Toys ‘R’ Us Directors Face New Fraud Claims Over Bankruptcy (1)

Toys “R” Us board members and owners face new allegations of fraud and breach of duty over the company’s 2017 bankruptcy.

Creditors claim in ongoing litigation that seven company directors have now said they knew they shouldn’t have approved executive bonuses and onerous bankruptcy loans at the outset of the case that put the retailer on the fast track to a sudden liquidation six months later.

The additional debt served to keep Toys “R” Us in business during its restructuring, but cost it more than $500 million in fees and interest and came with strict terms, or covenants, court documents ...