The U.S. Bankruptcy Court approved Toys “R” Us motion for entry of an order authorizing the Debtors to enter into consulting agreements and authorizing and approving the conduct of store closing sales (with such sales to be free and clear of all liens, claims and encumbrances) and authorizing customary bonuses to employees of closing stores. The Company intends to close approximately 180, equal to 20%, of its retail locations.
As previously reported, “The Debtors have determined, in the reasonable exercise of their business judgment, that (a) the services of the Consultants are necessary for a seamless and efficient large-scale execution of the Store Closings and Sales, as is contemplated by this Motion, and to maximize the value of the assets being sold, and (b) the Consultants are capable of performing the required tasks on favorable financial terms, as determined by the evaluation process. Further, the Store Closings are a critical component of the go-forward business plan under development by the Debtors, and entry into the Consulting Agreements will allow the Debtors to conduct the Store Closings in an efficient, controlled manner that will maximize value for the Debtors’ estates. Further, the relief requested herein will permit the Debtors to conduct the Store Closings in a timely manner and will establish fair and uniform procedures to assist the Debtors and their creditors through the Debtors’ transition to a smaller, more profitable enterprise. Pursuant to the Consulting Agreements, Tiger/GA will serve as the Consultant to the Debtors in connection with the Store Closings and Sales of certain retail stores, and Hilco/GB will serve as the Consultant to the Debtors in connection with the Store Closings and Sales of certain other retail stores.”
In addition, “Subject to the Court’s approval, the term ‘Sale Term’ with respect to each respective Closing Store shall commence on February 7, 2018 (the ‘Sale Commencement Date’) and shall end with respect to each respective store no later than April 15, 2018.Through this Motion, the Debtors are requesting the authority, but not the obligation, to pay Store Closing Bonuses (the ‘Store Closing Bonus Plan’) to store-level noninsider employees, who remain in the employ of the Debtors during the Sales. The Debtors believe that the Store Closing Bonus Plan will motivate employees during the Sales and will enable the Debtors to retain those employees necessary to successfully complete the Sales.”
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