/raid1/www/Hosts/bankrupt/TCRLA_Public/180704.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
L A T I N A M E R I C A
Wednesday, July 4, 2018, Vol. 19, No. 131
Headlines
A R G E N T I N A
SUPERCANAL SA: Chapter 15 Recognition Hearing Set for July 18
B A R B A D O S
BARBADOS: Starts Negotiations With IMF
C A Y M A N I S L A N D S
ABRAAJ HOLDINGS: Placed Under Voluntary Wind-Up
ABRAAJ INVESTMENT: First Creditors' Meeting Set July 17
C O L O M B I A
LIFEMILES LTD: S&P Affirms BB- Global Scale ICR, Outlook Stable
J A M A I C A
JAMAICA: Decline in Bauxite Production Attributed to Devaluation
M E X I C O
MEXICO: Trump, Obrador Discuss Immigration, Trade During Call
MEXICO: Vote Resets U.S. Relations on Trade
P A R A G U A Y
PARAGUAY: Has Solid Will to Implement Reforms, Official Says
P U E R T O R I C O
KAMA MANAGEMENT: Latest Plan to Pay $30K to Unsecured Creditors
TOYS R US: Extends Stay at Corporate Headquarters Beyond June
TOYS R US: Cullen and Dykman Represents Levatoy, 2 Others
TOYS R US: Bids Farewell to U.S. Shoppers
TOYS R US: B-4 Lenders Group Membership Changes
TOYS R US: E. Frejka Named as Consumer Privacy Ombudsman
- - - - -
=================
A R G E N T I N A
=================
SUPERCANAL SA: Chapter 15 Recognition Hearing Set for July 18
-------------------------------------------------------------
The Hon. Martin Glenn of the U.S. Bankruptcy Court for the
Southern District of New York will hold a hearing on July 18,
2018, at 2:00 p.m. (prevailing Eastern Time), at One Bowling
Green, New York, to consider approval of the petition for
recognition of the foreign proceeding of Supercanal S.A. as
foreign main proceeding under Chapter 15 of the U.S. Bankruptcy
Code, which petition filed by Eduardo Marcelo Vila, the appointed
foreign representative of the Debtors' case. Objections to the
approval, if any, are due no later than 4:00 p.m. on July 11,2018
(prevailing Eastern Time).
About Supercanal S.A.
Supercanal S.A. is a corporation (sociedad anonima) organized and
operating under the laws of Argentina. Its business, which is
conducted through various subsidiaries, consists primarily of the
installation operation and development of cable television and
data cable transmission. Supercanal is a major provider of
television and broadband services in Argentina and its operations
and subscribers are located in Argentina.
On March 29, 2000, the Debtor, together with certain affiliated
entities, filed petitions commencing the Concurso before the
Argentine Court in order to obtain protections afforded under
Argentine law and to restructure their obligations.
On Nov. 4, 2005, a reorganization plan for Supercanal was filed
before the Argentine Court. Eduardo Marcelo Vila and Carlos
Esteban Cvitanich were appointed as agents in connection with
implementation of certain steps under the Reorganization Plan.
Supercanal S.A., through foreign representative Eduardo Marcelo
Vila, filed a Chapter 15 petition (Bankr. S.D.N.Y. 18-11869) on
June 21, 2018, to seek U.S. recognition of the proceeding in
Argentina. The Hon. Martin Glenn oversees the case. Clifford
Chance US LLP is the U.S. counsel to the Debtor.
===============
B A R B A D O S
===============
BARBADOS: Starts Negotiations With IMF
---------------------------------------
RJR News reports that Barbados has reportedly put together a
strong negotiating team and is ready to engage in discussions with
representatives of the International Monetary Fund (IMF) as of
July 2 through to July 12.
This disclosure came from Minister of Finance Ryan Straughn who
said the IMF officials had already started requesting data which
Barbados was in the process of finalizing, according to RJR News.
Last month, Prime Minister Mia Mottley said that Barbados' public
debt was as high as 171 per cent of Gross Domestic Product (GDP)
and corrective economic and fiscal measures were needed to place
it on a sustainable footing, the report relays.
==========================
C A Y M A N I S L A N D S
==========================
ABRAAJ HOLDINGS: Placed Under Voluntary Wind-Up
-----------------------------------------------
The shareholders of ABRAAJ Holdings passed a resolution to
voluntarily wind up the company's operations.
The company filed a request to tap David Griffin and Andrew
Morrison of FTI Consulting as joint liquidators.
The liquidators can be reached at:
Andrew Morrison
FTI Consulting
53 Market Street, Camana Bay
Suite 3212, PO Box 1203
Grand Cayman, Cayman Islands KY1-1203
-- and --
David Griffin
FTI Consulting
200 Aldersgate, Aldersgate Street
London EC1A 4HD
ABRAAJ INVESTMENT: First Creditors' Meeting Set July 17
-------------------------------------------------------
ABRAAJ Investment Management Limited, which is in provisional
liquidation, will have its first creditors' meeting on July 17,
2018 at 10:00 a.m. for the purpose of providing an update on the
status of the liquidation and election of liquidating committee.
Venue for the said event will be provided soon.
Deloitte & Touche and Deloitte LLP are appointed as Joint
Provincial liquidators.
The liquidators can be reached at:
Stuart Keith Sybersma
Deloitte & Touche
106 Goring Avenue
Grand Cayman, Cayman Islands, KY1-1109
-- and --
David Soden
Athene Place, 66 Shoe Lane
London, EC4A 3BQ
===============
C O L O M B I A
===============
LIFEMILES LTD: S&P Affirms BB- Global Scale ICR, Outlook Stable
---------------------------------------------------------------
S&P Global Ratings said that it has affirmed its 'BB-' global
scale issuer credit rating on LifeMiles LTD. At the same time, S&P
affirmed its 'BB-' issue-level rating on the company's $395
million first-lien senior secured term facility. The outlook
remains stable.
S&P said, "The rating affirmation reflects our view that LifeMiles
has continued to post healthy operating and financial performance
in line with its rating, with debt to EBITDA of about 2.3x and FFO
to debt of about 39% for the 12 months ended March 31, 2018. It
also reflects our view that the company will post debt to EBITDA
at around 2.0x and FFO to debt above 40% in the next two years."
This is mainly because of the continued expansion of the company's
coalition programs and partnerships with banks, increasing co-
branded cards, and the incorporation of new commercial coalitions
in LifeMiles' core markets. This is despite the company's issuance
of additional debt in March 2018 for $95 million, which it used to
fund a dividend recapitalization aimed to optimize the company's
capital structure.
LifeMiles is the largest and most well-known coalition loyalty
program in Colombia and Central America. Avianca Holdings S.A.
(B/Stable/--) owns 70% of the company, and Advent International
(not rated) owns the remaining 30%. LifeMiles is Avianca's
exclusive frequent flyer program. Over the past few years, the
company has rapidly expanded its business thanks to its
relationship with Avianca and to its development of an extended
base of commercial partners. S&P expects this growth to continue,
thanks to favorable demographics and a loyalty program market that
has room to grow in the region.
S&P said, "We also consider that the company's performance will
remain underpinned by Avianca's holding in the company. Avianca's
growth has been driven by favorable macroeconomic conditions in
its key markets, which have increased traffic, load factors, and
recovery of yields. In addition, the company has continued to
expand its operations through new international routes
(particularly Europe and North America), the incorporation of a
new fleet with higher capacity and fuel efficiency, and the
deployment of routes and aircraft in line with market conditions.
Avianca has a strong market position in Colombia, Peru, and
Central America.
"Our ratings on LifeMiles continue to reflect its limited scale
with about $317.5 million in revenues for the 12 months ended
March 31, 2018, high geographic concentration of operations in
Colombia that account for about 53% of total sales, and limited
number of partners for miles redemption. Avianca and members of
the Star Alliance represent about 32% of LifeMiles' gross
billings. About 50% of its gross billings comes from financial
institutions and others, and 18% is sold directly to members,
while about 77% of redeemed miles stems from Avianca. The rating
strengths are the company's diversified and loyal network of
partners, strong relationships with key partners through long-term
contracts, and leading market position and brand awareness in
Colombia and Central America. In addition, LifeMiles' brand
recognition and efficient cost management translate into higher
EBITDA margins than those of other players in the loyalty program
industry.
