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Toys ‘R’ Us Directors Face New Fraud Claims Over Bankruptcy

  • Creditors allege board members knew they shouldn’t OK loans
  • Lawyer for directors previously has called lawsuit ‘baseless’
A Toys R Us store in Frederick, Maryland in 2018. 

A Toys R Us store in Frederick, Maryland in 2018. 

Photographer: Andrew Harrer/Bloomberg
Updated on

Toys “R” Us board members and owners face new allegations of fraud and breach of duty over the company’s 2017 bankruptcy.

Creditors claim in ongoing litigation that seven company directors have now said they knew they shouldn’t have approved executive bonuses and onerous bankruptcy loans at the outset of the case that put the retailer on the fast track to a sudden liquidation six months later.