RadioShack update: User data is safe for now, while Sprint co-branding is in the works

The user data could still be sold someday, though, and the union of two troubled companies may or may not pay off.

The latest chapter in RadioShack's bankruptcy drama brings a bit of good news for past customers and current employees.

For now, RadioShack has agreed not to auction off its trove of more than 65 million customer names and mailing addresses and 13 million email addresses, the Dallas Business Journal reports. The customer data appeared to be up for grabs as part of RadioShack's asset sale last month, in which hedge fund Standard General was the high bidder.

The proposed data sale prompted several legal challenges. Texas Attorney General Ken Paxton argued that RadioShack would violate state privacy laws by going back on its word not to sell customer data. AT&T also challenged the sale, as it offered wireless service through RadioShack and didn't want its customer data falling into a competitors' hands.

According to Dallas Business Journal, RadioShack needed a finalized sale to avoid paying April rent, and the legal objections could have caused delays. In other words, the data sale isn't permanently off the table.

Meanwhile, AT&T's fears weren't unfounded. With the rest of the asset sale approved by the court, Standard General now plans to keep RadioShack's 1,740 remaining stores up and running in a co-branding deal with Sprint. It's not the prettiest marriage--Sprint itself is losing money, and dragging down parent company Softbank--but it will keep roughly 7,500 people employed for the foreseeable future.

Why this matters: News of the possible data sale caused some outrage last month, especially because RadioShack was notorious for demanding contact information from customers while promising never to sell it. But it may be a moot point if RadioShack's stores remain open under the new ownership. The retailer will have much bigger problems on its hands, as it will need to win back electronics shoppers while being shackled to a wireless carrier that has plenty of its own issues.

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