The U.S. Bankruptcy Court for the Eastern District of Virginia entered a final order granting Toys “R” Us authority to access the full amount of its more than $3.0 billion in debtor-in-possession (DIP) financing. The court also granted final approvals for the company’s “First Day Motions” intended to support the business, including continuing to pay employee wages and benefits, honoring customer programs, and paying foreign vendors in full for all goods and services under normal terms.
“During this highly competitive time of the year, our teams know that we have to be totally bold and different. I won’t give away all our plans just yet but shoppers should know about our improved layaway program—with a daily lottery giveaway; parents-only late night shopping events; and a Price Match Promise where we’ll donate $1 to Toys for Tots for every price match we do over Holiday,” says Dave Brandon, chairman and chief executive officer of Toys “R” Us.
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.
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.
