Toys “R” Us filed with the U.S. Bankruptcy Court a motion for entry of an order establishing bidding procedures and approving the sale of certain real property and leases. The motion explains, “As the Debtors will no longer be operating stores at the Initial Closing Stores, the Debtors now seek entry of an order approving the Bidding Procedures to capitalize on those assets. In conjunction with the store performance analysis and Initial Store Closings, the Debtors and their affiliates also engaged Cushman & Wakefield and A&G to perform appraisals (the ‘Appraisals’) of their owned real property and unexpired real property leases (collectively, the ‘Real Estate Assets’). Following the Appraisals, and in consultation with A&G, A&M, and Lazard, the Debtors determined that obtaining Court approval of a sale of the Real Estate Assets in connection with the Store Closings is the most value-maximizing option with respect to such Real Estate Assets.”
The motion continues, “The Bidding Procedures contemplate that the Debtors, in consultation with the Consultation Parties, would be authorized, but not obligated, in an exercise of their business judgment, to agree to reimburse the reasonable and documented out-of-pocket fees and expenses of one or more Qualified Bidder (each, an ‘Expense Reimbursement’), and/or agree to pay one or more Qualified Bidders a ‘work fee’ or other similar cash fee (each, a ‘Work Fee’) if the Debtors reasonably determine in their business judgment that any such Expense Reimbursement or Work Fee will encourage one or more parties to submit a Qualified Bid or result in a competitive bidding and Auction process. The aggregate amount of all Expense Reimbursements and Work Fees may not exceed $50,000 per Qualified Bidder or $1,000,000 in the aggregate, and the Debtors shall consult with the Consultation Parties prior to agreeing to any specific Expense Reimbursement or Work Fee.”
In addition, “The Debtors may choose a Stalking Horse Bidder by March 15, 2018, and will inform the court if a Stalking Horse Bidder has been selected and any terms thereto at the hearing to approve the Bidding Procedures. The Debtors submit that the opportunity to enter into a Stalking Horse Agreement that provides these bid protections will encourage bidders to submit bids and participate at the Auction, thereby maximizing value for the Debtors estates.”
The motion proposes the following general timeline: March 26, 2018 deadline to submit qualified competing bids; an auction, if necessary, would be conducted on March 29, 2018, followed by an April 12, 2018 sale hearing. The Court scheduled a March 20, 2018 hearing to consider the procedures motion.
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