Toys ‘R’ Us Creditors Sue Directors and Private-Equity Owners

Toys “R” Us Inc. creditors filed a lawsuit accusing the defunct retailer’s executives and private-equity owners of fraud and breach of fiduciary trust.

Former Chief Executive Officer David Brandon and other directors misrepresented the toyseller’s ability to repay creditors after it filed for bankruptcy in 2017 while collecting millions in bonuses and advising fees, according to the complaint filed in New York Supreme Court. The case is being brought by a trust created for creditors, including toymakers.

Toys “R” Us liquidated in 2018, leaving those vendors and workers scrambling for funds too limited to meet all claims. That’s prompted years ...