Toys “R” Us Files for Chapter 11 Bankruptcy Protection

877d58a0-611f-478c-9dd6-ddca770cc5d6Toys “R” Us Inc. last night announced that the company and certain of its U.S. subsidiaries and its Canadian subsidiary have voluntarily filed for relief under Chapter 11 of the Bankruptcy Code in the U.S. Bankruptcy Court for the Eastern District of Virginia in Richmond, VA. In addition, the company’s Canadian subsidiary today intends to seek protection in parallel proceedings under the companies’ Creditors Arrangement Act (“CCAA”) in the Ontario Superior Court of Justice. Toys “R” Us intends to use these court-supervised proceedings to restructure its outstanding debt and establish a sustainable capital structure that will enable it to invest in long-term growth.

The company’s operations outside of the U.S. and Canada, including its approximately 255 licensed stores and joint venture partnership in Asia, which are separate entities, are not part of the Chapter 11 filing and CCAA proceedings.

The company’s approximately 1,600 Toys “R” Us and Babies “R” Us stores around the world continue to operate as usual. Customers should expect the company’s loyalty programs, including its Rewards “R” Us, Geoffrey’s Birthday List, and Babies “R” Us Registry, to continue as normal.

“Today marks the dawn of a new era at Toys “R” Us where we expect that the financial constraints that have held us back will be addressed in a lasting and effective way,” said Dave Brandon, chairman and CEO in a statement. “Together with our investors, our objective is to work with our debtholders and other creditors to restructure the $5 billion of long-term debt on our balance sheet, which will provide us with greater financial flexibility to invest in our business, continue to improve the customer experience in our physical stores and online, and strengthen our competitive position in an increasingly challenging and rapidly changing retail marketplace worldwide. We are confident that these are the right steps to ensure that the iconic Toys “R” Us and Babies “R” Us brands live on for many generations.”

Toys “R” Us has received a commitment for more than $3 billion in debtor-in-possession (“DIP”) financing from various lenders, including a JPMorgan-led bank syndicate and certain of the company’s 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. Toys “R” Us is committed to working with its vendors to help ensure that inventory levels are maintained and products continue to be delivered in a timely fashion.

Additional information can be accessed by Toys “R” Us’ restructuring website at www.toysrusinc.com/restructuring.

Kirkland & Ellis LLP is serving as principal legal counsel to Toys“R”Us, Alvarez & Marsal is serving as restructuring advisor, and Lazard is serving as financial advisor.

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    1. […] As previously announced on September 18, 2017, Toys “R” Us and certain of its U.S. subsidiaries and its Canadian subsidiary voluntarily filed for relief under Chapter 11 of the Bankruptcy Code in the U.S. Bankruptcy Court for the Eastern District of Virginia in Richmond, Virginia. In addition, the Company’s Canadian subsidiary sought and was granted protection in parallel proceedings under the Companies’ Creditors Arrangement Act in the Ontario Superior Court of Justice. Toys “R” Us intends to use these court-supervised proceedings to restructure its outstanding debt and establish a sustainable capital structure that will enable it to invest in long-term growth and fuel its aspirations to bring play to kids everywhere and be a best friend to parents. […]

    2. […] interim approval for all of Toys “R” Us Inc.’s first day motions related to its Chapter 11 restructuring. Collectively, the orders granted by the Court at a hearing on Sept. 19 will help ensure that the […]