KB Toys gets court approval to hold going-out-of-business sales

By Caroline Salls

Pittsburgh, Dec. 19 - KB Toys, Inc. received court approval to conduct going-out-of-business or store-closing sales at all of its retail locations, according to a Thursday filing with the U.S. Bankruptcy Court for the District of Delaware.

As previously reported, the sales will be conducted by a joint venture comprised of Gordon Brothers Retail Partners, LLC and Great American Group, LLC.

KB Toys said it expects the sales to be completed by Feb. 9, but they can be extended to no later than Feb. 28.

The company will reimburse the liquidation agent for up to $200,000 of its start-up supervisor costs, $240,000 of its advertising expenses, and it will pay third-party signage providers up to $700,000.

In addition, KB will pay a consultant's fee of up to 2.25% of gross proceeds, with the total fee to be based on gross recovery.

The company will also pay store-closing bonuses, not to exceed 10% of store-level employee payroll, to employees who agree to continue to work for KB until the sales are completed.

KB Toys, a Pittsfield, Mass., mall-based toy retailer, filed for bankruptcy on Dec. 11. Its Chapter 11 case number is 08-13269.

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