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More than 50 suppliers, including Barbie maker Mattel <MAT.O>
and Lego, have objected in some form to the proceedings by the
storied toy retailer to shutter up to 735 U.S. stores and 30,000
jobs.
Some suppliers are demanding the company return any unpaid
inventory rather than selling it and using going out of business
sales to pay secured lenders and bankruptcy lawyers, at their
cost, court papers showed.
Even as Toys 'R' Us liquidates in the United States, it is
trying to maintain business-as-usual in Canada, Europe and Asia,
where it hopes to find a buyer.
On Tuesday, the company will ask U.S. Bankruptcy Judge Keith
Phillips in Richmond, Virginia to approve a March 26 deadline
for bids followed by an auction on March 29.
It is also seeking approval for a series of U.S. liquidation
procedures including a halt to more than $450 million in
supplier payments as part of a plan that experts told Reuters
could cause many small toy makers to disappear.
Toys 'R' Us was the last remaining specialty toy retailer in the
United States and hundreds of companies relied on its big-box
stores as a showcase for both innovative toys as well as
classics.
Under trade agreements, vendors were required to ship goods to
Toys 'R' Us on unsecured trade credit.
In a court filing, Lego said any "wind-down must be implemented
in a manner that is fair and equitable to all" of the company's
creditors.
The U.S. Trustee, a bankruptcy watchdog, has also objected,
saying that while it is "resigned" to the company's future, it
is concerned about certain of the procedures and relief proposed
as part of the liquidation.
(Reporting by Tracy Rucinski; Editing by David Gregorio)
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