With the auction bids not being superior to the plan of reviving the plan, creditors and stakeholders are of the view that reviving the Toys ‘R’ Us and Babies ‘R’ Us brand is the best way forward.
In a significant development, the leading creditors of Toys ‘R’ Us have decided to cancel the bankruptcy auction of its brand name and other intellectual property assets and instead plan on reviving the Toys ‘R’ Us and Babies ‘R’ Us brands, showed a court filing on Monday.
The lenders also plan on expanding he international presence of the brands and further develop it.
According to documents filed in court, the bids in the auction were not superior to the plan to revive the brand and it did not offer “probable economic recovery” to creditors as well as benefits to stakeholders who would maintain the brands under the new independent U.S. business.
In September 2017, Toys “R” Us filed for Chapter 11 bankruptcy protection hoping to restructure nearly $5 billion in debt, much of which stems from a $6.6 billion leveraged buyout by private equity firms in 2005.
However in March 2018, it changed strategy and said it would sell its operations in Europe, Asia and Canada and close its U.S. operations.
Under the intellectual property auction, the company had planned to sell its assets, including the brand names of Toys ‘R’ Us, Babies ‘R’ Us, registry lists, website domains, Geoffrey the Giraffe and other assets.