XRoads CMS Nets More for Web-based Toy Retailer

Background

• e-Toys, Inc.,  the internet’s biggest toy store, is a leading Web-based retailer focused exclusively on children's products, including toys, video games, software, videos, books and music, peaking at over 1,200 employees, $270 million in annual sales and had a $8 billion market cap.

Challenge

• Falling revenues, rising costs and escalating competition forced e-Toys to file for bankruptcy. XRoads was selected as financial advisor and provided bankruptcy administration and support services.

Solution

• XRoads assisted in the wind-down of domestic and international operations; analysis and implementation of strategic leasing arrangements; and the sale of intellectual property, inventory, computer equipment and other assets.  
• We also negotiated the rejection of the leases on the company’s two distribution centers (each over 1 million square feet), co-location facilities and corporate offices mitigating rejection damages by identifying new tenants removing all warehouse equipment and conveyor systems.  
• XRoads provided claims reconciliation, and negotiation, cash management, distribution analysis, records inventory and retention.  
• We oversaw the wind down of the 401K plan and managed and settled four key pieces of litigation, generating additional recoveries to the estate.

Value Delivered

• XRoads managed the sale of approximately $40 million in assets (including the wind-down of several foreign subsidiaries).
• XRoads efficiently dealt with residual employee and claim issues as expeditiously as possible post-confirmation.