Jump to Navigation

Toys R Us planning a comeback

One of the most publicized bankruptcies of the summer was the decision by Toys R Us to end its business operations. Perhaps because so many people had beloved memories of visiting the stores with their parents, the business bankruptcy filing struck an emotional nerve in eastern Tennessee and other states. Now, the company's secured creditors have announced plans to attempt to resuscitate the brand.

Toys R Us was being crushed by $5 billion in debt and stiff competition from Amazon.com, Target and Walmart when its management decided to liquidate the company. The bankruptcy filing led to the closing of 800 stores and the loss of 30,000 jobs. The bankruptcy had an effect throughout the toy industry, including the decision by Mattel to trim 2,200 jobs because of lost sales to Toys R Us.

The company had originally planned to liquidate its assets by selling them to the highest bidders, using the proceeds to pay off creditors. After receiving and studying a number of qualifying bids, a group of secured lenders said they can receive a higher return on their investments by reviving the chain than they could by selling individual assets.

The investors said that they would work with potential partners to develop new ideas for stores in the United States and other countries. The investors did not provide any details about their plans for the revived company.

The decision of the Toys R Us investors to resuscitate the company shows that filing a bankruptcy petition is not necessarily the end for a business. The separate sale of assets rarely produces a significant return on asset value when compared with either sale of the entire entity or reviving business operations. Even small businesses may benefit from a well-thought-out plan to restore operations, making it important to understand the process and one's rights throughout and after the process is complete..

No Comments

Leave a comment
Comment Information

What's Your Situation:

Bold labels are required.

Contact Information

The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form.

Subscribe to This Blog's Feed Visit Our Bankruptcy Website

Our Office Location:

Richard Banks & Associates

393 Broad Street, N.W.
Cleveland, TN 37364-1515
Map & Directions

Phone: (423) 244-0009
Toll Free: (866) 596-8527
Fax: (423) 478-1175

FindLaw Network

Privacy Policy | Business Development Solutions by FindLaw, part of Thomson Reuters.