Basic Fun has announced that, together with certain affiliated entities, it has commenced Chapter 11 bankruptcy proceedings in the US District of Delaware. Such proceedings permit reorganisation and are available to all businesses, whether set up as a corporation, partnership or sole proprietorship,
As part of the first day filings, which began on 28 June, Basic Fun sought approval of $50 million in DIP (debtor in possession) financing from affiliates of Great Rock Capital, as well as a $15 million subordinate facility to be provided by its founders, Jay Foreman and John MacDonald, and Royal Bank of Canada.
“As a result of the restructuring process, our partners will be even more secure and confident in their relationship with the company moving forward as a well-balanced capital structure will ensure the health of our company for the long-term”
Basic Fun president, Craig Leaf
The financing, once approved, will provide ample liquidity for the ongoing operation of the business through the course of the restructuring proceedings, including continued ability to purchase and sell inventory, as well as supporting its key licensing, retail and vendor partners. Basic Fun intends to put forward a comprehensive restructuring plan which will allow it to emerge from the court-supervised process quickly and effectively.
Basic Fun president, Craig Leaf said: “As a result of the restructuring process, our partners will be even more secure and confident in their relationship with the company moving forward as a well-balanced capital structure will ensure the health of our company for the long-term.”
Chief financial officer, Frank McMahon, said: “Basic Fun will move forward with a strengthened financial foundation, allowing us to invest in an even greater product and promotional experience for our best-in-class merchandise assortments globally.”
CEO and majority shareholder Jay Foreman, added, “Since the demise of our industry’s largest toy retailer Toys R Us in 2018 through the tumult of the trade wars with China in 2019, Covid in 2020 through 2021, the travails of the supply chain crisis in 2022, inventory overstocks in 2023 and consumer slowdown in the early part of 2024 our industry and Basic Fun have been through a gauntlet of challenges. We intend to use the restructuring process to put those challenges in the rear-view mirror, enabling us to secure a successful future and position us for growth and value creation.”
Source – Basic Fun website news page.
www.basicfun.com
