Next Week in Bankruptcy

Wednesday in Wilmington, Del., the corporate shell of what was once RadioShack will ask a judge to approve its plan to pay back creditors. RS Legacy’s lenders cut a deal that allows unsecured creditors to pursue damages against RadioShack’s former leaders over financing transactions that predated the retailer’s chapter 11 filing. Plan documents say secured lenders will get $60 million to $70 million, for a 100% recovery.

RadioShack has yet to say what general unsecured creditors owed $150 million to $250 million can expect from the potential lawsuits and other assets being set aside in trust for them. Creditors in the voting class that includes Salus Capital Partners are owed $80 million to $90 million, and it’s unclear how much of that debt RadioShack can repay. The hedge-fund manager made a $150 million loan to RadioShack, but the sale of the company only raised enough money to cover RadioShack’s top ranking loans.

Also on Wednesday, Patriot Coal will seek a Richmond, Va., bankruptcy judge’s approval of a restructuring plan that calls for the sale of its mines. The plan faces opposition from several groups, including the federal government, key creditors and the union representing its miners. One frequent question emerged from more than three dozen objections: Is Patriot’s plan to sell its mines to new owners feasible? Patriot’s official committee of unsecured creditors, a group that includes the miners’ union, don’t think so. Patriot has acknowledged the risk that the sales might not close, but it said the “compromises and transactions” at the heart of the plan are fair and provide the best possible recovery to creditors.

Thursday in Austin, Texas, Dune Energy Inc. will seek approval of a chapter 11 plan that would pay back creditors from the sale of the company’s oil and gas assets. Dune, which earlier this summer won approval to sell the assets to two other energy companies, plans to pay senior lenders owed $48 million with their share of the sale proceeds plus a so-called deficiency claim of $30 million. That claim, along with $68 million owed to second-lien lenders, will be paid as general unsecured claims.

The plan calls for the creation of a trust to pursue certain clawback lawsuits. In bankruptcy proceedings, a trustee can sue to claw back certain payments to businesses if the company can prove it was insolvent at the time it took on new liabilities.

The proceeds from those lawsuits are earmarked for Dune’s unsecured creditors. Such suits are often unsecured creditors’ best shot at seeing a recovery on their losses.

Depending on the outcome of the litigation, court papers estimate that unsecured creditors, owed a total of some $109 million, would recover about three cents on the dollar.

-Peg Brickley, Jacqueline Palank and Patrick Fitzgerald contributed to this article.

Write to Joseph Checkler at [email protected]. Follow him on Twitter at @JoeCheckler