The U.S. Bankruptcy Court approved Toys “R” Us’ motion for an order authorizing the Debtors to provide transition services, authorizing the Debtors to take any corporate action necessary to consummate the Central European sale, and authorizing certain Debtors to enter into related agreements.
As previously reported, “In connection with the wind-down of the Debtors’ U.S. operations (the ‘U.S. Wind-Down’), the Debtors initiated efforts to monetize their viable operations throughout Canada, Europe, and Asia. Over the course of the last several months, the Debtors have undertaken substantial efforts to realize value-maximizing sales of these businesses. On April 25, 2018, the Court approved a sale of the Debtors’ Canadian operations for a base purchase price of CAD $300 million [Docket No. 2852]. And as publicly reported, the Debtors continue to explore a sale of their Asian-Pacific operations with multiple potential purchasers continuing to conduct diligence. The Debtors seek through this Motion approval of certain actions and agreements relating to the sale of their Central European Business. More specifically, the Seller seeks to sell its operations in Germany, Austria, and Switzerland to the Purchaser, an affiliate of Smyths Toys Superstores (‘Smyths Toys’), which currently operates 110 toy stores and online shops in Ireland and Great Britain. If consummated, the Central European Sale will provide for a baseline purchase price of EUR 64.4 million (approximately $79.3 million) and could yield up to approximately EUR 79 million (approximately $97.7 million), subject to certain adjustments and escrows and meeting certain conditions….The Debtors, with the assistance of their investment banker Lazard Frères & Co., ran a fair and robust marketing process for their Central European Business….Neither the Seller, Toys Germany, Toys Austria, nor Toys Switzerland, collectively, the ‘Non-Debtor Affiliates’ are Debtors. However, (a) they are all wholly-owned indirect subsidiaries of the Debtors and (b) the Seller and Toys Germany are guarantors on the Prepetition Taj Senior Notes and International DIP Facility (together with the Europe Credit Agreement, the ‘Secured Taj Obligations,’ and the lenders thereunder, the ‘Taj Secured Lenders’). Subject to reaching a mutually agreeable Waiver and Release Agreement, the Ad Hoc Group of Taj Noteholders support the Central European Sale and have agreed to release their liens and claims on the Central European Business (the ‘Release Deeds’). Additionally, certain Debtors are party to one or more of the agreements attached to the Sale and Purchase Agreement, and the consent or direction of certain Debtors and non-Debtor affiliates is required to effectuate the Sale and Purchase Agreement and related agreements….Additionally, out of an abundance of caution, the Debtors seek authorization from the Court to take any corporate action, including but not limited to granting consents or giving directions to affiliates, necessary to implement the Central European Sale. As entry of the proposed Order is a condition to the Central European Sale, failure to obtain the relief requested herein may jeopardize the Central European Sale.”
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