Toys “R” Us (Canada) commenced proceedings under Canada’s Companies’ Creditors Arrangement Act on Tuesday following an initial order granted by the Ontario Superior Court of Justice.
The initial order includes a stay of proceedings in favor of TRU Canada for an initial period of 10 days, with any extension to be determined by the Court.
TRU Canada stated the restructuring initiatives will include reducing its retail footprint. Operationally, TRU Canada said all currently active stores will remain open during the CCAA process.
As part of the restructuring process, TRU Canada appointed Neil Taylor as Chief Restructuring Officer. For court-appointed oversight, Alvarez & Marsal Canada was named as the CCAA Monitor. TRU Canada indicated that additional information related to the CCAA proceedings will be made available on the Alvarez & Marsal Canada’s website.
Beyond the court-supervised mechanics, the filing reflects a liquidity squeeze driven by operating and balance-sheet pressure. Court documents say Toys “R” Us Canada had at least $160 million owed to unsecured creditors, including about $120.9 million owed to vendors, alongside “substantial” amounts outstanding to landlords.
Landlord actions have also escalated, with reporting showing at least seven lawsuits from landlords alleging roughly $31.3 million in unpaid rent and other damages, and a separate claim by RioCan seeking about $4.0 million tied to a terminated lease after a missed January rent payment of roughly $43,000.
In parallel, the company has been shrinking its network, with the filing necessary after struggling with inflation and rising labour costs, despite efforts such as layoffs, closing unprofitable stores, and supplier negotiations that were not enough to stabilize the business.
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