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Sprint is getting sued for sabotaging RadioShack’s comeback

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Radio Shack Declares Bankruptcy Photo by Drew Angerer/Getty Images

RadioShack is going down swinging. With nearly all of its stores now out of business, the retailer’s creditors have sued Sprint and are accusing the wireless carrier of backstabbing RadioShack and destroying any hope of a great American comeback story. The creditors are seeking $500 million in damages, according to Reuters, and are alleging that Sprint used a co-branding partnership formed between the two companies in 2015 to its own selfish benefit — and to RadioShack’s eventual doom.

That was back when RadioShack had freshly emerged from bankruptcy and was oddly hopeful that adding Sprint (by then the fourth largest US carrier) to its stores could somehow help turn things around and hold off the hand of fate. In this case, that’s the hand of Jeff Bezos and internet shopping.

It didn’t work. RadioShack couldn’t escape the fall back into bankruptcy and eventually threw in the towel. Throughout May, the company held everything must go liquidation sales to get rid of all that was left — shelving included — in nearly all of its remaining stores.

Now, the company’s creditors are saying that Sprint took advantage of the partnership by using confidential data to pinpoint the best locations for Sprint’s own retail stores. Wherever RadioShack-Sprint was performing well, Sprint would open a separate location. The carrier also failed to hold up its end of the bargain when it came to providing staffing and inventory, according to the complaint. “Sprint’s action destroyed nearly 6,000 RadioShack jobs,” said the lawsuit, which was filed in Delaware Superior Court on Wednesday.

Sprint has said it will fight the lawsuit and is disappointed with the creditors’ decision to start a legal battle.