"We believe that the company will continue to generate free cash
flow given the expansion of its revenue base through additional
coalitions and alliances, asset-light structure, low working
capital requirements, and limited capital expenditures (capex)
needs. These factors should allow LifeMiles to meet its financial
obligations, including debt prepayments established under the term
facility documentation, while distributing any excess cash to its
shareholders. We don't discard a possibility that the company
would issue additional debt for dividend recapitalization, while
we expect LifeMiles to maintain debt to EBITDA at around 2.0x, an
ample headroom for its financial policy of target level in the
2.0x-3.0x range."
The global scale rating on LifeMiles is two notches above that on
Avianca. Under S&P's group rating methodology, LifeMiles meets all
the characteristics for an insulated subsidiary based on the
following factors:
-- In a hypothetical bankruptcy scenario for Avianca, LifeMiles
would most likely avoid any bankruptcy proceedings that could
jeopardize its operating activities or compromise its assets.
On one hand, LifeMiles has protection stemming from its
shareholder agreement that provides its minority shareholder
(Advent) with veto rights on almost all strategic corporate
decisions. Also, as long as the minority shareholder maintains
at least a 10% stake in the company, Advent will have veto
rights over reserved matters, which include voluntary
bankruptcy filing or dissolution/liquidation of the
subsidiary. LifeMiles doesn't guarantee directly or indirectly
any of Avianca's financial obligations.
-- LifeMiles generates only about 25% of gross billings from the
sale of miles to its parent company under a 20-year exclusive
agreement, while the remaining 75% come from long-term
agreements with third parties and sales direct to members.
Therefore, LifeMiles' financial performance and funding
prospects are independent from those of Avianca, so that even
if other core entities encounter severe setbacks, LifeMiles'
relative strengths of would remain nearly intact.
-- LifeMiles' board of directors is composed of seven members,
three of whom are independent, three are from Avianca, and one
from Advent, which has veto rights on mostly all corporate
strategic decisions on the company.
-- S&P believes that Avianca has a compelling economic incentive
to preserve LifeMiles' credit strength, because the subsidiary
is an important source of passenger traffic for the airline.
S&P said, "The stable outlook reflects our view that LifeMiles
will continue to deliver double-digit growth in the next 12
months, while it maintains its adjusted EBITDA margins at around
50% and a debt to EBITDA ratio at around 2.0x. We expect growth to
continue coming from expansion of the company's loyalty program
among the rising middle class in Colombia and Central America,
whose consumption habits are increasingly driven by credit and
debit card usage, as well as from new alliances and co-branded
products with financial institutions and businesses. The outlook
also considers that potential recapitalizations or a more
aggressive dividend policy won't hike the debt-to-EBITDA ratio
above 3.0x. The stable outlook incorporates our assessment of
LifeMiles' arms-length relationship with Avianca and that the
existing insulation features will continue to support the
company's two-notch rating differential above that of its parent."
A negative rating action in the next 12 months could result from
one or more of the following factors. First, a downgrade of
Avianca due to adverse industry conditions that would weaken its
operating margins and lead to a revision of its liquidity
assessment to a weaker category. Second, LifeMiles faces
significant member or partner losses, reducing its operating
margin and cash flow generation. Finally, it pursues a more-than-
expected aggressive financial policy in relation to the use of
debt, leading to a debt to EBITDA consistently above 4.0x.
Additionally, S&P could lower the rating by two notches if it was
to revise its assessment of LifeMiles' insulated subsidiary
status. Such an event could follow a change in LifeMiles'
ownership structure, with Advent reducing its current stake
position or if Avianca's financial policy toward LifeMiles changes
significantly.
Although unlikely in the next 12 months, a one-notch upgrade of
LifeMiles would be dependent on a similar rating action on
Avianca. This scenario could occur if Avianca's operations
outperform S&P's expectations, which would result in a debt to-
EBITDA ratio well below 5x and FFO to debt above 12% on a
sustained basis, or if it strengthens its business profile by
expanding its operations and competitive position, which could
result from strategic alliances or organic growth.
=============
J A M A I C A
=============
JAMAICA: Decline in Bauxite Production Attributed to Devaluation
----------------------------------------------------------------
RJR News reports that bauxite producers in Jamaica experienced
losses in May as a result of the Jamaican dollar losing value to
the US currency.
That's according to data published by the Statistical Institute of
Jamaica-STATIN in its Producer Price Index report, according to
RJR News. The Index measures the average change in selling prices
received by domestic producers of goods and services. The report
showed that Mining and Quarrying declined by 1.8%.
RJR News discloses that STATIN said the fall was mainly due to the
currency slide.
That resulted in a negative movement of 1.9% in the Bauxite Mining
& Alumina Processing group, the report notes.
However, STATIN reported that Other Mining and Quarrying
activities recorded a positive movement of 0.9& for the same
period, the report relays. Manufacturing was also up 1.7 per cent
in May.
Meanwhile, STATIN is reporting that Jamaica's trade deficit at the
end of April was at US$1.4 billion, notes RJR News. This was an
increase of 20.7% when compared to the US$1.1 billion recorded
during the same period in 2017.
The April International Merchandise Trade Bulletin further
outlined that expenditure on imports amounted to US$1.9 billion
for the review period, 20.9% higher over the corresponding period
in 2017, the report relays.
Revenue from total exports was up 21.6% when compared to the
US$448.8 million recorded last year, the report says.
Expenditure on imports from the US-- Jamaica's main trading
partner -- was valued at US$833.5 million for the January to April
period, an increase of 13.5%, the report adds.
===========
M E X I C O
===========
MEXICO: Trump, Obrador Discuss Immigration, Trade During Call
-------------------------------------------------------------
Stefanie Eschenbacher and David Alire Garcia at Reuters report
that U.S. President Donald Trump and Mexico's next leader, Andres
Manuel Lopez Obrador discussed immigration, trade and security
issues in a phone call, the two mavericks beginning a dialogue
amid strained relations between the neighbors.
Lopez Obrador, a 64-year-old former mayor of Mexico City, won a
landslide election victory, dealing a crushing blow to
establishment parties and becoming the first leftist to win the
Mexican presidency since one-party rule ended in 2000, according
to Reuters.
Relations between Trump and Lopez Obrador will be closely watched
because Trump has regularly criticized Mexico, the report says.
In comments to reporters, Trump said he believed Lopez Obrador
would help the United States secure its southern border, the
report notes.
MEXICO: Vote Resets U.S. Relations on Trade
-------------------------------------------
Jose de Cordoba and David Luhnow at The Wall Street Journal report
that Andres Manuel Lopez Obrador's election victory offers the
chance to reset frayed relations with Washington as the incoming
Mexican president and President Donald Trump both believe the
North American Free Trade Agreement needs to be rewritten.
But major differences remain as the two committed economic
nationalists are expected to butt heads over exactly how to
rewrite the trade agreement and how to check illegal immigration
into the U.S., issues that are central to politics on both sides
of the nations' shared 2,000-mile border, according to The Wall
Street Journal.
President Trump called Mr. Lopez Obrador to congratulate him. Both
sides termed the conversation amicable, the report notes. Later,
Mr. Trump said Mexico's president-elect "had a very excellent
election. I would say even better than anticipated," the report
relays.
The report notes that Mr. Lopez Obrador, who is to take office
Dec. 1, said in a television interview that "we are not going to
fight." He added: "We will extend our open hand to look for a
relationship of friendship with the U.S," the report says.
The warm remarks belied growing strains between the nations under
Mr. Trump, who has repeatedly criticized Mexico and its people and
called for the construction of a wall to divide the two countries,
the report discloses.
Mr. Lopez Obrador could prove a pugnacious counterpart to Mr.
Trump, the report relays. He has vowed to defend Mexico's dignity
and published a collection of speeches during his campaign called
"Oye, Trump," or "Listen Up, Trump," an attack on the U.S.
president's plans to build a border wall and his policy toward
migrants, which the Mexican politician called "racist" and
"xenophobic."
If the two men reach an impasse it could slow nearly a quarter-
century of cautious but successful bridge-building, which saw the
two countries go from distant neighbors to political allies and
key economic partners who trade nearly $560 billion of goods every
year, the report relays.
