Toys ‘R’ Us property company debtors file plan, look to sell assets

By Caroline Salls

Pittsburgh, June 12 – Toys “R” Us, Inc.’s Propco II debtors requested court approval of the bid procedures for the sale of their assets and filed a Chapter 11 plan and related disclosure statement, according to Tuesday filings with the U.S. Bankruptcy Court for the Eastern District of Virginia.

The Propco II debtors are Toys “R” Us Property Co. II, LLC and Giraffe Junior Holdings, LLC.

TRU Trust 2016-Toys, Commercial Mortgage Pass-Through Certificates, Series 2016-TOYS, acting through special servicer Wells Fargo Bank, NA, has been selected as the stalking horse bidder for the debtors’ assets through a $480 million credit bid.

Under the proposed bid procedures, initial competing bids must be submitted by 5 p.m. ET on July 2.

If the debtors do not receive non-binding indications of interest before the bid deadline that total at least $490 million, then the solicitation process will terminate, and no auction will be held.

If indications of interest equal or exceed $490 million, the debtors may proceed to a second phase of the bidding process.

The bid procedures call for reimbursement to the trust of sale-related expenses if it is not ultimately the high bidder.

A sale hearing would be scheduled for July 30, and the sale is scheduled to close on July 31.

Under the plan, holders of mortgage loan secured claims against the Propco II debtor will either receive sale proceeds equal to the amount of the claims or receive the assets in the Propco II debtor, depending on the outcome of the sale.

Holders of other secured claims against Propco II would be paid in full in cash, receive the collateral securing their claim or have their claim reinstated.

Holders of priority claims will be paid in full in cash.

Holders of general unsecured claims will receive a share of any sale proceeds remaining after payment of senior claims.

Holders of Propco II interests will receive a share of any sale proceeds remaining after payment of all claims.

Holders of claims against the Giraffe Junior Holdings debtor will receive a share of any sale proceeds remaining after payment to all Propco II creditors and interest holders and senior Giraffe Junior claims.

Toys “R” Us is a Wayne, N.J., toy retailer. The company filed for bankruptcy on Sept. 19, 2017 under Chapter 11 case number 17-34665.

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