The well-known toy store Toys R Us, which has stores in Massachusetts and several other states, has decided to file for bankruptcy protection. The announcement of the Chapter 11 bankruptcy filing came on a recent Monday. The filing will help the store to relieve itself of debt remaining from other parties’ acquisition of it back in 2005.
The parties that acquired Toys R Us include a real estate investment trust called Vornado Realty Trust, Kohlberg Kravis Roberts and Bain Capital Partners. The deal was valued at more than six billion dollars. Toys R Us currently has almost $5 billion in debt, with $1.7 billion of it being due in 2017. Meanwhile, $400 million of the debt features interest payments that are due next year.
The company’s CEO said the bankruptcy filing will enable the company to finally address its financial constraints for good. These constraints have reportedly been holding the company back, and now, the company will be better able to move forward and remain in existence for future generations. As part of its bankruptcy filing, the company reported that it will keep operating as usual at its 1,600 Babies R Us and Toys R Us stores worldwide.
Sometimes, a company’s liabilities end up outweighing its assets, and the company can find no way of breaking free from its debt. In these situations, filing for Chapter 11 bankruptcy protection may be the company’s best option for achieving financial freedom. An attorney can help businesses in Massachusetts to get rid of their debt burdens and put themselves in a position to succeed long term.
Source: cnbc.com, “Toys R Us files for Chapter 11 bankruptcy protection“, Lauren Hirsch, Sept. 18, 2017