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RadioShack name lives on, litigation looms

🕐 2 min read

RadioShack’s legal battle over Apple and AT&T customer information continues after hedge fund Standard General this week made the $26.2 million winning bid for the Fort Worth-based retailer’s brand name, customer data and other intellectual property.

It’s those two latter concerns that led Apple Inc. and AT&T Mobility to fight RadioShack Corp.’s attempt to sell customer information of those brands and others whose products it sells.

Also objecting to the sale is the state of Texas, which filed its objection in March on the basis that it would violate the Texas Deceptive Trade Practices Act.

Despite already approving a bid for selling RadioShack’s assets, a Delaware bankruptcy court still has not approved the sale. Standard General’s trademark purchase awaits Thursday May 14 talks between RadioShack and several state attorneys general to discuss selling data of about 117 million customers.

The sale awaits a judge’s approval at a May 20 court hearing.

At issue is intellectual property that Apple insists is not part of the bankruptcy estate. Selling Apple’s customer data would violate the computer company’s privacy policy and reseller agreement with RadioShack, it said.

“The reseller agreement between Apple and RadioShack protects information collected by RadioShack regarding purchases of Apple products and prohibits the proposed sale of such information,” Apple said in documents filed to the Delaware bankruptcy court handling the dispute.

RadioShack declined to discuss the issue in depth but provided a statement.

“We are working closely with all interested parties to come to the right resolution to protect our customers,” said Merianne Roth, a RadioShack spokeswoman.

While such legal disputes are not uncommon, the scope of RadioShack’s latest legal wrangling is unusual, according to a Dallas bankruptcy attorney.

“It’s a complicated issue because there’s more than one co-party saying that information shouldn’t be sold,” said Frances A. Smith, a partner with Shackelford, Melton, McKinley & Norton LLP’s Dallas office.

“It is common for most businesses to keep customer lists, but this is an unusual case in its scope,” Smith said.

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.

Editor Robert Francis contributed to this report.

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