KB Toys Files “First Day” Motions and Applications

As reported earlier, KB Toys, Inc. filed bankruptcy earlier today for the second time in four years.  The company plans to close its remaining stores and liquidate its assets through the bankruptcy process.  Below is a list of the applications and motions that KB Toys filed today seeking authority to take certain actions (such as paying employees and obtaining financing) and to begin the going-out-of-business prcess.  Click on the title of any of the documents to view a copy of the actual document as filed with the court using netDockets (sign up now for a no-commitment free trial account).

• List of Creditors Filed by KB Toys, Inc.
• Motion for Joint Administration
• Motion for Continuation of Utility Service and Approval of Adequate Assurance of Payment to Utility Company
• Motion to Pay Sales and Use Taxes
• Motion to Continue Customer Programs
• Motion to Maintain Bank Accounts
• Motion to Pay Employee Wages
• Motion to Authorize the Debtors to Satisfy Prepetition Claims Relating to Common Carriers, Warehouse Providers and the Customers Broker
• Motion to Approve Use of Cash Collateral
• Exhibit A to the Proposed Interim Order Approving Use of Cash Collateral
• Declaration of Raymond I. Borst in Support of Chapter 11 Petitions and First Day Relief
• Application to Appoint Claims/Noticing Agent – Epiq Bankruptcy Solutions, LLC
• Emergency Motion Of The Debtors For An Order: (I) Authorizing And Approving The Conduct Of Going Out Of Business, Store Closing Or Similar Themed Sales, With Such Sales To Be Free And Clear Of All Liens, Claims And Encumbrances; (II) Authorizing The Debtors To Assume The Consulting Agreement; (III) Authorizing Customary Bonuses To Store-Level Employees Of Going Out Of Business Locations; And (IV) Granting Related Relief

A hearing for consideration of the company’s first day motions and applications is scheduled for Dec. 12 at 11:00 a.m.

KB Toys Files for Bankruptcy in Delaware

KB Toys, Inc. filed for bankruptcy today in the United States Bankruptcy Court for the District of Delaware.  The company, which is headquartered in Pittsfield, Mass., operates over 450 toy stores in 41 states, primarily located in malls and outlet malls.  The company generated approximately $480 million in revenues last year.

KB Toys previously filed for bankruptcy in 2004.  The plan of reorganization from the previous cases was confirmed and became effective in August 2005.  The reorganized companies were majority-owned by Prentice Capital Management, Inc. (100% of senior non-voting preferred stock and 90% of common stock). 

In an affidavit filed in support of the bankruptcy filing, the company reported that its same-store sales were down almost 20% year-over-year between October 5 and December 8, 2008.  As a result of the weakening financial position of the company, management evaluated options and ultimately determined that using a chapter 11 filing to facilitate orderly going-out-of-business sales at KB’s retail locations and the sale of the company’s wholesale distribution business was the alternative most likely to maximize the value of the company’s assets.

Download all of the documents filed in the KB Toys bankruptcy, including a list of the company’s largest creditors, using netDockets.  Sign up now for a free trial account.

NetVersant Solutions Creditors’ Committee Seeks Approval of Settlement Regarding Asset Sales

Yesterday, the Official Committee of Unsecured Creditors in the NetVersant Solutions bankruptcy cases filed a motion seeking approval of a settlement agreement with NetVersant Acquisition LLC and Patriarch Partners Agency Services, LLC.  The settlement agreement relates to NetVersant’s proposed sale of substantially all of its assets to NetVersant Acquisition LLC. 

In exchange for the Creditors’ Committee’s agreement not to object to the proposed asset sale, NetVersant Acquisition and Patriarch have agreed to fund a trust account for the exclusive benefit of NetVersant’s general unsecured creditors with $3 million and a note that may provide an additional $2 million (certain of the terms of the note are provided in the settlement agreement).  The motion provides that NetVersant’s general unsecured creditors hold at least $50 million in claims.

A copy of the motion, which attaches the settlement agreement, can be accessed here.

Eclipse Aviation Files First Financial and Operating Reports

Eclipse Aviation Corporation yesterday filed its initial financial and operating reports with the bankruptcy court.  These documents include the company’s debtor-in-possession budget, as well as information about the company’s insurance policies and bank accounts.  The report shows, among other things, that Eclipse projects to have to draw down the majority of its available cash collateral and financing in order to finance its operations between now and mid-January.  The company previously filed its list of creditors as well.  Both documents, as well as all other pleadings filed in Eclipse’s bankruptcy case, can be accessed here.

Integra Hospital Withdraws Asset Sale Motion

Integra Hospital Plano, L.L.C. and its affiliates (Integra Hospital Baton Rouge, L.L.C.; Integra Hospital Management, L.L.C.; and Integra Healthcare Holdings, L.L.C.) withdrew their motion for approval of a sale of substantially all of their assets yesterday.  The initial asset sale motion had been filed on December 1, 2008.  The companies did not provide any explanation for their withdrawal of the motion, but did request that the withdrawal be without prejudice to their right to bring another asset sale motion at a later date.

To view the asset sale motion or the notice of withdrawal, click here. 

Lehman Brothers Identifies Successful Bidder for Investment Management Assets

Yesterday, Lehman Brothers Holdings Inc. filed a notice identifying NBSH Acquisition, LLC as the successful bidder for the Investment Management division of Lehman Brothers, Inc.  The company also filed a copy of the Unit Purchase Agreement with the court.  The agreement identifies NBSH Acquisition, LLC as “a newly formed Delaware limited liability Company formed by certain senior managers (other than portfolio managers) of [Lehman's investment management business] for the purpose of consummating” the sale. 

The hearing to approve the sale is scheduled for December 22, 2008 at 10:00 a.m. 

A copy of the notice and the Unit Purchase Agreement can be viewed here.