Toys “R” Us Inc. is winding down its business, but the retailer still has a lot of moving parts to deal with before it closes its doors in the U.S. for good, WSJ Pro Bankruptcy reported. At a hearing in the U.S. Bankruptcy Court in Richmond, Va. on Tuesday, Toys “R” Us’s lawyers mapped out the end game for the company. The company’s recent focus has been on reaching a resolution with merchandise vendors, a group that stands to lose approximately $800 million as a result of Toys “R” Us’ rapid liquidation. The vendors are posing an obstacle to Toys “R” Us’ wind-down procedures, filing numerous objections as the likelihood of receiving payments remains unclear. Toys “R” Us attorney Joshua Sussberg said yesterday that it’s still unclear how these vendors will be paid, but the company has been in discussions with vendors, creditors and lenders in hopes of reaching a global resolution. Compromises have already been reached as the groups work toward a resolution, court papers show, although any deals are still subject to court approval. Among the compromises, the retailer has proposed that “at least some funds will be carved out and set aside” for the benefit of the post-bankruptcy merchandise vendors. In addition, the carve out — somewhere between $150 million to $160 million — comes without releases of past, present or future claims against the company, management, lenders or other interested parties.
