space would be a step toward the phone company’s turnaround plan to generate more customers and keep its spot as the third-largest U.S. phone service provider.

Amazon will move into the traditional retail realm

Another likely result of RadioShack’s move to get bankruptcy help is Amazon’s first foray into traditional retail. According to a February 5 Benzinga article, Amazon may be planning to buy up old RadioShack locations as a way to offer easier product returns and to get a cheap deal on retail space.

The end of RadioShack

The chances of RadioShack recovering from its bankruptcy are incredibly slim. Most experts agree that the company will fold its operations once its bankruptcy restructuring is completed. This bankruptcy is essentially the long-awaited punctuation mark on years of mixed branding signals, growing competition and lost consumer interest.

Have any other questions or thoughts for us regarding RadioShack’s bankruptcy, or bankruptcy in general? Share with us by leaving a comment below.