*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).
Stephen Kates, Financial Analyst at Bankrate, joins to discuss the Fed’s 25-basis-point rate cut, inflation risks, and what it all means for consumers and marke
Big tech earnings take center stage as investors digest results from Alphabet, Meta, Microsoft, Amazon, and Apple, with insights from Gil Luria of D.A. Davidson
Disney content has gone dark on YouTube TV, leaving subscribers of the Google-owned live streaming platform without access to major networks like ESPN and ABC. That’s because the companies have failed to reach a new licensing deal to keep Disney channels on YouTube TV. Depending on how long it lasts, the dispute could particularly impact coverage of U.S. college football matchups over the weekend — on top of other news and entertainment disruptions that have already arrived. In the meantime, YouTube TV subscribers who want to watch Disney channels could have little choice other than turning to the company’s own platforms, which come with their own price tags.
President Donald Trump said he has decided to lower his combined tariff rates on imports of Chinese goods to 47% after talks with Chinese leader Xi Jinping on curbing fentanyl trafficking.
Universal Music Group and AI platform Udio have settled a copyright lawsuit and will collaborate on a new music creation and streaming platform. The companies announced on Wednesday that they reached a compensatory legal settlement and new licensing agreements. These agreements aim to provide more revenue opportunities for Universal's artists and songwriters. The rise of AI song generation tools like Udio has disrupted the music streaming industry, leading to accusations from record labels. This deal marks the first since Universal and others sued Udio and Suno last year. Financial terms of the settlement weren't disclosed.
