It’s Over for Toys ‘R’ Us: Liquidation Next
by Wolf Richter
WolfStreet.com
Mar 8, 2018
Toys ‘R’ Us, after it filed for Chapter 11 bankruptcy last September to restructure its debts, vowed that it would go on as a company and not even close any stores. It blamed the media for having caused this problem by reporting that it had hired a bankruptcy law firm. This piece of information had, it said, caused about 40% of its suppliers to halt shipments just before the crucial holiday selling period. So it had to seek bankruptcy protection, it said. Going forward, it would try to renegotiate its debts or try to find a buyer. But none of it worked out.
The company, at the time of it bankruptcy filing, had about 1,700 stores globally, with about 800 in the US under the Toys ‘R’ Us and Babies ‘R’ Us brands. It also had $5.2 billion in long-term debt and negative equity of $1.3 billion. In other words, what was left at the time was just a hollowed-out shell.
Today it was leaked that the company is preparing for liquidation in the US as it couldn’t find a buyer and couldn’t get the creditors to agree to take massive haircuts in a restructuring deal. It plans to close and liquidate all its operations in the US, “people familiar with the matter” told Bloomberg:
While the situation is still fluid, a shutdown of the U.S. division has become increasingly likely in recent days, said the people, who asked not to be identified because the information is private. Hopes are fading that a buyer will emerge to keep some of the business operating, or that lenders will agree on terms of a debt restructuring, the people said.
The Rest…HERE
