December 24, 2018 – Toys “R” Us filed a Chapter 11 Plan [Docket No. 6053] and a related Disclosure Statement [Docket No. 6054] of Wayne Real Estate Parent Company (Toys “R” Us, the “Debtors,” and Wayne Real Estate Parent Company, the “Wayne Debtor”).
The Disclosure Statement provides the following overview of the TRU Retail Debtors’ restructuring efforts: “On September 18, 2017 (the ‘Petition Date’), Toys “R” Us, Inc. and certain of its affiliates, including the Debtor (the ‘TRU Retail Debtors,’ and, together with its debtor affiliates, the ‘Company’) filed voluntary petitions with the Bankruptcy Court under chapter 11 of the Bankruptcy Code. On March 20, 2018, Toys “R” Us Property Company I, LLC and its debtor affiliates (the ‘Propco I Debtors’) filed voluntary petitions with the Bankruptcy Court under chapter 11 of the Bankruptcy Code. Following the commencement of the TRU Retail Debtors’ cases the TRU Retail Debtors experienced reduced revenues and constricted cash flow, largely due to a weaker than expected 2017 holiday shopping season. In the weeks leading up to March 20, 2018, it became clear to Toys “R” Us, Inc. and its stakeholders that the continuation of their business as a going concern in the United States was no longer tenable….On July 20, 2018, the Bankruptcy Court authorized the Propco I Debtors’ retention of Raider Hill Advisors, LLC (‘Raider Hill’) as real estate advisor to the Propco I Debtors.
Since Raider Hill’s retention, the Propco I Debtors have been engaged in the process of selling or otherwise disposing of their leased and owned properties. On September 27, 2018, the Propco I Debtors conducted an auction of several of their leased properties. And, on October 16, 2018, the Propco I Debtors assumed 22 of their store leases, prior to the expiration of their time period to assume unexpired leases of non-residential real property pursuant to section 365(d)(4) of the Bankruptcy Code (the ‘365(d)(4) Deadline’). With the status of the Propco I Debtors’ leased properties largely determined, the Propco I Debtors have engaged in negotiations with the Creditors’ Committee to bring a resolution to these chapter 11 cases so that the Propco I Debtors can manage, market and/or otherwise dispose of the remainder of their assets outside of chapter 11. The result of those negotiations is the Joint Chapter 11 Plan of Toys “R” Us Property Company I, LLC and its Debtor Affiliates. The [Wayne] Debtor, in consultation with its stakeholders, determined that the best path forward would be a separate plan for the Debtor [emphasis added]. The result of that determination and subsequent negotiations is the Chapter 11 Plan of Wayne Real Estate Parent Company….The Plan contemplates a reorganization of the [Wayne] Debtor, allowing it to emerge from chapter 11 as a holding company for the Propco I Debtors, allowing the General Unsecured Creditors of the [Wayne] Debtor to receive the Debtor’s recovery under the Propco I Plan.”
The following is a summary of classes, claims, and voting rights (defined terms are as defined in the Plan):
- Class 1 (“Other Secured Claims”) is unimpaired, deemed to accept and not entitled to vote on the Plan. Each Holder shall receive, either: (a) payment in full in cash; or (b) delivery of the collateral securing their claim and payment of any related interest.
- Class 2 (“Other Priority Claims”) is unimpaired, deemed to accept and not entitled to vote the Plan.
- Class 3 (“General Unsecured Claims”) is impaired and entitled to vote on the Plan. Holders of will receive their pro rata share of the consideration to be specified in the Restructuring Transactions Memorandum, which in any case will consist of either direct or indirect ownership of the New Contingent Equity Rights, which direct or indirect ownership may be accomplished through the receipt of New Common Stock, the direct receipt of the New Contingent Equity Rights, or another mechanism to be determined.
- Class 4 (“Intercompany Claims”) is unimpaired/impaired, deemed to accept/reject and not entitled to vote the Plan. Each claim will be reinstated or canceled without any distribution on account of such claim as determined by the Wayne Debtor in its sole discretion.
- Class 5 (“Interests in the Debtor”) is impaired, deemed to reject and not entitled to vote on the Plan. Claims will be cancelled without any distribution in respect of the claim.
The Debtors also requested that the Court approve (i) the adequacy of the Wayne Debtor Disclosure Statement and (ii) proposed steps related to the solicitation process and ultimate confirmation of the Plan [Docket No. 6055].
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