Bankruptcy News

We've summarized the latest docket activity and news for publicly traded companies currently operating under U.S. Bankruptcy Court protection.

Bankruptcy/Chapter 11 / Bonds

Toys "R" Us Chapter 11 Petition Filed

Toys "R" Us and 24 affiliated Debtors filed for Chapter 11 protection with the U.S. Bankruptcy Court in the Eastern District of Virginia, lead case number 17-34665. The Company, which retails children's toys, games and apparel, is represented by Michael A. Condyles of Kutak Rock. Concurrent with the Chapter 11 filings, the Company also initiated Companies' Creditors Arrangement Act (CCAA) proceedings in the Ontario Superior Court of Justice. Toys "R" Us' operations outside of the United States and Canada, including its operations in Europe and Australia and its approximately 255 licensed stores and joint venture partnership in Asia, which are separate entities, are not part of the bankruptcy proceedings. The Company expects this process will enable it to restructure its outstanding debt, which will provide greater financial flexibility to invest in the continued growth of the Company and build on its current position. Toys "R" Us explains, " Although the Company has managed its complex, highly-leveraged capital structure by refinancing its debt obligations before they come due, the Company's cash debt service burden of approximately $400 million per year is unsustainable in the current competitive environment. As a result, the Company concluded that a comprehensive deleveraging would be required to allow the Company to right-size its balance sheet, make necessary investments, and maximize the long-term value of the business." Court-filed documents note, "The Company commenced these chapter 11 cases to address its near-term liquidity issues, longer-term capital needs, and accomplish a comprehensive reorganization that will enable Toys 'R' Us to turnaround and simply make better its business for the millions of Toys 'R' kids around the globe. This turnaround begins today." The Company has received a commitment for over $3.0 billion in debtor-in-possession financing from various lenders, including a JPMorgan-led bank syndicate and certain of existing lenders, which, subject to Court approval, is expected to immediately improve the Company's financial health and support its ongoing operations during the Court-supervised process.

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