In Mississippi and throughout the country, many shoppers were saddened to hear that Toys ‘R’ Us was experiencing serious financial problems. Before long, news headlines on various platforms began announcing the company’s intentions to seek debt relief. Ultimately, the company filed for bankruptcy after claiming insolvency.
The move had spurred legal problems with the company’s creditors. They claim that Toys ‘R’ Us executives were not honest when they filed for bankruptcy. The creditors have alleged that the company deliberately misled their suppliers about its financial status. They claim that filing for bankruptcy was a scheme the company was using to stay in business while not paying back more than $600 million in debt.
Creditors want to know why former CEO received a bonus worth millions
One of the issues being brough to trial regarding Toys ‘R’ Us is why millions of dollars’ worth of pay raises and bonuses were dispersed to various employees, including the former CEO, just before filing for bankruptcy. Creditors say the former CEO’s bonus was $2.8 million, which, they claim, is a clear breach of fiduciary duty. Toys ‘R’ US asked the court to dismiss the creditors’ case; however, the judge overseeing the case has ruled that it may continue to trial.
Resolving legal issues regarding bankruptcy
For many Mississippi residents and business owners, bankruptcy is a valuable financial tool that can help provide debt relief and restore financial stability. Misuse of the system, however, is punishable by law. Any person age 18 or older who has questions or concerns about a particular bankruptcy program may request a meeting with an attorney who has experience in the area of law.