RadioShack emerges as buyer of Battery Plus

In an eleventh-hour twist, RadioShack Canada has emerged as the buyer of insolvent retailer Battery Plus Inc. During a hearing in Ontario Superior Court yesterday to approve the sale of Battery Plus, the lawyer representing the interim receiver disclosed that the bidder, Leap Energy and Power Corp., intends to sell the company to an undisclosed third party. Sources told The Star that Leap will assign the purchase to InterTan Canada Ltd., which operates the RadioShack Canada chain.

The Toronto Star
February 6, 2002

RadioShack emerges as buyer of Battery Plus
Most creditors approve sale or won't dispute it
Steven Theobald

In an eleventh-hour twist, RadioShack Canada has emerged as the buyer of insolvent retailer Battery Plus Inc.

During a hearing in Ontario Superior Court yesterday to approve the sale of Battery Plus, the lawyer representing the interim receiver disclosed that the bidder, Leap Energy and Power Corp., intends to sell the company to an undisclosed third party.

Sources told The Star that Leap will assign the purchase to InterTan Canada Ltd., which operates the RadioShack Canada chain.

Leap's financial backers are Pennsylvania-based Winner International Corp., makers of The Club auto antitheft device, and Toronto-based Covington Capital Corp.

InterTan will likely retain the Battery Plus banner and, as part of the transaction, work out a distribution deal for Leap's line of rechargeable batteries, a source said.

InterTan was one of five parties to submit formal bids for Battery Plus but Leap's $5 million offer was deemed the highest and is being recommended by court-appointed interim receiver Deloitte & Touche Inc.

Harvey Chaiton, representing Deloitte, argued that the side deal with InterTan is perfectly legal and he stressed Leap has signed a binding agreement that included a $500,000 deposit.

Laurentian Bank of Canada, owed $6.8 million, petitioned Battery Plus into receivership in November.

Battery Plus's former owner, Antoine Chahine Badr, has initiated a $40.5 million legal challenge against Laurentian and Deloitte for alleged improper actions before and during the insolvency.

Badr's lawyer, Mel Solmon, was in court yesterday attempting to postpone the approval process.

He also asked Mr. Justice James Spence to remove himself from the case, citing a pending appeal launched against a previous Spence ruling.

Alan Mark, representing landlord Cadillac Fairview Corp., argued that Solmon was merely "judge shopping" because Solmon already had lost a decision made by Spence.

More to the point, Badr is not offering to produce a white knight to top Leap's offer, noted Deloitte's Chaiton. "Attempts by Badr to block this sale are well documented."

Lawyers for all the major secured creditors, with the exception of Domenick Bellisario, who submitted an offer to buy Battery Plus, told Spence they either approve of the sale to Leap or won't challenge it.

Badr has no economic interest in the sale, argued Aubrey Kauffman, representing Laurentian Bank. "He's totally out of the money."

Solmon countered by saying Badr does have a stake in the outcome because Badr has pledged personal holdings, including his home, as collateral for the defaulted loans.

Those assets will be "subject to Laurentian Bank attack," Solmon said.

He argued that Deloitte acted "dishonestly" and refused to provide Badr with all the documents and other information needed to examine the sale process.

Cadillac Fairview's Mark questioned Solmon's motives since no alternative buyer is being offered. "There is mischief afoot here."

Spence refused Badr's application to postpone the approval process and won't remove himself from the case.

Spence suggested Badr's delaying tactics were motivated by his $40.5 million suit against Laurentian and Deloitte.

"There have been enough delays in this matter," Spence said.

The approval process to sell Battery Plus to Leap will continue tomorrow.


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