Buyers of Radio Shack, Pier 1 Imports and other brands accused of running $112 million Ponzi scheme
www.cbsnews.com
The buyers of distressed brick-and-mortar companies like RadioShack and Modell's Sporting Goods, are accused of running a Ponzi scheme.
    • PhilipTheBucket@piefed.socialOPEnglish
      6·
      2 days ago

      “Consequently, in order to pay interest, dividends and maturing note payments, Defendants resorted to using a combination of loans from outside lenders, merchant cash advances, money raised from new and existing investors, and transfers from other portfolio companies to cover obligations.”

      You know, just some sparkling investment fraud

      • chiocciola@lemmy.cafeEnglish
        2·
        2 days ago

        What makes it a Ponzi scheme is that they intended to defraud investors. This sounds more like a bunch of idiots who had to borrow from Peter to pay Paul.

        • PhilipTheBucket@piefed.socialOPEnglish
          3·
          2 days ago

          The SEC’s suit alleges that between 2020 and 2022, Mehr and Lopez, “made material misrepresentations” to hundreds of investors about the bankrupt retailers they had acquired. For example, to entice individuals to invest in their acquisitions, they said their portfolio companies were “on fire” and that “cash flow is strong.” They also told prospective backers that money raised for a company would only be invested in that specific firm. That proved not to be the case

          Of course, who knows whether it is true, although it sounds plausible. But absolutely it sounds like they intended to defraud investors.

  • SanctimoniousApe@lemmings.world
    1·
    2 days ago

    REV acquired RadioShack in 2020, three years after the nearly century-old electronics chain filed for its second bankruptcy. RadioShack first filed for Chapter 11 protection in 2015. In 2023, Unicomer Group acquired RadioShack, and in 2024, relaunched it as an e-commerce platform. RadioShack’s current owners are not named in the lawsuit.

    So Radio Shack was the first store named simply for clickbait as it currently has nothing to do with these guys. Classy, CBS.

    • PhilipTheBucket@piefed.socialOPEnglish
      3·
      2 days ago

      REV was accused of buying a bunch of semi-worthless businesses and then pumping up their value in various ways from 2020 to 2022. During the time of the alleged behavior, they owned Radio Shack, and their ownership of it was involved in the alleged malfeasance it sounds like.

      The fact that after all was said and done, they sold it, doesn’t really have a lot of bearing on what they were or weren’t doing with it years before, when they did own it.