Toys R Us Canada has filed for creditor protection under the Companies’ Creditors Arrangement Act after obtaining an initial order from the Ontario Superior Court of Justice.

“After careful consideration of all reasonably available alternatives, TRU Canada has sought creditor protection under the CCAA to obtain a stay of proceedings as it evaluates its strategic alternatives and implements certain restructuring initiatives,” said the company in a news release.

“These initiatives will include reducing its retail footprint to better position the company in today’s retail environment.”

All of the chain’s currently active stores will remain open during the creditor-protection process.

The move is not a surprise. Toys R Us has closed 53 stores and laid off numerous employees during the past two years. As Connect previously reported, the closures include all of the retailers B.C. locations.

Insolvency specialist Alvarez & Marsal Canada has been appointed as the CCAA monitor. According to an Alvarez & Marsal court filing, the company now has 22 stores in operation and nine shuttered locations with leases still in effect. Approximately 654 full-time and part-time employees remain on the job.

According to a court filing, the retailer’sdebts include about $120 million to its vendors, $26 million to service providers and $8.4 million to 262 and related entities in unpaid management fees, with “significant amounts” owed to landlords.

The initial court order provides a stay of proceedings for 10 days, subject to extension, as the company evaluates its options and advances its restructuring plan.

As part of the process, Toys R Us Canada has appointed Neil Taylor as chief restructuring officer to assist with navigating the CCAA proceedings while maintaining operations and continuing to serve customers, partners and employees.

Toys R Us Canada is a national specialty retailer of toys and baby products, operating stores and e-commerce platforms across the country. The company has been serving Canadian families since 1984 and is now a subsidiary of Putman Investments.

Court documents and updates on the CCAA proceedings can be accessed on Alvarez & Marsal’s website.

Photo: CNW Group/Toys R Us Canada