"It heightens the risk that the relationship will deteriorate
further," said Michael Shifter of the Inter-American Dialogue, a
Washington, D.C., think tank, the report notes. "I think he will
be less accommodating to Trump's demands and his abrasive comments
about Mexico and Mexicans and to the extent he stands up to Trump,
he will have a lot of support," he added.
Mr. Lopez Obrador's team will inherit the renegotiation of Nafta,
which has stalled recently on U.S. demands that it include
provisions such as a "sunset clause" that requires the deal to be
renewed every five years, the report notes.
In some ways, the new Mexican team could prove more flexible, the
report relays. Mr. Lopez Obrador has signaled his administration
will be more receptive to Washington's push to raise wages in
Mexico -- a key goal of both Mr. Trump and Democratic lawmakers in
Washington, the report says.
On the flip side, the new Mexican leader's nationalist impulses
could clash with Mr. Trump's "America first" policy, the report
says. Mr. Trump, for instance, has repeatedly threatened tariffs
in industries like cars made in Mexico as a way to pressure Mexico
in the trade talks.
"Any of these arm-twisting tariffs -- whether the threat of auto
tariffs or the imposition of auto tariffs -- could be enough to
make Mexico under [Mr. Lopez Obrador] walk away," said Monica de
Bolle, senior fellow at the Peterson Institute for International
Economics, another Washington think tank, the report notes.
The stakes are high for both countries. Mexico has long been the
No. 2 destination for U.S. exports, after Canada, the report
notes. Trade between the two countries has exploded since Nafta
went into effect in 1994, the report recalls.
Last year, U.S. businesses sent $243.3 billion worth of
merchandise to Mexico. For Mexico, the U.S. is by far its most
important export market, as well as a major source of intelligence
and aid in counternarcotics operations, the report discloses.
Over the past three decades, Mexican presidents have largely
governed in step with their counterparts in Washington, the report
notes. They have opened the Mexican economy to U.S. investment,
helped deport growing numbers of Central American migrants headed
for the U.S. border and worked to stanch the northward flow of
illegal drugs.
Mr. Lopez Obrador, however, is more like Mexican leaders during a
period of tense relations between the countries in the mid-20th
century, when Mexico charted a foreign policy independent of the
U.S. Born and raised in a southern Mexican state, Mr. Lopez
Obrador has rarely traveled, the report notes. He speaks no
English.
The report relays that the president-elect, widely known by the
initials AMLO, "believes in the power of Mexico and Mexico's
destiny," said Jason Marczak, a fellow at the Atlantic Council who
specializes in Latin America. "He will work with the U.S. on
areas of interest when it benefits Mexico. I do not see him
acquiescing to U.S. demands when it's not in Mexico's interest,"
he added.
Some of the same global forces that led to Mr. Trump's victory
helped propel Mr. Lopez Obrador, the report notes. Like the U.S.
president, Mr. Lopez Obrador wants to focus on the domestic
economy. He is a proponent of "Mexico First," said Andrew Selee,
president of the Washington-based Migration Policy Institute and
author of Vanishing Frontiers, a book about the U.S.-Mexican
relationship, the report notes.
Both men rode to victory on a wave of popular anger at the
political establishment, the report discloses. While Mr. Trump, a
brusque and bombastic 72-year-old billionaire, promised to drain
Washington's "swamp," Mr. Lopez Obrador, 64, a silver-haired
social activist with a messianic tendency, railed against Mexico's
"mafia of power," what he says is a corrupt clique who keep
Mexicans in poverty, the report relays.
Hector Vasconcelos, Mr. Lopez Obrador's pick for foreign minister,
said in an interview the new president wants to keep close ties
with the U.S., but added that Mexico will look to diversify its
foreign policy and deepen ties with the rest of the world, the
report says.
"For the past three decades, we've been excessively focused on the
U.S., on the north in general," he said, the report notes. "While
we won't lose sight that the relationship with the U.S. is vital,
there is a whole world out there, including Europe and Asia and
South America. We'd like to deepen our economic and political ties
with them, too," he added.
With Mr. Lopez Obrador in charge, the U.S. will likely face a
Mexican government less interested in cooperating on security and
controlling immigration, notes the Journal.
WSJ relays that Mr. Lopez Obrador believes the massive wave of
violence linked to drug trafficking and organized crime that has
convulsed Mexico in recent years is a result of the country's
inequality and poverty. During a speech, he pronounced the
Mexican government's U.S.-supported emphasis on law enforcement a
failure, the report notes.
Mr. Lopez Obrador is also unlikely to support U.S. foreign policy
goals such as pressuring the dictatorial regime of Nicolas Maduro
in Venezuela, the report discloses. The current Mexican
government has taken a leading role in organizing Latin American
governments to press Venezuela's repressive government to move
towards elections, the report says. But during his speech, Mr.
Lopez Obrador said Mexico would return to its traditional
principles of non-intervention and self-determination, the report
relays.
Messrs. Trump and Lopez Obrador have some stark differences and
surprising similarities that may color the relationship, the
report notes.
They have radically different life stories -- one a New Yorker who
built his fortune in real estate and lives an opulent lifestyle.
The other was born in an impoverished rural state, once lived for
five years in a swamp to help Chontal indians and is famous for
his frugality, the report relays.
Mr. Lopez Obrador was driven in a Volkswagen Jetta to the city
center to give his victory speech, the report notes. He lives in
a two-bedroom apartment in a lower-middle-class Mexico City
neighborhood.
They also share some characteristics, the report relays. Both
have a populist streak, are skilled marketers, and have a knack
for pulling out the memorable political phrase or insult, the
report discloses. And both are notoriously thin-skinned and can
lash out at the press when criticized, the report adds.
===============
P A R A G U A Y
===============
PARAGUAY: Has Solid Will to Implement Reforms, Official Says
------------------------------------------------------------
The Latin American Herald reports that the Deputy Secretary-
General of the Organization for Economic Co-operation and
Development (OECD) said in Asuncion that Paraguay has a real will
to implement the reforms as suggested by the OECD.
Mari Kiviniemi met with Paraguayan Foreign Minister Eladio Loizaga
and the Minister of the Technical Secretariat of Development
Planning, Jose Molinas, as part of her visit to the South American
country to present two OECD reports on Paraguay, according to The
Latin American Herald.
The Deputy Secretary-General of OECD told reporters after the
meeting that she had a good discussion with the ministers and that
from the Paraguay side there is a real will to implement the
reforms, the report notes.
Ms. Kiviniemi said that the reports offer recommendations on how
to improve public governance systems and, also, management of
human resources, government and multilevel governance, the report
relays.
The OECD representative also focused on aspects related to health
and, in particular, quality education for citizens from all walks
of life, the report notes.
The two reports that the OECD presented to the Paraguayan
authorities feature concrete recommendations on how to change
legislation, how to improve policies and procedures and how to
involve decision makers, the report adds.
As reported in the Troubled Company Reporter-Latin America on
June 28, 2018, S&P Global Ratings, on June 25, 2018, affirmed its
'BB/B' long-and short-term sovereign credit ratings on Paraguay.
The outlook remains stable. At the same time, S&P affirmed its
'BB+' transfer and convertibility assessment on Paraguay.
======================
P U E R T O R I C O
======================
KAMA MANAGEMENT: Latest Plan to Pay $30K to Unsecured Creditors
---------------------------------------------------------------
Kama Management Inc. on June 21 filed with the U.S. Bankruptcy
Court for the District of Puerto Rico its latest disclosure
statement explaining its proposed Chapter 11 plan of
reorganization.
According to the amended disclosure statement, the aggregate
dividend to Class 4 general unsecured creditors is fixed in the
amount of $30,000 with payments to be distributed pro-rata to
these creditors.
On the effective date of the plan, Class 4 creditors will receive
from Kama Management a non-negotiable, non-interest bearing
promissory note providing for a total amount of $30,000, payable
in consecutive monthly installments of $833 during a period of
three years, according to the filing.
A copy of the amended disclosure statement is available for free
at:
http://bankrupt.com/misc/prb16-08008-164.pdf
About Kama Management
Kama Management Inc., a "small business debtor", filed a Chapter
11 petition (Bankr. D.P.R. Case No. 16-08008) on Oct. 5, 2016.
Alberto Perez Pujals, president, signed the petition. At the time
of filing, the Debtor disclosed total liabilities of $1.45
million.
