The top lenders of Toys "R" Us have decided to cancel the bankruptcy auction of its brand name and other intellectual property assets and instead plan to revive the Toys "R" Us and Babies "R" Us brand names, a court filing on Monday showed.
The bankrupt retailer’s debtors aim to open a new Toys "R" Us and Babies "R" Us branding company that maintains existing global license agreements and can invest and develop new retail shops.
The lenders also plan to expand its international presence and further develop its private brands business. The bids were not superior to the plan to revive the brand as it did not offer “probable economic recovery” to creditors as well as benefits to stakeholders who would maintain the brands under the new independent U.S. business, the court filing showed.
Toys “R” Us filed for Chapter 11 bankruptcy protection in September last year, hoping to restructure some $5-billion in debt, much of which stemmed from a $6.6-billion leveraged buyout by private equity firms in 2005. But the company changed course in March, saying it would sell its operations in Canada, Asia and Europe, and shut down in the United States.
Under the intellectual property auction, the company had planned to sell its assets, including the brand names of Toys "R" Us, Babies "R" Us, registry lists, website domains, Geoffrey the Giraffe and other assets.