Thee U.S. Bankruptcy Court approved Toys “R” Us’ motion for an order to dismiss Toys Canada from its Chapter 11 proceedings.
The order states, “Toys Canada’s chapter 11 case individually captioned 17-34668 (KLP) in the United States Bankruptcy Court Eastern District of Virginia shall be automatically dismissed pursuant to sections 105(a), 305(a) and 1112(b) of the Bankruptcy Code upon the date of delivery of the Termination Certificate by the Monitor on the closing of the Canadian Equity Sale pursuant to the terms of the CCAA Discharge Order.” As previously reported, the Company sought dismissal on the following grounds: “First, Toys Canada’s dismissal from chapter 11 is necessary to facilitate and finalize the Canadian Equity Sale. Specifically, the Debtors must dismiss Toys Canada from chapter 11 on or before May 31, 2018 as a condition to closing the Canadian Equity Sale. Because the Canadian Equity Sale will result in the acquisition of Toys Canada by a new third party, there is no reason for Toys Canada to remain in its chapter 11 proceedings. Second, as set forth in the Canadian Equity Sale Order, upon closing of the Canadian Equity Sale, the sale proceeds will be used to satisfy all of Toys Canada’s obligations under the DIP ABL/FILO Facilities, and Toys Canada will no longer be a guarantor or obligor on any funded debt that would make it necessary to participate in the chapter 11 cases.”
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