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JPMA Credit Update - Toys "R" Us Files Chapter 11

Tuesday, October 3, 2017  
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Toys“R”Us, Inc. 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 (9/19). In addition, the Company’s Canadian subsidiary voluntarily commenced parallel proceedings under the Companies’ Creditors Arrangement Act (“CCAA”) in Canada in the Ontario Superior Court of Justice (9/20). 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 Association previously has acted to coordinate and promote the interest of Trade Creditors in a number of previous Retail. Since JPMA also has a number of members that are trade creditors of Babies R US, we will work to assure their interests are duly considered. As a practical matter there exist common interest in assuring the interests of the Trade Class are protected in the process and that distributions are fairly apportioned. Currently, the Debtor has a strong interest in assuring receipt of goods from vendors and will favor procedures in bankruptcy that allow it to continue to receive and pay for supplies from its vendors, reorganize to shed unprofitable leaseholds and restructure burdensome bond debt loads.

 

Part of the process will be to coordinate information from TRU and the Unsecured Creditors Committee when empaneled by the Court Appointed Trustee. Channels of Communication between TRU, the Committee and membership will be enhanced in the near future.

 

Toys“R”Us has stated it intends to use this court-supervised process to restructure its outstanding debt and establish a sustainable capital structure that will enable it to invest in long-term growth. The Company’s Toys“R”Us and Babies“R”Us stores around the world are operating as usual. Customers can also continue to shop for the toy and baby products they are looking for online on the Company’s newly launched www.toysrus.com and www.babiesrus.com web stores.

 

The Company intends to pay vendors in full under normal terms for goods and services delivered on or after the filing date. As the Company’s international subsidiaries are not part of the Chapter 11 filings and CCAA proceedings, Toys“R”Us’ international subsidiaries will pay vendors for all goods and services in the normal course.

 

Toys “R” Us’ case has been assigned to Judge Keith L. Phillips and Case No. 17-34665. The Docket can be accessed on this website or through the website maintained by the United States Bankruptcy Court for the Eastern District of Virginia. Toys “R” Us has also received approval for its DIP financing and to  continue its business per several Court motions, including authorization to pay foreign and critical suppliers. Under the revised Bankruptcy Code, trade Creditors can receive administrative priority status for payments for goods received 20 days prior to the filing and after the filing.

 

For additional information about the restructuring process, including frequently asked questions, please visit the Toys“R”Us Restructuring website. For information regarding the Company’s CCAA proceedings, please visit the CCAA Monitor site. The Monitor will also have a hotline at 1-855-747-2648JPMA will be working with similarly situated trade Creditors to provide members with periodiccredit updates related to the Bankruptcy.


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