Radio Shack bankruptcy dilemma, Chapter 11 recovery unlikely

By Peter Chubb - Sep 15, 2014

With the news that Radio Shack’s CFO, John Feray resigned last week after just 7 months on the job, its comes as no surprise that the company is considering bankruptcy. Holly Etlin will now take over the vacant spot for now, but one has to wonder how long for?

Etlin is the MD of AlixPartners and even though some might see getting outside help as a positive thing, this has done nothing to rally Radio Shack share prices, and has been falling ever since 2010.

Radio Shack bankruptcy dilemma – Going bankrupt would have to be a last resort for the struggling company, as according to an article on Reuters, there would be no coming back if Radio Shack files for Chapter 11.

Radio Shack bankruptcy dilemma

Only a small amount of companies emerge from bankruptcy seeing as though they only have 210 days to recover, which Radio Shack would be highly unlikely to do in such a short amount of time.

In reality, if Radio Shack were to file for Chapter 11, chances are lenders will foreclose in about three or four months and will lead to a going-out-of-business sale, which will not be good news for Radio Shack workers, but will be for you and I, as it will be a chance to grab a bargain.

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