RadioShack Corporation (NYSE:RSH) seems to have failed to mention this, but the person it has hired to be its interim chief financial officer is a bankruptcy expert. Does this mean the retail chain is preparing to declare bankruptcy? It seems pretty suspicious, given her recent job history and her memberships in several key organizations.
RadioShack CFO resigns
The company announced today that John Feray resigned his position as CFO due to personal reasons on Friday. RadioShack appointed AlixPartners Managing Director Holly Etlin to be interim CFO as part of its consulting arrangement with AP Services. The retail chain hired AlixPartners, a firm that specializes in restructuring, last year to advise it on its turnaround efforts, so this association isn’t new.
There have been murmurings in the market that RadioShack could be close to bankruptcy for some time. Analysts have been predicting it for months, and Etlin’s involvement is yet another signal that bankruptcy could be imminent.
A look at Etlin’s work history
On Etlin’s profile page on the AlixPartners website, it states that she was involved in restructuring at Borders, Freedom Communications, New Century Financial, Tanner & Haley and Winn-Dixie Stores. All of those companies filed for bankruptcy, with various end results.
Interestingly enough, she is also a member of the American Bankruptcy Institute, the Association of Insolvency and Restructuring Advisors and the International Women’s Insolvency and Restructuring Confederation.
Can RadioShack avert bankruptcy?
Last month, there was a report that RadioShack was talking with Standard General LP about a bailout to prevent a bankruptcy filing. Standard General previously provided bailout financing for American Apparel Inc. (NYSEMKT:APP).
According to the report from Bloomberg, Standard General was trying to help RadioShack find a way to avoid filing for Chapter 11 bankruptcy. If that report was true, the appointment of a bankruptcy expert like Etlin may cause some investors to think RadioShack may have given up and is planning to file bankruptcy after all.
