U.S. Trustee objects to Toys ‘R’ Us debtor’s Chapter 11 plan release

By Sarah Lizee

Olympia, Wash., Jan. 15 – The U.S. Trustee overseeing Toys “R” Us, Inc.’s Chapter 11 case objected to confirmation of the first amended Chapter 11 plan filed by debtor Wayne Real Estate Parent Co., LLC, according to a Tuesday filing with the U.S. Bankruptcy Court for the Eastern District of Virginia.

Acting Region 4 U.S. trustee John P. Fitzgerald III said he objects to the “adequacy and legality of the proposed third-party releases and exculpation clause” included in the plan.

Fitzgerald said he is renewing his objections to third-party releases and exculpation provisions proposed in previously confirmed plans related to other debtors in the joint cases and believes that “releases and exculpations require a factual analysis on a case-by-case basis.”

Fitzgerald said the provisions are “overly broad and inconsistent with Fourth Circuit Law.”

Toys “R” Us is a Wayne, N.J., toy retailer. The company filed for bankruptcy on Sept. 19, 2017 under Chapter 11 case number 17-34665.

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