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Toys ‘R’ Us Plans Bankruptcy Filing as Soon as Today – Bloomberg

Toys “R” Us Inc., which has struggled to lift its fortunes since a buyout loaded it with debt more than a decade ago, is preparing a Chapter 11 filing as soon as today, according to people familiar with the situation.

The move would send America’s largest toy chain to bankruptcy court, dealing another blow to a brick-and-mortar industry that’s already reeling from store closures, sluggish mall traffic and the threat of Amazon.com Inc.

The toy retailer has already hired a claims agent, which typically helps with administering a Chapter 11 process, people with knowledge of the situation said last week. And its vendors have been curtailing shipments amid concern that Toys “R” Us might not be able to pay its bills.

With speculation of a bankruptcy mounting, shares of Toys “R” Us’s vendors tumbled on Monday. Shares of Mattel Inc., the maker of Barbie and Fisher-Price, fell 6.2 percent — its worst decline in seven weeks. Hasbro, the company behind Monopoly, Nerf and Transformers, dropped 1.7 percent, marking its biggest decrease in almost two weeks.

Meanwhile, the cost of insuring against default on Toys “R” Us debt has surged. Prices on six-month and one-year swaps have climbed to record highs, suggesting the market is pricing in all-but-certain odds of a Chapter 11 filing, which protects companies against creditors during a reorganization.

A representative for Toys “R” Us declined to comment.

    Toys ‘R’ Us Plans Bankruptcy Filing as Soon as Today – Bloomberg

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