Case Against Toys“R”Us Leadership Moves to VA; Subpoenas Members
August 4, 2020 | The lawsuit filed against Toys“R”Us (TRU) officers and directors has been moved from New York to Virginia, The Toy Association has learned. In preparation for the proceedings against TRU leadership (who were excluded from claims in the 2018 TRU bankruptcy case and settlement agreement), trade creditors are expected to be subpoenaed for evidence and testimony related to promises and claims made to induce trade shipments. If the lawsuit is successful, any recovery is expected to benefit trade creditors with an enhanced pool of funds for distribution.
Filed by the TRU Creditor Litigation Trust, the lawsuit alleges breaches of fiduciary duty, fraudulent conduct in inducing sales under false pretenses, and unjust enrichment by senior executives and corporate directors in connection with the bankruptcy and liquidation of TRU. Additional details about the original bankruptcy case can be found on The Toy Association's Toys“R”Us Bankruptcy Information resource page.
The Toy Association’s legal counsel is in talks with Dovel & Luner, the firm representing the trust, about holding a web-based meeting for trade creditors to fully explain the action, their plan for the proceedings, and to provide additional information. Members will be notified as more details are made available.
Questions on this topic may be directed to Paul Vitale, The Toy Association’s executive vice president of finance & operations.