Judge Mildred Caban Flores presides over the case. The Debtor
hired Lugo Mender Group, LLC as its legal counsel.
The Debtor filed a Chapter 11 plan of reorganization and
disclosure statement.
TOYS R US: Extends Stay at Corporate Headquarters Beyond June
-------------------------------------------------------------
Toys "R" Us - Delaware, Inc. and its affiliated entities
identified as the Propco I Debtors are asking the U.S. Bankruptcy
Court for the Eastern District Of Virginia to enter into a Term
Sheet by which Toys Delaware will continue to occupy the Debtors'
headquarters in Wayne, New Jersey in exchange for Toys Delaware's
payment of property level expenses of the Global Resources Center.
Under an Amended and Restated Master Lease Agreement dated July 9,
2009 (the "Master Lease") between Toys Delaware and the Propco I
Debtors, Toys Delaware leased certain property from the Propco I
Debtors, including the Debtors' corporate headquarters known as
the Global Resources Center located at One Geoffrey Way, Wayne,
New Jersey 07470.
Toys Delaware does not intend to assume the Master Lease and,
therefore, the Master Lease will be deemed rejected as of June 30,
2018.
Toys Delaware has requested that Propco I allow Toys Delaware to
occupy a portion of the GRC after June 30, 2018. After extensive
arm's-length negotiations, the Parties entered into the Term Sheet
pursuant to which Toys Delaware will be entitled to occupy the GRC
in exchange for Toys Delaware's payment of property level expenses
of the GRC and the provision of services to the Propco I Debtors,
on the terms set forth in the Term Sheet.
The official committee of unsecured creditors appointed in the
Propco I Debtors' chapter 11 cases does not object to the Term
Sheet.
Donald C. Schultz of CRENSHAW, WARE & MARTIN, PLC, counsel to Toys
Delaware, explains that the provisions of the Term Sheet include
the following:
a. Term: July 1, 2018 through August 31, 2018 (the "Term").
b. Base Rent: None.
c. Property Level Expenses of GRC: Toys Delaware will pay all
property level expenses of the GRC on a triple net basis,
including the utilities, taxes, security (solely at the GRC and
not at any other location subject to the Master Lease), ordinary
and customary repairs (solely to the extent necessary to protect
human health, safety and welfare and to preserve the structural
integrity of the buildings and material improvements at the GRC),
ordinary and customary cleaning (solely to the extent necessary to
protect human health, safety and welfare), and ordinary and
customary landscaping. Nonpayment of these charges shall give
Propco I the same rights as provided in the Master Lease for non-
payment of "Additional Charges" as defined in the Master Lease;
provided, that Toys Delaware and Propco I shall retain any and all
rights, claims and defenses as provided under the Master Lease or
applicable bankruptcy and non-bankruptcy law. The real estate
taxes for the GRC parcels for the third quarter of 2018 shall be
paid by Toys Delaware prior to the date that the same shall become
delinquent; provided, that to the extent that such payment covers
any day or days after which Toys Delaware has surrendered the GRC
(such overpayment, the "Tax Overpayment"), Propco I shall return
the Tax Overpayment to Toys Delaware within three business days
after the date of surrender of the GRC.
d. Services: In lieu of payment of Base Rent, Toys Delaware and
its subsidiaries, as applicable, shall provide, without charge to
the Propco I Debtors, the same type and scope of services to the
Propco I Debtors that have been provided since the bankruptcy
filing of Toys Delaware. The services include financial, lease
administration, bookkeeping, accounting, taxes, technology, and
other services as identified in Exhibit A to the Term Sheet.
e. Additional Provisions: During the Term, the Parties will
negotiate in good faith to resolve (1) any request by Toys
Delaware for the continued occupancy of the GRC after the end of
the Term and (2) any request by the Propco I Debtors for Toys
Delaware to continue providing the services set forth in the Term
Sheet after the end of the Term.
Karen M. Crowley of Crowley Liberatore Ryan & Brogan, P.C.,
counsel to the Propco I Debtors, explains granting the relief
requested will facilitate the continued wind-down of the Debtors'
U.S. operations without the disruption of relocating employees who
are currently working at the GRC. In addition, the arrangement
eliminates the possibility of expensive, distracting and
protracted litigation over the 62-day Term while the Parties
negotiate in good faith any requests by Toys Delaware for the
continued occupancy of the GRC after the end of the 62-day Term
and any requests by Propco I for continued services after the end
of the 62-day Term. The Propco I Debtors also benefit by this
arrangement by the receipt of shared services from Toys Delaware
in lieu of Base Rent and in the payment of property level
expenses, as set forth in the Term Sheet. The Parties believe, in
their respective business judgments, that entry into the Term
Sheet is warranted under the circumstances.
About Toys R Us, Inc.
Toys "R" Us, Inc., was an American toy and juvenile-products
retailer founded in 1948 and headquartered in Wayne, New Jersey,
in the New York City metropolitan area. Merchandise was sold in
880 Toys "R" Us and Babies "R" Us stores in the United States,
Puerto Rico and Guam, and in more than 780 international stores
and more than 245 licensed stores in 37 countries and
jurisdictions. Merchandise was also sold at e-commerce sites
including Toysrus.com and Babiesrus.com.
On July 21, 2005, a consortium of Bain Capital Partners LLC,
Kohlberg Kravis Roberts, and Vornado Realty Trust invested $1.3
billion to complete a $6.6 billion leveraged buyout of the
company.
Toys "R" Us is a privately owned entity but still files with the
U.S. Securities and Exchange Commission as required by its debt
agreements.
The Company's consolidated balance sheet showed $6.572 billion in
assets, $7.891 billion in liabilities, and a stockholders' deficit
of $1.319 billion as of April 29, 2017.
Toys "R" Us, Inc., and certain of its U.S. subsidiaries and its
Canadian subsidiary voluntarily filed for relief under Chapter 11
of the Bankruptcy Code (Bankr. E.D. Va. Lead Case No. Case No.
17-34665) on Sept. 19, 2017. In addition, the Company's Canadian
subsidiary voluntarily commenced parallel proceedings under the
Companies' Creditors Arrangement Act ("CCAA") in Canada in the
Ontario Superior Court of Justice. The Company's operations
outside of the U.S. and Canada, including its 255 licensed stores
and joint venture partnership in Asia, which are separate
entities, were not part of the Chapter 11 filing and CCAA
proceedings.
Grant Thornton is the monitor appointed in the CCAA case.
Judge Keith L. Phillips presides over the Chapter 11 cases.
In the Chapter 11 cases, Kirkland & Ellis LLP and Kirkland & Ellis
International LLP serve as the Debtors' legal counsel. Kutak Rock
LLP serves as co-counsel. Toys "R" Us employed Alvarez & Marsal
North America, LLC as its restructuring advisor; and Lazard Freres
& Co. LLC as its investment banker. It hired Prime Clerk LLC as
claims and noticing agent. Consensus Advisory Services LLC and
Consensus Securities LLC, serve as sale process investment banker.
A&G Realty Partners, LLC, serves as its real estate advisor.
On Sept. 26, 2017, the U.S. Trustee for Region 4 appointed an
official committee of unsecured creditors. The Committee retained
Kramer Levin Naftalis & Frankel LLP as its legal counsel; Wolcott
Rivers, P.C., as local counsel; FTI Consulting, Inc. as financial
advisor; and Moelis & Company LLC as investment banker.
Liquidation of U.S. Stores
Toys "R" Us, Inc., on March 15, 2018, filed with the U.S.
Bankruptcy Court a motion seeking Bankruptcy Court approval to
start the process of conducting an orderly wind-down of its U.S.
business and liquidation of inventory in all 735 of the Company's
U.S. stores, including stores in Puerto Rico. The company cited
that it no longer has the financial support to continue operations
in the United States. The company said it would shut down in the
U.S., and sell its operations in Canada, Asia and Europe.
Toys "R" Us UK
Toys "R" Us Limited, Toys "R" Us, Inc.'s UK arm with 105 stores
and 3,000 employees, was sent into administration in the United
Kingdom in February 2018.
Arron Kendall and Simon Thomas of Moorfields Advisory Limited, 88
Wood Street, London, EC2V 7QF were appointed Joint Administrators
on Feb. 28, 2018. The Administrators now manage the affairs,
business and property of the Company. The Administrators act as
agents only and without personal liability.
