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(Bloomberg) — RadioShack Corp.’s proposal to sell more than 1,700 store leases to its biggest shareholder will face another day in court as witnesses line up to support or fight the bankrupt electronics retailer’s proposal.Thursday in Delaware, lawyers for plan opponent Salus Capital Partners LLC called this week’s asset auction a “sham” and said bidding should be reopened because their client wasn’t given an opportunity to review the final bid. Anthony Clark, a lawyer for Salus, told David Kurtz of Lazard Ltd., who advised the electronics chain, that “there was a decision today by the debtor and advised by yourself to bring down the gavel on the auction.” “Did somebody discuss that with Salus?” Clark asked.“Yes,” replied Kurtz, the head of restructuring at Lazard. “We told them on Tuesday we would be doing exactly this.” The winning bid by hedge fund Standard General LP includes a “number of significant revisions and improvements,” the retailer said in court papers Thursday. A group of liquidators were named the backup winners. The “economics of the transaction” have increased by about $17.6 million and intellectual property and customer data have been excluded, RadioShack said. The offer includes a “credit bid” of as much as $112 million, meaning Standard General would cancel that much of RadioShack’s secured debt in lieu of paying cash.

Sprint Deal

The Fort Worth, Texas-based electronics chain entered bankruptcy in February with a plan to have an affiliate of Standard General take over as many as half its locations in a co-branding arrangement with Sprint Corp. RadioShack said Standard General’s final offer covers 1,743 stores and will save 7,000 jobs. The hearing on whether to approve the transaction is to resume Friday at 8:30 a.m. in Wilmington. Salus has attacked the auction process and said Standard General was offering too little cash for the assets, leaving smaller recoveries for other creditors. Salus asked U.S. Bankruptcy Judge Brendan Shannon to cap the credit bid at $111 million, saying that’s the amount of the hedge fund’s loans to RadioShack that have eligible claims on the retailer’s current assets. “It was late in the game for the court to change the rules,” Shannon said Thursday. “I ruled and the proceeding moved forward.” The judge didn’t rule on the request to restrict the credit bid.The case is In re RadioShack Corp., 15-10197, U.S. Bankruptcy Court, District of Delaware (Wilmington).

–With assistance from Phil Milford in Wilmington, Delaware.

To contact the reporter on this story: Dawn McCarty in Wilmington, Delaware at dmccarty@bloomberg.net To contact the editors responsible for this story: Andrew Dunn at adunn8@bloomberg.net Michael Hytha