WILMINGTON, Del. (Legal Newsline) – A Delaware court has ruled both in favor of and against motions filed by both parties in a dispute involving the former RadioShack and Sprint.
On Oct. 25, Judge Paul R. Wallace both granted and denied in part a motion to dismiss by Sprint Solutions Inc. as well as a counterclaim submitted in Superior Court of the state of Delaware by the GWO Litigation Trust Inc., which represents the former RadioShack stores.
GWO Litigation Trust is the successor of General Wireless Operations. The company was created to "acquire the strongest parts of RadioShack's business from bankruptcy and to revitalize the retailer," according to the ruling.
GWO filed seven counts against Sprint alleging "two counts breach of contract, one count of the breach of implied covenant of good faith and fair dealing, misappropriation of trade secrets, conversion, unfair competition, and tortious interference with perspective business relations."
According to the filing, Sprint moved to dismiss all but the breach of contract allegations.
Wallace ruled in favor of GWO's request to dismiss Sprint's amended counterclaims and third-party plaintiff eWireless' claims in regards to the breach of implied covenant allegation, but denied a request to dismiss the indemnification claim, breach of contract by rejection and eWireless' third-party claim.
In his ruling, Wallace also granted and denied counterclaims filed by Sprint.
Sprint filed a counterclaim against GWO alleging five counterclaims: "two counts of breach of contract, one for declaratory relief regarding limitation of liability, an attorney's fees request under the Delaware Uniform Trade Secret Act for a bad faith claim of trade secret misappropriation and an indemnification claim," the ruling states.
GWO moved to dismiss three of Sprint's counterclaims.
Wallace ruled to grant and deny in part Sprint's motion to dismiss GWO's breach of the implied covenant count; granted dismissal of the conversion, unfair competition and tortious interference with prospective business relations; and denied dismissal of the misappropriation of trade secret claim.
According to the ruling, GWO filed for breach of contract and other claims in June 2017 after RadioShack went bankrupt. According to the court ruling, Sprint was to pay $17 million to GWO according to March 2017 settlement agreement. However, a portion of that payment, $5 million, was contingent upon creditors agreeing to the mutual releases between GWO and Sprint.
Sprint Solutions and General Wireless Operations entered into a series of contracts in an attempt to revitalize failing RadioShack stores in March 2015. The plan was to create unified RadioShack/Sprint cellular locations, or Store Within A Store (SWAS).
GWO and Sprint officially entered into an agreement in April 2015.
However, the expansion plan failed and didn't produce the market results as predicted. GWO argued that there was a diversion of customers and a lack of employee training.