KB Toys Has Chap. 11 Plan

PITTSFIELD, MA-KB Toys has filed a plan or reorganization to emerge from bankruptcy. The toy chain, which operates about 600 stores, filed for Chapter 11 in January last year.

Prentice Capital Management will invest $20 million on the reorganized KB Toys and provide a credit facility of up to $25 million in exchange for 90% of the retailer’s stock. However, KB Toys executives are asking the bankruptcy court to allow it to conduct an auction where it would sell off its assets and leases.

KB Toys is left with about half of the stores it once operated. It started the mass closures last year after its Chapter 11 filing, and the company’s last closure announcement, of up to 238 units, was in October.