9-year-old urges bankrutpcy court to save Toys R Us – USA Today – USA TODAY
The bankruptcy of Toys ‘R’ Us weakened Hasbro’s forecasts for the holiday season. But as Fred Katayama reports, the retailer released strong earnings.
Video provided by Reuters
Toys R Us and its creditors told a U.S. Bankruptcy Court judge on Tuesday that they will work together and share a common goal of keeping the struggling retailer alive.
As if to underscore what is at stake, the hearing included the airing of a letter from a 9-year-old sent to the judge in the judge overseeing the chain’s Chapter 11 reorganization urging that it be saved.
In the letter, Andrew says kids would rather be promised a trip to Toys R Us than any other store.
Toys R Us received court approval for a number of motions and amended motions that allow it to operate its business while it restructures. U.S. Bankruptcy Judge Keith Phillips, in a hearing held in Richmond, Virginia, praised creditors and Toys R Us for reaching agreements on the motions in advance of the court date.
“I am pleased everyone seems to be working together,” Phillips said, adding that he hopes the cooperation will continue.
Attorneys for the various creditor groups said their clients realize that it is vital that Toys R Us have a healthy holiday season this year.
A new augmented reality app will allow young Toys ‘R’ Us shoppers to unlock activities around the store.
Joshua Sussberg, one of the attorneys representing Toys R Us, opened the hearing by giving Phillips an update on where the company stands six weeks after filing for bankruptcy.
Toys has secured $3.2 billion of financing that it plans to invest in making its stores and operations better while restructuring its balance sheet, Sussberg said.
He also made an impassioned argument that kids, and the world, need Toys R Us.
“Toys R Us is the only toy showroom in the world,” Sussberg said. He referred to a letter that a 9-year-old boy, identified only as Andrew, sent to Phillips, asking that the Toys R Us stores be kept open.
“No kid’s asking for the opportunity to go to Walmart,” Sussberg said. “No kid’s asking for the opportunity to go to Target,” he said, referring to Toys’ two biggest competitors for sales.
Thanks to the $3.2 billion in bankruptcy financing, and the cooperation of the vendors, Toys R Us is better prepared than ever for the holiday season, Sussberg said. The stores are well stocked with all of the hot holiday toys, and the company has $810 million of liquidity as it heads into its peak season, he said.
The hearing Tuesday, despite the spirit of cooperation, did contain some signs that all will not be fun and games as Toys works its way through the bankruptcy process. Attorneys for creditors groups said they plan to hold Toys to its promise to be open and transparent with them while restructuring its business.
And one of the motions approved was an order to retain A&G Realty Partners LLC, a Long Island-based firm that is known for helping distressed retailers dispose of store leases, as its real estate adviser. A&G has helped Sports Authority, Delia’s, Radio Shack and other retailers market their stores after bankruptcy or liquidation.