Following some speculation about its financial woes, Toys R Us has officially filed for Chapter 11 Bankruptcy. The company is currently struggling with about $5 billion in debt, and hopes the bankruptcy filing can help them restructure while still keeping their stores open for the holiday season.
As a result of the bankruptcy filing Toys R Us has received over $3 billion in debtor-in-possession financing from a number of lenders. Toys R Us says this money will help them immediately improve their financial situation, and keep their stores and operations well maintained leading into the busiest season of the year.
Dave Brandon, Toys R Us Chairman and Chief Executive Officer, had this to say of the filing in a statement: "Together with our investors, our objective is to work with out debtholders and other creditors to restructure the $5 billion of long term debt on our balance sheet ... and strengthen out competitive position in an increasingly challenging and rapidly changing retail marketplace."
The company has also filed a number of other motions with the bankruptcy court to ensure they can continue their normal operations, such as paying employees, honoring customer programs, and pay vendors and suppliers. Toys R Us' Canadian subsidiary intends to seek similar protection under the Ontario Superior Court of Justice's CCAA.
We previously reported on Toys R Us' financial issues when the company hired a law firm to look into their options earlier this month.
Sam Stewart is a freelance writer for IGN. You can follow him on Twitter.
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