WILMINGTON, DE—A federal judge in US Bankruptcy Court here on Wednesday approved hedge fund Standard General LP as the lead bidder for between 1,700 and 2,000 of the 4,000 RadioShack stores, a lower ceiling than the 2,400 locations initially announced. The auction has been slated for March 23; the Fort Worth-based retailer's largest shareholder, Standard General LP plans to cobrand the stores with wireless operator Sprint, which would establish a store-within-a-store at these locations.

The Wall Street Journal reported that Standard General was approved as opening bidder after it made concessions to creditors. Separately, the hedge fund has also offered $20 million to buy the rights to the RadioShack name.

Under the plan announced when RadioShack Corp. and certain subsidiaries filed for Chapter 11 protection on Feb. 5, Sprint would occupy about one-third of the space at each retail location. Sprint employees will sell mobile devices and plans on all Sprint brands, including Boost and Virgin Mobile. Sprint will be the primary brand on storefronts and in marketing materials for these locations, which would more than double the wireless company's current store count.

In approving procedures for a sake of RadioShack stores, fixtures and inventory, General as lead bidder, US Bankruptcy Judge Brendan Shannon agreed with the creditors' committee that the bidding rules can't unfairly shorten the amount of time that that panel has to investigate details of the debt held by Standard General, Bloomberg Business reported. The rules proposed initially would have cut short the committee's right to challenge the legitimacy of some of Standard General's debt, which it's seeking to swap for ownership of RadioShack assets during the auction.