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Toys ‘R’ Us Creditors Sue Directors and Private-Equity Owners
- Case asserts executives misrepresented conditions at toyseller
- Retailer took on bankruptcy loan it couldn’t repay, suit says
A Toys 'R' Us store in Paramus, New Jersey in 2019.
Photographer: Gabby Jones/BloombergThis article is for subscribers only.
Toys “R” Us Inc. creditors filed a lawsuit accusing the defunct retailer’s executives and private-equity owners of fraud and breach of fiduciary trust.
Former Chief Executive Officer David Brandon and other directors misrepresented the toyseller’s ability to repay creditors after it filed for bankruptcy in 2017 while collecting millions in bonuses and advising fees, according to the complaint filed in New York Supreme Court. The case is being brought by a trust created for creditors, including toymakers.