Toys R Us said to be preparing for liquidation
After scrambling to keep its bankruptcy reorganization plan alive, Toys R Us is preparing for liquidation, people who weren't authorized to speak publicly about the matter confirmed to USA Today Thursday.
The toy retailing giant appears to be running out of time, and money — pushing closer to having to close the doors of the entire chain. Its leaders have failed to find a buyer or reach a new debt financing deal with its lenders.
As word spread, shares of Mattel and Hasbro, two of the world's largest toymakers, fell in after-hours trading.
The company in recent weeks has told workers at its going-out-of-business sales that it doesn't have enough money to pay severance. Its United Kingdom division has been placed under administration — the U.K. version of bankruptcy — after falling behind on debt payments. It also reportedly is in talks to sell its Asian and European divisions.
A hearing scheduled for Bankruptcy Court has been postponed three times this week, signaling that the company's reorganization plan could be collapsing.
Sources expect the company to file for Chapter 7 bankruptcy liquidation next week. Toys R Us declined to comment.
Toys still could get a last-minute reprieve if a deep-pocketed investor or lender steps up.
After scrambling to keep its bankruptcy reorganization plan alive, Toys R Us is preparing for liquidation, people who weren't authorized to speak publicly about the matter confirmed to USA Today Thursday.
The toy retailing giant appears to be running out of time, and money — pushing closer to having to close the doors of the entire chain. Its leaders have failed to find a buyer or reach a new debt financing deal with its lenders.
As word spread, shares of Mattel and Hasbro, two of the world's largest toymakers, fell in after-hours trading.
The company in recent weeks has told workers at its going-out-of-business sales that it doesn't have enough money to pay severance. Its United Kingdom division has been placed under administration — the U.K. version of bankruptcy — after falling behind on debt payments. It also reportedly is in talks to sell its Asian and European divisions.
A hearing scheduled for Bankruptcy Court has been postponed three times this week, signaling that the company's reorganization plan could be collapsing.
Sources expect the company to file for Chapter 7 bankruptcy liquidation next week. Toys R Us declined to comment.
Toys still could get a last-minute reprieve if a deep-pocketed investor or lender steps up.