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Bloomberg: RadioShack Lender Claims Retailer Broke Loan Agreement

December 03, 2014, 07:51 AM
Filed Under: Retail

Bloomberg reported , RadioShack lender Salus Capital Partners claimed the retailer defaulted on a borrowing agreement by accepting an October bailout from shareholder Standard General LP. The article cites a regulatory filing.

Salus, which holds part of RadioShack’s $250 million second-lien term loan, said in a notice sent to the company that the retailer breached four sections of the credit agreement governing the loan. The notice demands immediate payment of the debt.

The Bloomberg article says Salus contended Standard General should be considered an affiliate and thus barred from providing rescue financing under a credit accord signed last year. Salus said there were three other breaches of the accord that involved revolving credit, including that the loan capacity is too large relative to the valuation of the inventory.

RadioShack said in a statement that it plans to contest the Salus claims.

To view the Bloomberg article, click here.

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