*By Carlo Versano*
When Toys 'R' Us filed for bankruptcy protection last year, the narrative was very familiar: yet another large retailer failing to compete in Amazon's e-world.
But the demise of one of the country's most iconic retail brands ー emotional ties to countless childhoods and all ー had less to do with Amazon and more to do with a small cadre of hedge funds that decided the company was better off dead, said Lillian Rizzo, a bankruptcy reporter for the [Wall Street Journal](https://www.wsj.com/articles/who-killed-toys-r-us-hint-it-wasnt-only-amazon-1535034401).
Rizzo said Friday in an interview on Cheddar that Toys 'R' Us was, despite serious missteps by its leaders, "a viable company that would survive in some way" when it sought bankruptcy restructuring last September.
Suffering under the debt load from a 2005 leveraged buyout and scrambling to keep up with trends in retail and e-commerce, Toys 'R' Us was in bad shape and under pressure because of poor strategizing at the top, Rizzo said.
But its fate wasn't sealed until Solus Alternative Asset Management and a small group of hedge funds essentially "stopped the clock" on the company's reorganization plan.
"These lenders just didn't want to wait," Rizzo said.
Without warning, Toys 'R' Us announced in March that it would liquidate its holdings, putting 33,000 employees out of work and preventing them from collecting severance under bankruptcy law.
Those employees have since protested and reorganized, leading to a series of talks with Toys 'R' Us investors to build a fund for some pay, Rizzo said.
But vendors like Mattel and Crayola were stiffed on shipments made before the liquidation and are now feeling the effects of a world without a single big-box toy store to show off their latest goods.
In this case, Rizzo said, the hedge funds were doing "what hedge funds do": trying to generate returns for investors. But more creditors are taking on larger and more complicated debt loads, which gives them more influence in restructuring decisions.
Indeed, Solus's influence paid off.
"It seems right now that the hedge funds are going to walk away with more of the money," Rizzo said.
For full interview [click here] (https://cheddar.com/videos/who-killed-toys-r-us-2).
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