The sale of Toys “R” Us Inc.'s Asia unit appears likely to get confirmation after a Virginia bankruptcy court overseeing the toy seller’s liquidation approved a settlement with a Hong Kong company that actively tried to thwart the sale.
Fung Retailing Ltd. will withdraw its objections to the sale and cease its ongoing litigation in Hong Kong seeking to block a sale of the Asian venture owned in part by Fung. It will receive a payment of $8.25 million, according to the settlement approved Nov. 30 by Judge Keith L. Phillips of the U.S. Bankruptcy Court for the Eastern District of Virginia.
On Dec. 6 Phillips is scheduled to preside over a hearing to approve the Asian wing’s sale to a group of lenders owed around $760 million. It is the last operating unit of Toys “R” Us, which declared bankruptcy in September 2017.
The court has previously accused Fung of trying to “interfere with,” “foul up,” and “sabotage or stop” an auction of the the company’s Asian entity. The settlement ends those efforts.
Other creditors have filed objections to the sale, however. Oracle Credit Corp. and Oracle America, Inc. have filed papers with the court reserving their rights regarding intellectual property they claim can’t be assigned or transferred to the new owners without Oracle’s consent.
Oracle said In its Oct. 29 objection it was still working with Toys “R” Us to resolve how its licenses will be treated, but, at least as of Nov. 29, the objection remained, according to a notice filed by TRU.
Note-holder Tor Asia Credit Master Fund, L.P. raised another objection. The note-holder complains it was unfairly denied the opportunity to participate with the purchasing lenders in buying the Asia company.
Toys “R” Us is represented by Kirkland & Ellis LLP. Davis Polk & Wardwell LLP represents Fung.
The case is In re: Toys “R” Us, Inc., Bankr. E.D. Va., 17-34665, Order 11/30/18.
To contact the reporter on this story:
To contact the editor responsible for this story: