On October 29th, the the liquidating trustee of the Radio Shack liquidating trust filed lawsuits in the United States Bankruptcy Court for the District of Delaware seeking to claw back “preferential” payments made by Radio Shack to its creditors. These payments were made within the 90 days of its bankruptcy filing on February 15, 2015.
The creditors sued in these cases include, among others, landlords, utility providers, banks, logistics companies and providers of electronic goods. All totaled, approximately 200 creditors were sued for allegedly being “preferred.” These creditors undoubtedly provided valuable services and goods that Radio Shack accepted and used prior to filing for bankruptcy protection.
Additionally, many of these creditors likely had outstanding receivables as of the date Radio Shack filed for bankruptcy, which may never be paid. Under these circumstances, it is easy to understand why vendors might feel outraged upon receipt of a preference complaint.
Continue Reading Radio Shack Creditors Preferred? – Not If New Value Was Provided