Former Toys “R” Us executives are set to stand trial over allegations they misled suppliers about the retailer’s dire financial condition while the company tried to stay afloat in bankruptcy and then stiffed them on more than $600 million of bills, Bloomberg News reported. Bankruptcy Judge Keith Phillips on Monday said a trial should go forward, rebuffing a request from the former executives to throw out the creditor claims entirely. The former directors and officers have denied wrongdoing. Open questions, according to the judge, include whether the retailer was already insolvent when it paid nearly $18 million to its private-equity backers — Bain Capital, KKR & Co. and Vornado Realty Trust — between 2014 and 2017. The creditors also allege that millions of dollars of bonuses paid to 117 Toys “R” Us executives and managers just prior to the company’s 2017 bankruptcy amount to a breach of the former executives’ fiduciary duty. The largest bonus — $2.8 million — went to former Chief Executive Officer David Brandon. An official committee of low-ranking creditors later negotiated a reduction in the bonus amounts, according to court papers.
