Purchasers of Unredeemed Gift Cards to be Paid in Full
Texas Attorney General Ken Paxton today announced a settlement with electronic retailer RadioShack over unredeemed gift cards has been approved by a bankruptcy judge. The settlement agreement was supported by 23 other states and the District of Columbia.
“This settlement has given consumers a voice in RadioShack’s bankruptcy process, and we are pleased the retail giant is honoring its commitment to customers holding millions in unredeemed gift cards,” Attorney General Paxton said. "We hope this agreement will serve as a model for future settlements in other retail bankruptcy cases."
“Today’s settlement agreement confirms that consumers can have their voice heard even in large bankruptcy cases, and that former RadioShack customers will be treated fairly in the bankruptcy process,” said Assistant Attorney General Hal Morris, lead attorney on the case.
Under the settlement agreement, consumers will be paid in full for purchased unredeemed RadioShack gift cards, which includes cards purchased in-store or at other retailers. Merchandise returns and certain promotional gift cards that do not qualify as "priority" claims under applicable bankruptcy law will be paid as general unsecured claims, and will likely not receive full payment.
A supplemental agreement is being negotiated in which all holders of unredeemed RadioShack gift cards would have the option to redeem their cards at RadioShack stores run by General Wireless, which bought 1750 stores out of the bankruptcy. This will be heard by the bankruptcy court on September 16.
Purchasers whose email or postal addresses are part of RadioShack’s records will receive notice via email or post card with instruction on how to file a claim. In addition, an online ad campaign will notify consumers of the claims process.
Supporting Texas in the settlement agreement are: Arizona, Arkansas, District of Columbia, Florida, Georgia, Hawaii, Illinois, Indiana, Maine, Maryland, Massachusetts, Missouri, Nevada, New Hampshire, New York, North Dakota, Ohio, Oregon, Pennsylvania, Rhode Island, Tennessee, Virginia, Washington and West Virginia.
Consumers will have a full 12 months to file a claim, and may do so online.