According to the U.S. Bankruptcy Court docket, Salus Capital Partners, as agent for the SCP lenders, filed a limited objection to RadioShack’s official committee of unsecured creditors’ motion to retain Houlihan Lokey Capital as financial advisor and investment banker.
The objection explains, “To be clear, Salus takes no issue with Houlihan’s qualifications as a financial advisor or investment banker or with the Committee’s retention of Houlihan as the Committee’s financial advisor. Salus objects to the Houlihan Application on a limited basis because the Committee failed to carry its burden of establishing that the proposed Deferred Fee and Monthly Fees satisfy the reasonableness standard for approval under Bankruptcy Code section 328(a).”
The objection continues, “Salus respectfully submits: (a) that it makes no sense to burden the Debtors’ estates with up to a $1,500,000 administrative expense for nothing more than having the Debtors close a 363 sale to a stalking horse bidder – particularly when such bid was substantially negotiated before Houlihan’s involvement, and (b) that such payment would constitute an unauthorized use of cash collateral. Similarly, the Committee’s attempt to burden the Debtors’ estates with the $250,000 Monthly Fees is unreasonable (and surprising), given that any recovery by its own constituents – general unsecured claimants – is uncertain at best.”
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