The Wall Street Journal: Toys ‘R’ Us reaches deal to shield lender group from future litigation

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Toys “R” Us Inc. has reached a settlement with a group of lenders that will shield them from future litigation while boosting the recoveries of the retailer’s vendors and other creditors.

Under the deal, pending court approval, Toys’ vendors and other creditors will receive a cash payment and potential for higher recoveries. In return, unsecured creditors and vendors will forgo their right to sue the group of lenders who opted to pull the plug on the retailer’s bankruptcy case.

The retailer and a group of lenders known as B4 lenders took fire from creditors and vendors in March after the company abruptly announced it would be winding down its operations, due to disappointing holiday sales.

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