Toys “R” Us Inc. creditors filed case accusing the defunct retailer’s professionals and private-equity owners of fraudulence and breach of fiduciary trust.
Previous ceo David Brandon along with other directors misrepresented the model seller’s ability to settle creditors after it filed for bankruptcy in 2017 while gathering millions in bonuses and advising costs, in accordance with the issue filed in ny Supreme Court. The scenario will be brought by a trust made for creditors, including toymakers.
Toys “R” Us liquidated in 2018, making those vendors and workers scrambling for funds too restricted to fulfill all claims. That’s prompted several years of recrimination against onetime owners KKR & Co., Bain Capital, and Vornado Realty Trust, whom purchased the business in 2005 in a deal that critics said left the retailer not able to commit to keep competitive.
An attorney representing Toys’ previous professionals and directors called the lawsuit “baseless” and stated the group would reduce the chances of it “vigorously.”
“At all times, the previous directors and officers of Toys “R” Us and people in administration acted into the desires regarding the business and its own stakeholders. This lawsuit is just a misguided effort to pressure insurance carriers to pay meritless claims,” Bob Bodian of Mintz, Levin, Cohn, Ferris, Glovsky and Popeo P.C. said in an emailed statement because none of the named defendants has any financial exposure.
The suit claims that the company’s stewards didn’t disclose that Toys had to satisfy specific milestones it had no hope of attaining whenever it took for a $3.1 billion bankruptcy loan, and that it misrepresented the company’s financial predicament in order to avoid losing that financing. (mais…)