It’s lawyers before landlords in the Toys “R” Us bankruptcy case

Courts give priority to bankruptcy professionals when it comes to getting paid

May.May 13, 2018 01:00 PM

(Credit: Wikipedia, Max Pixel, Pixabay)

Landlords looking to get compensated in Toys “R” Us’s bankruptcy case, get in line.

The toy retailer is expected to pay $348 million to dozens of bankers, lawyers and consultants who tried to fix the company’s problems. And those bankruptcy professionals get priority and are largely assured of getting paid as other creditors fight to get their share, the New York Times reported.

This is nothing particular to Toys “R” Us, as bankruptcy fees have been an issue for years.

“The fees have been increasing, and there is no effective means to control them,” Lynn LoPucki, a bankruptcy professor at the University of California, Los Angeles, told the Times.

Companies can make the decision as to where they want to file for bankruptcy, and judges are hesitant to push back on fees because lawyers could bring the cases elsewhere. Toys “R” Us is based in Wayne, N.J., but filed its Chapter 11 case in Richmond, Va.

The retailer earlier this year announced it planned to close all of its 735 stores, including ones in College Point, Queens. [NYT]Rich Bockmann

Related Articles

An example of roll-off waste management (Credit: YouTube, iStock)

Big building owners prevent city from dumping container-pickup in trash-collection reform

“I can talk about erections all day”: NAR tech consultant’s bizarre fireside chat

Retail ruh-roh: Mall REITs take hit following Forever 21 bankruptcy

For mall owners like Simon, Brookfield and Vornado, Forever 21 bankruptcy signals more trouble ahead

Council member Vanessa Gibson (Credit: New York City Council)

Commercial landlords face new fines as City Council passes anti-harassment bill

As House begins impeachment inquiry, here’s what we know about Trump’s Ukraine-real estate ties

Embattled Prodigy Network CEO Rodrigo Niño to step down

Clockwise from top left: 35-00 48th Street in Astoria, 558 Broadway, 63 Madison Avenue, and 85 Jay Street in Brooklyn (Credit: Google Maps, Wikipedia, LoopNet, and Williams New York)

These were the top 10 NYC retail leases in August