Toys "R" Us has hired law firm Kirkland & Ellis to work through debt restructuring options that could possibly include a bankruptcy filing, according to multiple media reports. This comes just a couple of months after the specialty retailer disclosed that it had retained Lazard to work on its balance sheet, which includes around $5.05 billion of long-term debt ($400m of which comes due next year). Toys "R" Us is owned by private equity firms Bain Capital and KKR, which took the company private in 2005 for around $6.6 billion (not including debt assumption).
Why it matters: An under-reported story from the financial crisis was the relative paucity of large leveraged buyouts that went bust, despite the glut of overpriced take-privates that occurred between 2005 and 2008. But Toys "R" Us might serve as a contradictory coda.