Trading was halted this morning in Radio Shack (RSH) after Salus Capital issued a notice claiming that the troubled retailer had breached covenants on a $250 Million loan.
Radio Shack had warned in September that it might need bankruptcy protection. CEO Joe Magnacca said in a statement this morning that “”Prompted by their narrow self-interest, they appear to be trying to manufacture a problem during the critical holiday shopping season in an effort to get out of a loan.” RSH says it “intends to vigorously contest the claims.”
Trading was halted at 10:03 am. Radio Shack has been at risk of delisting since it fell under $1 in September. Before trade was halted, RSH had fallen to 77 cents.
UPDATE: Trading resumed near 3pm with a precipitous drop to 63 cents. The stock dropped as low as .611 before recovering to close at 72 cents, down just over 8% for the day.
