KB Files Plan of Reorganization
Pittsfield, Mass., KB Toys, Inc. and a committee of its creditors have filed a joint reorganization plan that would transfer ownership of the company to a New York City investment firm, unless a better offer is received. Under the plan, an affiliate of Prentice Capital Management, LP will invest $20 million in cash and in a $25 million credit facility. The company is seeking in the U.S. Bankruptcy court of Delaware to hold an auction to solicit other offers. If the Prentice offer goes through, it would add to a $150 million credit line already secured from a syndicate led by Bank of America.
The toy retailer filed for bankruptcy in January 2004, blaming price-cutting by major discount retailers during the 2003 holiday season. KB currently is owned by Bain Capital of Boston and a group of KB executives, including CEO Michael L. Glazer.