RadioShack CEO Joseph Magnacca told employees today that he is stepping down from the firm he has headed since February 2013.
The news comes less than 24 hours after bankruptcy judge Brendan Shannon gave final approval for hedge fund Standard General LP to acquire RadioShack’s assets.
Magnacca was formerly with Walgreen Co. before joining RadioShack.
“I am pleased with Judge Shannon and the court’s decision to approve Standard General’s bid for RadioShack assets,” Magnacca said in a statement. “This option provides an opportunity for RadioShack to continue operating as a private company with fewer stores, preserving a number of jobs. I am proud to have been associated with such an iconic brand and to have been a part of the hard-working team at RadioShack.”
On Tuesday, the bankruptcy judge approved the sale of more than 1,740 RadioShack stores to hedge fund Standard General, preserving some 7,500 jobs.
RadioShack’s bankruptcy plan calls for Sprint, the No. 3 U.S. wireless carrier, to operate dedicated “store within a store” shops in most of the locations acquired by acquired by General Wireless, a newly formed affiliate of Standard General LP.
The ruling by Judge Brendan Shannon in Wilmington, Delaware, comes after a court hearing that stretched over four days following a disputed auction process that lasted almost as long last week.
Shannon said Standard General’s bid, valued at about $160 million, was clearly “economically superior” to an alternative liquidation proposal by another bidding group, even before accounting for the preservation of jobs and “a century-old American retailing icon.”
The chain has already shrunk substantially. Roughly 2,000 RadioShack stores have closed or are closing.
In granting the sale, Shannon overruled an objection by Salus Capital Partners, a pre-bankruptcy lender whose $150 million claim made its one of the electronics retailer’s largest creditors.
Salus had called Standard General’s offer a “sham” and offered to pay about $271 million for RadioShack’s assets, combining the liquidation proposal with $129 million that was contingent on winning future litigation in the case.
Salus also had challenged Standard General’s right to bid using $112 million of credit on debt it is owed, and only a small amount of cash.
In last-minute revisions to its initial offer, Standard General agreed among other things that intellectual property and customer data would not be part of the sale. The planned inclusion of personally identifiable information on 117 million consumers had prompted objections from government authorities in several states.
The sale agreement gives Standard General a six-month, royalty free license to use the RadioShack trademark, which would either have to be purchased later or replaced with a new name.
RadioShack, which has not turned a profit since 2011, sought bankruptcy protection in February after years of financial struggles.
The company, founded in Boston in 1921, began as a distributor of mail-order ship radios, ham radios and parts. In postwar era, it made a name for itself selling high-fidelity audio components, calculators, early personal computer systems and mobile phones, and the computer industry’s first laptop.