The Administrators said they will make every effort to secure a
buyer for all or part of the business.
Propco I Debtors
Toys "R" Us Property Company I, LLC and its subsidiaries own fee
and leasehold interests in more than 300 properties in the United
States. The Debtors lease the properties on a triple-net basis
under a master lease to Toys-Delaware, the operating entity for
all of TRU's North American businesses, which operates the
majority of the properties as Toys "R" Us stores, Babies "R" Us
stores or side-by-side stores, or subleases them to alternative
retailers.
Toys "R" Us Property was founded in 2005 and is headquartered in
Wayne, New Jersey. Toys 'R' Us Property operates as a subsidiary
of Toys "R" Us Inc.
Company LLC, MAP Real Estate LLC, TRU 2005 RE I LLC, TRU 2005 RE
II Trust, and Wayne Real Estate Company LLC (collectively, "Propco
I Debtors") sought protection under Chapter 11 of the Bankruptcy
Code (Bankr. E.D. Va. Lead Case No. 18-31429) on March 20, 2018.
The Propco I Debtors sought and obtained procedural consolidation
and joint administration of their Chapter 11 cases, separate from
the Toys "R" Us Debtors' Chapter 11 cases.
The Propco I Debtors estimated assets of $500 million to $1
billion and liabilities of $500 million to $1 billion.
Judge Keith L. Phillips presides over the Propco I Debtors' cases.
The Propco I Debtors hired Klehr Harrison Harvey Branzburg, LLP;
and Crowley, Liberatore, Ryan & Brogan, P.C., as co-counsel. The
Debtors also tapped Kutak Rock LLP. They hired Goldin Associates,
LLC, as financial advisors.
TOYS R US: Cullen and Dykman Represents Levatoy, 2 Others
---------------------------------------------------------
Cullen and Dykman LLP, pursuant to Rule 2019 of the Federal Rules
of Bankruptcy Procedure, on June 29, 2018, filed an amended
verified statement in connection with its representation of three
creditors in the cases of Toys "R" Us, Inc., et al:
a. Levatoy, LLC
465 W. Main Street
Wyckoff, NJ 07481
b. G&L Building Corp.
39 Division Street
Sag Harbor, New York 11963
c. Bright Kingdom Development, Ltd.
Unit No. 337
3/FL Peninsula Center
TST East Kowloon, Hong Kong
Levatoy is a creditor by virtue of monies owed for goods sold and
delivered prior to and subsequent to the Petition Date. G&L is a
landlord to one of the Debtors. BKD is a creditor by virtue of
monies owed for goods sold and delivered subsequent to the
Petition
Date.
The creditors each approached Cullen and Dykman LLP separately,
requesting representation following the commencement of the
Debtors' bankruptcy cases.
Cullen and Dykman LLP holds no claim against or interest in the
Debtors.
Baker, Donelson, Bearman, Caldwell & Berkowitz P.C., which
represents Levatoy and G&L, holds no claim or interest in the
Debtors.
The creditors' attorneys:
J. David Folds, Esq.
BAKER, DONELSON, BEARMAN, CALDWELL & BERKOWITZ, P.C.
901 K Street NW, Suite 900
Washington, D.C. 20001
Tel: (202) 508-3441
Facsimile: (202) 220-2241
E-mail: dfolds@bakerdonelson.com
- and -
Bonnie L. Pollack, Esq.
CULLEN AND DYKMAN LLP
100 Quentin Roosevelt Boulevard
Garden City, New York 11530
Tel: (516) 357-3700
About Toys R Us, Inc.
Toys "R" Us, Inc., was an American toy and juvenile-products
retailer founded in 1948 and headquartered in Wayne, New Jersey,
in the New York City metropolitan area. Merchandise was sold in
880 Toys "R" Us and Babies "R" Us stores in the United States,
Puerto Rico and Guam, and in more than 780 international stores
and more than 245 licensed stores in 37 countries and
jurisdictions. Merchandise was also sold at e-commerce sites
including Toysrus.com and Babiesrus.com.
On July 21, 2005, a consortium of Bain Capital Partners LLC,
Kohlberg Kravis Roberts, and Vornado Realty Trust invested $1.3
billion to complete a $6.6 billion leveraged buyout of the
company.
Toys "R" Us is a privately owned entity but still files with the
U.S. Securities and Exchange Commission as required by its debt
agreements.
The Company's consolidated balance sheet showed $6.572 billion in
assets, $7.891 billion in liabilities, and a stockholders' deficit
of $1.319 billion as of April 29, 2017.
Toys "R" Us, Inc., and certain of its U.S. subsidiaries and its
Canadian subsidiary voluntarily filed for relief under Chapter 11
of the Bankruptcy Code (Bankr. E.D. Va. Lead Case No. Case No.
17-34665) on Sept. 19, 2017. In addition, the Company's Canadian
subsidiary voluntarily commenced parallel proceedings under the
Companies' Creditors Arrangement Act ("CCAA") in Canada in the
Ontario Superior Court of Justice. The Company's operations
outside of the U.S. and Canada, including its 255 licensed stores
and joint venture partnership in Asia, which are separate
entities, were not part of the Chapter 11 filing and CCAA
proceedings.
Grant Thornton is the monitor appointed in the CCAA case.
Judge Keith L. Phillips presides over the Chapter 11 cases.
In the Chapter 11 cases, Kirkland & Ellis LLP and Kirkland & Ellis
International LLP serve as the Debtors' legal counsel. Kutak Rock
LLP serves as co-counsel. Toys "R" Us employed Alvarez & Marsal
North America, LLC as its restructuring advisor; and Lazard Freres
& Co. LLC as its investment banker. It hired Prime Clerk LLC as
claims and noticing agent. Consensus Advisory Services LLC and
Consensus Securities LLC, serve as sale process investment banker.
A&G Realty Partners, LLC, serves as its real estate advisor.
On Sept. 26, 2017, the U.S. Trustee for Region 4 appointed an
official committee of unsecured creditors. The Committee retained
Kramer Levin Naftalis & Frankel LLP as its legal counsel; Wolcott
Rivers, P.C., as local counsel; FTI Consulting, Inc. as financial
advisor; and Moelis & Company LLC as investment banker.
Liquidation of U.S. Stores
Toys "R" Us, Inc., on March 15, 2018, filed with the U.S.
Bankruptcy Court a motion seeking Bankruptcy Court approval to
start the process of conducting an orderly wind-down of its U.S.
business and liquidation of inventory in all 735 of the Company's
U.S. stores, including stores in Puerto Rico. The company cited
that it no longer has the financial support to continue operations
in the United States. The company said it would shut down in the
U.S., and sell its operations in Canada, Asia and Europe.
Toys "R" Us UK
Toys "R" Us Limited, Toys "R" Us, Inc.'s UK arm with 105 stores
and 3,000 employees, was sent into administration in the United
Kingdom in February 2018.
Arron Kendall and Simon Thomas of Moorfields Advisory Limited, 88
Wood Street, London, EC2V 7QF were appointed Joint Administrators
on Feb. 28, 2018. The Administrators now manage the affairs,
business and property of the Company. The Administrators act as
agents only and without personal liability.
The Administrators said they will make every effort to secure a
buyer for all or part of the business.
Propco I Debtors
Toys "R" Us Property Company I, LLC and its subsidiaries own fee
and leasehold interests in more than 300 properties in the United
States. The Debtors lease the properties on a triple-net basis
under a master lease to Toys-Delaware, the operating entity for
all of TRU's North American businesses, which operates the
majority of the properties as Toys "R" Us stores, Babies "R" Us
stores or side-by-side stores, or subleases them to alternative
retailers.
Toys "R" Us Property was founded in 2005 and is headquartered in
Wayne, New Jersey. Toys 'R' Us Property operates as a subsidiary
of Toys "R" Us Inc.
Company LLC, MAP Real Estate LLC, TRU 2005 RE I LLC, TRU 2005 RE
II Trust, and Wayne Real Estate Company LLC (collectively, "Propco
I Debtors") sought protection under Chapter 11 of the Bankruptcy
Code (Bankr. E.D. Va. Lead Case No. 18-31429) on March 20, 2018.
The Propco I Debtors sought and obtained procedural consolidation
and joint administration of their Chapter 11 cases, separate from
the Toys "R" Us Debtors' Chapter 11 cases.
