Radio Shack stock shares have dropped more than 20 percent following allegations of breached covenants on a $250 million term loan from lender Salus Capital.
"We will do everything we can to assure that these claims do not distract us from our ongoing efforts to rationalize our capital structure and transform our business," said RadioShack CEO Joe Magnacca in a press release, according to CNBC.
"This is particularly disturbing in light of meaningful steps we have taken in our turnaround plan, as well as the recapitalization steps announced in October."
Although the electronics equipment chain was eyeing the closure of over 1,000 stores around the world in an effort to consolidate profitability, the lender rejected the proposal.
Financial analysts have suggested the company is in its last throes, citing declining sales and investment confidence.
Last month it was announced that Radio Shack agreed to a financing package from the Standard General LP hedge fund as an attempt to boost sales during the holiday season. The company owns 10 percent of its stock shares.
"It appears to us that the term lenders seek only to advance their particular interests at the expense of all other RadioShack stakeholders and will oppose any common sense business move requiring their consent unless the company agrees to their exorbitant demands," Magnacca added, according to CNBC.
