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The same Toys "R" Us have been taking care of their role in the decision to liquidate the company.
In a bankruptcy court filing Monday, the funds that now control Toys "R" Us said they'd canceled the company's intellectual property. Instead, they are seeking to reorganize the assets of the company and to maintain them.
Maintaining the brands under a new independent U.S. business is the best option with respect to the recovery of the Toys "R" Us estate, as well as the benefit of other indirect and direct stakeholders, according to the filing. "The qualified bids were not reasonably likely to yield a superior alternative."
The court authorized the cancellation of the auction.
A group of funds that financed "R" Us, because of the intellectual property served as collateral on their loans. The group includes Solus Alternative Asset Management and Angelo Gordon.
As owners of the new entity, the funds will have discretion over trademarks and payments from their use internationally. But it can be difficult to ramp up U.S. operations again given the fallout of the protracted bankruptcy process. Major suppliers including Mattel Inc and Hasbro Inc. have found new distributors,
Toys has sold all of its stores and distribution centers, with some of the most valuable retail space going to a separate group of secured creditors. The rest of the stores were taken over by landlords or the other retailers.
Solus and Oaktree have been battling a group of lenders, including Cerberus Capital Management and Cyrus Capital Partners who are trying to take over Toys' Asia operations. The two groups of lenders have made their way to the United States.
The case is Toys "R" Us, 18-03090, U.S. Bankruptcy Court, Eastern District of Virginia (Richmond).
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(c) 2018, Bloomberg. Written by Elizabeth Ronalds-Hannon and Lauren Coleman-Lochner. Bloomberg's Jeff Sutherland and Steven Church contributed to this report.
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