The Propco I Debtors estimated assets of $500 million to $1
billion and liabilities of $500 million to $1 billion.
Judge Keith L. Phillips presides over the Propco I Debtors' cases.
The Propco I Debtors hired Klehr Harrison Harvey Branzburg, LLP;
and Crowley, Liberatore, Ryan & Brogan, P.C., as co-counsel. The
Debtors also tapped Kutak Rock LLP. They hired Goldin Associates,
LLC, as financial advisors.
TOYS R US: Bids Farewell to U.S. Shoppers
-----------------------------------------
Toys "R" Us Inc stores across the United States marked their final
day in business on Friday, June 29, 2018, after commencing
going-out-of-business sales at all 735 U.S. stores on March 23.
The bankrupt toy retailer posted a farewell message to customers
on its Web site next to an image of its iconic Geoffrey the
Giraffe mascot thanking them and urging them to "Play on!"
The retailer said, "Thanks to each of you who shared your amazing
journal to (and through) parenthood with us, and to every
grandparent, aunt, uncle, brother and sister who's built a
couch-cushion rocket ship, made up a hero adventure, or invented
something gooey. Promise us joint this one thing: Don't ever grow
up. Play on!"
About Toys R Us, Inc.
Toys "R" Us, Inc., was an American toy and juvenile-products
retailer founded in 1948 and headquartered in Wayne, New Jersey,
in the New York City metropolitan area. Merchandise was sold in
880 Toys "R" Us and Babies "R" Us stores in the United States,
Puerto Rico and Guam, and in more than 780 international stores
and more than 245 licensed stores in 37 countries and
jurisdictions. Merchandise was also sold at e-commerce sites
including Toysrus.com and Babiesrus.com.
On July 21, 2005, a consortium of Bain Capital Partners LLC,
Kohlberg Kravis Roberts, and Vornado Realty Trust invested $1.3
billion to complete a $6.6 billion leveraged buyout of the
company.
Toys "R" Us is a privately owned entity but still files with the
U.S. Securities and Exchange Commission as required by its debt
agreements.
The Company's consolidated balance sheet showed $6.572 billion in
assets, $7.891 billion in liabilities, and a stockholders' deficit
of $1.319 billion as of April 29, 2017.
Toys "R" Us, Inc., and certain of its U.S. subsidiaries and its
Canadian subsidiary voluntarily filed for relief under Chapter 11
of the Bankruptcy Code (Bankr. E.D. Va. Lead Case No. Case No.
17-34665) on Sept. 19, 2017. In addition, the Company's Canadian
subsidiary voluntarily commenced parallel proceedings under the
Companies' Creditors Arrangement Act ("CCAA") in Canada in the
Ontario Superior Court of Justice. The Company's operations
outside of the U.S. and Canada, including its 255 licensed stores
and joint venture partnership in Asia, which are separate
entities, were not part of the Chapter 11 filing and CCAA
proceedings.
Grant Thornton is the monitor appointed in the CCAA case.
Judge Keith L. Phillips presides over the Chapter 11 cases.
In the Chapter 11 cases, Kirkland & Ellis LLP and Kirkland & Ellis
International LLP serve as the Debtors' legal counsel. Kutak Rock
LLP serves as co-counsel. Toys "R" Us employed Alvarez & Marsal
North America, LLC as its restructuring advisor; and Lazard Freres
& Co. LLC as its investment banker. It hired Prime Clerk LLC as
claims and noticing agent. Consensus Advisory Services LLC and
Consensus Securities LLC, serve as sale process investment banker.
A&G Realty Partners, LLC, serves as its real estate advisor.
On Sept. 26, 2017, the U.S. Trustee for Region 4 appointed an
official committee of unsecured creditors. The Committee retained
Kramer Levin Naftalis & Frankel LLP as its legal counsel; Wolcott
Rivers, P.C., as local counsel; FTI Consulting, Inc. as financial
advisor; and Moelis & Company LLC as investment banker.
Liquidation of U.S. Stores
Toys "R" Us, Inc., on March 15, 2018, filed with the U.S.
Bankruptcy Court a motion seeking Bankruptcy Court approval to
start the process of conducting an orderly wind-down of its U.S.
business and liquidation of inventory in all 735 of the Company's
U.S. stores, including stores in Puerto Rico. The company cited
that it no longer has the financial support to continue operations
in the United States. The company said it would shut down in the
U.S., and sell its operations in Canada, Asia and Europe.
Toys "R" Us UK
Toys "R" Us Limited, Toys "R" Us, Inc.'s UK arm with 105 stores
and 3,000 employees, was sent into administration in the United
Kingdom in February 2018.
Arron Kendall and Simon Thomas of Moorfields Advisory Limited, 88
Wood Street, London, EC2V 7QF were appointed Joint Administrators
on Feb. 28, 2018. The Administrators now manage the affairs,
business and property of the Company. The Administrators act as
agents only and without personal liability.
The Administrators said they will make every effort to secure a
buyer for all or part of the business.
Propco I Debtors
Toys "R" Us Property Company I, LLC and its subsidiaries own fee
and leasehold interests in more than 300 properties in the United
States. The Debtors lease the properties on a triple-net basis
under a master lease to Toys-Delaware, the operating entity for
all of TRU's North American businesses, which operates the
majority of the properties as Toys "R" Us stores, Babies "R" Us
stores or side-by-side stores, or subleases them to alternative
retailers.
Toys "R" Us Property was founded in 2005 and is headquartered in
Wayne, New Jersey. Toys 'R' Us Property operates as a subsidiary
of Toys "R" Us Inc.
Company LLC, MAP Real Estate LLC, TRU 2005 RE I LLC, TRU 2005 RE
II Trust, and Wayne Real Estate Company LLC (collectively, "Propco
I Debtors") sought protection under Chapter 11 of the Bankruptcy
Code (Bankr. E.D. Va. Lead Case No. 18-31429) on March 20, 2018.
The Propco I Debtors sought and obtained procedural consolidation
and joint administration of their Chapter 11 cases, separate from
the Toys "R" Us Debtors' Chapter 11 cases.
The Propco I Debtors estimated assets of $500 million to $1
billion and liabilities of $500 million to $1 billion.
Judge Keith L. Phillips presides over the Propco I Debtors' cases.
The Propco I Debtors hired Klehr Harrison Harvey Branzburg, LLP;
and Crowley, Liberatore, Ryan & Brogan, P.C., as co-counsel. The
Debtors also tapped Kutak Rock LLP. They hired Goldin Associates,
LLC, as financial advisors.
TOYS R US: B-4 Lenders Group Membership Changes
-----------------------------------------------
Pursuant to Rule 2019 of the Federal Rules of Bankruptcy
Procedure, the Ad Hoc Group of B-4 Lenders submitted on June 29,
2018, a third amended verified statement reflecting changes to the
membership of the group and other amendments.
The Ad Hoc Group of B-4 Lenders is comprised of certain
unaffiliated holders of indebtedness constituting Term B-4 Loans
advanced pursuant to that certain Amended and Restated Credit
Agreement, dated as of August 24, 2010, by and among, inter alia,
Toys "R" Us-Delaware, Inc., as Borrower, Bank of America, N.A., as
Administrative Agent and Collateral Agent and the lenders named
therein.
Wachtell, Lipton, Rosen & Katz and McGuireWoods LLP are counsel to
Oaktree Opps X Holdco Ltd.; Oaktree Opportunities Fund X Holdings
(Delaware), L.P.; and Oaktree Value Opportunities Fund Holdings,
L.P. (collectively, "Oaktree"); and to certain funds and/or
accounts managed or advised by Angelo, Gordon & Co., L.P.;
Franklin Mutual Advisers, LLC; Highland Capital Management, LP;
and Solus Alternative Asset Management LP (together with Oaktree,
each a "Member" and collectively, the "Client Group").
Each Member holds, or is a beneficial holder of (or investment
advisor or manager to a beneficial holder of) economic interests
relating to the Debtors.
