FAO Inc. (King of Prussia, Pa.) has asked the U.S. bankruptcy court for authority to auction 70 store leases.
The bankrupt toy retailer said an auction of the leases is “critical” if it wishes to bring more funds into its Chapter 11 estate, according to court documents, and maximize the value of the estate.
FAO wants to auction the leases on March 20, 2003, with a bid deadline of March 17 and a sale objection deadline of March 26. It has hired an asset management company to market the leases.
The toy retailing conglomerate runs about 285 Zany Brainy, Right Start and FAO Schwarz specialty retail stores.
Since filing for Chapter 11 bankruptcy protection on Jan. 13, FAO has tried to pare down its retail locations. A Jan. 24, 2003, court order authorized the retailer to conduct going-out-of-business sales and store closings at 81locations. It is now seeking similar relief at 14 additional locations. At the time of its bankruptcy filing, FAO listed assets of $257 million and liabilities of $238 million.