In accordance with Bankruptcy Rule 2019, the name and address of
each member of the Client Group, and the nature and amount of
disclosable economic interests held by each member as of June 29,
2018 are:
1. Angelo, Gordon & Co., L.P.,
245 Park Ave, 26th Floor
New York, NY 10167
* Delaware Term Loan DIP: $51,622,604.40
* Prepetition Delaware Term Loan: $202,785,428.85 of Term B-
4 Loans
2. Franklin Mutual Advisers, LLC
101 John F Kennedy Pkwy 3rd Floor
Short Hills, NJ 07078
* Delaware Term Loan DIP: $99,674,735.61
* Prepetition Delaware Term Loan: $180,079,168.66 of Term B-
4 Loans
3. Highland Capital Management, LP
300 Crescent Court, Suite 700
Dallas, TX 75201
* Delaware Term Loan DIP: $30,444,108.91
* Prepetition Delaware Term Loan: $76,381,462.33 of Term B-4
Loans
4. Oaktree Opps X Holdco Ltd.,
Oaktree Opportunities Fund X Holdings (Delaware), L.P., and
Oaktree Value Opportunities Fund Holdings, L.P.
333 South Grand Avenue
28th Floor
Los Angeles, CA 90071-1530
* Prepetition Delaware Term Loan: $62,729,281.44 of Term B-4
Loans
* $5,000,000 of 12% Senior Secured Notes Due 2021 issued by
TRU Taj LLC and TRU Taj Finance, Inc.
* Toys "R" Us Property Company I, LLC
Term Loans: $25,000,000
5. Solus Alternative Asset Management LP
410 Park Avenue
New York, NY 10022
* Delaware Term Loan DIP: $31,445,958.39
* Prepetition Delaware Term Loan: $221,026,088.80 of Term B-
4 Loans
* $16,677,515.50 of Term B-3 Loans
* $38,283,901.91 of Term B-2 Loans
* Toys "R" Us Property Company I, LLC
Term Loans: $1,000,000
Counsel to the Ad Hoc Group of B-4 Lenders:
Dion W. Hayes
Sarah B. Boehm
McGUIREWOODS LLP
Gateway Plaza
800 East Canal Street
Richmond, Virginia 23219
Telephone: (804) 775-7487
Facsimile: (804) 698-2255
E-mail: dhayes@mcguirewoods.com
sboehm@mcguirewoods.com
- and -
Douglas M. Foley
McGUIREWOODS LLP
2001 K Street N.W.
Washington, DC 20006
Telephone: (202) 857-1720
Facsimile: (202) 828-3301
E-mail: dfoley@mcguirewoods.com
- and -
Joshua A. Feltman
Emil A. Kleinhaus
WACHTELL, LIPTON, ROSEN & KATZ
51 West 52nd Street
New York, New York 10019
Telephone: (212) 403-1000
Facsimile: (212) 403-2000
E-mail: eakleinhaus@wlrk.com
jafeltman@wlrk.com
About Toys R Us, Inc.
Toys "R" Us, Inc., was an American toy and juvenile-products
retailer founded in 1948 and headquartered in Wayne, New Jersey,
in the New York City metropolitan area. Merchandise was sold in
880 Toys "R" Us and Babies "R" Us stores in the United States,
Puerto Rico and Guam, and in more than 780 international stores
and more than 245 licensed stores in 37 countries and
jurisdictions. Merchandise was also sold at e-commerce sites
including Toysrus.com and Babiesrus.com.
On July 21, 2005, a consortium of Bain Capital Partners LLC,
Kohlberg Kravis Roberts, and Vornado Realty Trust invested $1.3
billion to complete a $6.6 billion leveraged buyout of the
company.
Toys "R" Us is a privately owned entity but still files with the
U.S. Securities and Exchange Commission as required by its debt
agreements.
The Company's consolidated balance sheet showed $6.572 billion in
assets, $7.891 billion in liabilities, and a stockholders' deficit
of $1.319 billion as of April 29, 2017.
Toys "R" Us, Inc., and certain of its U.S. subsidiaries and its
Canadian subsidiary voluntarily filed for relief under Chapter 11
of the Bankruptcy Code (Bankr. E.D. Va. Lead Case No. Case No.
17-34665) on Sept. 19, 2017. In addition, the Company's Canadian
subsidiary voluntarily commenced parallel proceedings under the
Companies' Creditors Arrangement Act ("CCAA") in Canada in the
Ontario Superior Court of Justice. The Company's operations
outside of the U.S. and Canada, including its 255 licensed stores
and joint venture partnership in Asia, which are separate
entities, were not part of the Chapter 11 filing and CCAA
proceedings.
Grant Thornton is the monitor appointed in the CCAA case.
Judge Keith L. Phillips presides over the Chapter 11 cases.
In the Chapter 11 cases, Kirkland & Ellis LLP and Kirkland & Ellis
International LLP serve as the Debtors' legal counsel. Kutak Rock
LLP serves as co-counsel. Toys "R" Us employed Alvarez & Marsal
North America, LLC as its restructuring advisor; and Lazard Freres
& Co. LLC as its investment banker. It hired Prime Clerk LLC as
claims and noticing agent. Consensus Advisory Services LLC and
Consensus Securities LLC, serve as sale process investment banker.
A&G Realty Partners, LLC, serves as its real estate advisor.
On Sept. 26, 2017, the U.S. Trustee for Region 4 appointed an
official committee of unsecured creditors. The Committee retained
Kramer Levin Naftalis & Frankel LLP as its legal counsel; Wolcott
Rivers, P.C., as local counsel; FTI Consulting, Inc. as financial
advisor; and Moelis & Company LLC as investment banker.
Liquidation of U.S. Stores
Toys "R" Us, Inc., on March 15, 2018, filed with the U.S.
Bankruptcy Court a motion seeking Bankruptcy Court approval to
start the process of conducting an orderly wind-down of its U.S.
business and liquidation of inventory in all 735 of the Company's
U.S. stores, including stores in Puerto Rico. The company cited
that it no longer has the financial support to continue operations
in the United States. The company said it would shut down in the
U.S., and sell its operations in Canada, Asia and Europe.
Toys "R" Us UK
Toys "R" Us Limited, Toys "R" Us, Inc.'s UK arm with 105 stores
and 3,000 employees, was sent into administration in the United
Kingdom in February 2018.
Arron Kendall and Simon Thomas of Moorfields Advisory Limited, 88
Wood Street, London, EC2V 7QF were appointed Joint Administrators
on Feb. 28, 2018. The Administrators now manage the affairs,
business and property of the Company. The Administrators act as
agents only and without personal liability.
The Administrators said they will make every effort to secure a
buyer for all or part of the business.
Propco I Debtors
Toys "R" Us Property Company I, LLC and its subsidiaries own fee
and leasehold interests in more than 300 properties in the United
States. The Debtors lease the properties on a triple-net basis
under a master lease to Toys-Delaware, the operating entity for
all of TRU's North American businesses, which operates the
majority of the properties as Toys "R" Us stores, Babies "R" Us
stores or side-by-side stores, or subleases them to alternative
retailers.
Toys "R" Us Property was founded in 2005 and is headquartered in
Wayne, New Jersey. Toys 'R' Us Property operates as a subsidiary
of Toys "R" Us Inc.
Company LLC, MAP Real Estate LLC, TRU 2005 RE I LLC, TRU 2005 RE
II Trust, and Wayne Real Estate Company LLC (collectively, "Propco
I Debtors") sought protection under Chapter 11 of the Bankruptcy
Code (Bankr. E.D. Va. Lead Case No. 18-31429) on March 20, 2018.
The Propco I Debtors sought and obtained procedural consolidation
and joint administration of their Chapter 11 cases, separate from
the Toys "R" Us Debtors' Chapter 11 cases.
The Propco I Debtors estimated assets of $500 million to $1
billion and liabilities of $500 million to $1 billion.
Judge Keith L. Phillips presides over the Propco I Debtors' cases.
The Propco I Debtors hired Klehr Harrison Harvey Branzburg, LLP;
and Crowley, Liberatore, Ryan & Brogan, P.C., as co-counsel. The
Debtors also tapped Kutak Rock LLP. They hired Goldin Associates,
LLC, as financial advisors.
TOYS R US: E. Frejka Named as Consumer Privacy Ombudsman
--------------------------------------------------------
John P. Fitzgerald, III, the Acting United States Trustee for
Region Four appoints Elis Frejka, as Consumer Privacy Ombudsman in
the Chapter 11 cases of Toys R Us Inc. and its affiliated debtors.
Elise Frejka is a partner in the law firm of Frejka PLLC, which is
located at 420 Lexington Avenue, Suite 310, New York, New York
10170.
The United States Trustee is represented by:
William K. Harrington
United States Trustee Region 1
Shannon Pecoraro, Esq.
Office of the United States Trustee
701 East Broad Street, Suite 4304
Richmond, Virginia 23219
Phone: (804) 771-2310
Email: shannon.pecoraro@usdoj.gov
-- and --
Gerard R. Vetter, Esq.
Lynn Kohen, Esq.
Office of the United States Trustee
6305 Ivy Lane, Suite 600
Greenbelt, MD 20770
Phone: (301)344-6221
Email: lynn.a.kohen@usdoj.gov
About Toys R Us, Inc.
Toys "R" Us, Inc., was an American toy and juvenile-products
retailer founded in 1948 and headquartered in Wayne, New Jersey,
in the New York City metropolitan area. Merchandise was sold in
880 Toys "R" Us and Babies "R" Us stores in the United States,
Puerto Rico and Guam, and in more than 780 international stores
and more than 245 licensed stores in 37 countries and
jurisdictions. Merchandise was also sold at e-commerce sites
including Toysrus.com and Babiesrus.com.
On July 21, 2005, a consortium of Bain Capital Partners LLC,
Kohlberg Kravis Roberts, and Vornado Realty Trust invested $1.3
billion to complete a $6.6 billion leveraged buyout of the
company.
Toys "R" Us is a privately owned entity but still files with the
U.S. Securities and Exchange Commission as required by its debt
agreements.
The Company's consolidated balance sheet showed $6.572 billion in
assets, $7.891 billion in liabilities, and a stockholders' deficit
of $1.319 billion as of April 29, 2017.
Toys "R" Us, Inc., and certain of its U.S. subsidiaries and its
Canadian subsidiary voluntarily filed for relief under Chapter 11
of the Bankruptcy Code (Bankr. E.D. Va. Lead Case No. Case No.
17-34665) on Sept. 19, 2017. In addition, the Company's Canadian
subsidiary voluntarily commenced parallel proceedings under the
Companies' Creditors Arrangement Act ("CCAA") in Canada in the
Ontario Superior Court of Justice. The Company's operations
outside of the U.S. and Canada, including its 255 licensed stores
and joint venture partnership in Asia, which are separate
entities, were not part of the Chapter 11 filing and CCAA
proceedings.
Grant Thornton is the monitor appointed in the CCAA case.
Judge Keith L. Phillips presides over the Chapter 11 cases.
In the Chapter 11 cases, Kirkland & Ellis LLP and Kirkland & Ellis
International LLP serve as the Debtors' legal counsel. Kutak Rock
LLP serves as co-counsel. Toys "R" Us employed Alvarez & Marsal
North America, LLC as its restructuring advisor; and Lazard Freres
& Co. LLC as its investment banker. It hired Prime Clerk LLC as
claims and noticing agent. Consensus Advisory Services LLC and
Consensus Securities LLC, serve as sale process investment banker.
A&G Realty Partners, LLC, serves as its real estate advisor.
On Sept. 26, 2017, the U.S. Trustee for Region 4 appointed an
official committee of unsecured creditors. The Committee retained
Kramer Levin Naftalis & Frankel LLP as its legal counsel; Wolcott
Rivers, P.C., as local counsel; FTI Consulting, Inc. as financial
advisor; and Moelis & Company LLC as investment banker.
Liquidation of U.S. Stores
Toys "R" Us, Inc., on March 15, 2018, filed with the U.S.
Bankruptcy Court a motion seeking Bankruptcy Court approval to
start the process of conducting an orderly wind-down of its U.S.
business and liquidation of inventory in all 735 of the Company's
U.S. stores, including stores in Puerto Rico. The company cited
that it no longer has the financial support to continue operations
in the United States. The company said it would shut down in the
U.S., and sell its operations in Canada, Asia and Europe.
Toys "R" Us UK
Toys "R" Us Limited, Toys "R" Us, Inc.'s UK arm with 105 stores
and 3,000 employees, was sent into administration in the United
Kingdom in February 2018.
Arron Kendall and Simon Thomas of Moorfields Advisory Limited, 88
Wood Street, London, EC2V 7QF were appointed Joint Administrators
on Feb. 28, 2018. The Administrators now manage the affairs,
business and property of the Company. The Administrators act as
agents only and without personal liability.
The Administrators said they will make every effort to secure a
buyer for all or part of the business.
Propco I Debtors
Toys "R" Us Property Company I, LLC and its subsidiaries own fee
and leasehold interests in more than 300 properties in the United
States. The Debtors lease the properties on a triple-net basis
under a master lease to Toys-Delaware, the operating entity for
all of TRU's North American businesses, which operates the
majority of the properties as Toys "R" Us stores, Babies "R" Us
stores or side-by-side stores, or subleases them to alternative
retailers.
Toys "R" Us Property was founded in 2005 and is headquartered in
Wayne, New Jersey. Toys 'R' Us Property operates as a subsidiary
of Toys "R" Us Inc.
Company LLC, MAP Real Estate LLC, TRU 2005 RE I LLC, TRU 2005 RE
II Trust, and Wayne Real Estate Company LLC (collectively, "Propco
I Debtors") sought protection under Chapter 11 of the Bankruptcy
Code (Bankr. E.D. Va. Lead Case No. 18-31429) on March 20, 2018.
The Propco I Debtors sought and obtained procedural consolidation
and joint administration of their Chapter 11 cases, separate from
the Toys "R" Us Debtors' Chapter 11 cases.
The Propco I Debtors estimated assets of $500 million to $1
billion and liabilities of $500 million to $1 billion.
Judge Keith L. Phillips presides over the Propco I Debtors' cases.
The Propco I Debtors hired Klehr Harrison Harvey Branzburg, LLP;
and Crowley, Liberatore, Ryan & Brogan, P.C., as co-counsel. The
Debtors also tapped Kutak Rock LLP. They hired Goldin Associates,
LLC, as financial advisors.
***********
Monday's edition of the TCR-LA delivers a list of indicative
prices for bond issues that reportedly trade well below par.
Prices are obtained by TCR-LA editors from a variety of outside
sources during the prior week we think are reliable. Those
sources may not, however, be complete or accurate. The Monday
Bond Pricing table is compiled on the Friday prior to publication.
Prices reported are not intended to reflect actual trades. Prices
for actual trades are probably different. Our objective is to
share information, not make markets in publicly traded securities.
Nothing in the TCR-LA constitutes an offer or solicitation to buy
or sell any security of any kind. It is likely that some entity
affiliated with a TCR-LA editor holds some position in the
issuers' public debt and equity securities about which we report.
Tuesday's edition of the TCR-LA features a list of companies with
insolvent balance sheets obtained by our editors based on the
latest balance sheets publicly available a day prior to
publication. At first glance, this list may look like the
definitive compilation of stocks that are ideal to sell short.
Don't be fooled. Assets, for example, reported at historical cost
net of depreciation may understate the true value of a firm's
assets. A company may establish reserves on its balance sheet for
liabilities that may never materialize. The prices at which
equity securities trade in public market are determined by more
than a balance sheet solvency test.
Submissions about insolvency-related conferences are encouraged.
Send announcements to conferences@bankrupt.com
***********
S U B S C R I P T I O N I N F O R M A T I O N
Troubled Company Reporter-Latin America is a daily newsletter
co-published by Bankruptcy Creditors' Service, Inc., Fairless
Hills, Pennsylvania, USA, and Beard Group, Inc., Washington, D.C.,
USA, Marites O. Claro, Joy A. Agravante, Rousel Elaine T.
Fernandez, Julie Anne L. Toledo, Ivy B. Magdadaro, and Peter A.
Chapman, Editors.
Copyright 2018. All rights reserved. ISSN 1529-2746.
This material is copyrighted and any commercial use, resale or
publication in any form (including e-mail forwarding, electronic
re-mailing and photocopying) is strictly prohibited without prior
written permission of the publishers.
Information contained herein is obtained from sources believed to
be reliable, but is not guaranteed.
The TCR Latin America subscription rate is US$775 per half-year,
delivered via e-mail. Additional e-mail subscriptions for members
of the same firm for the term of the initial subscription or
balance thereof are US$25 each. For subscription information,
contact Peter A. Chapman at 215-945-7000.
.
* * * End of Transmission * * *