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Operator of several SA senior-care centers files for bankruptcy

Senior Care Centers LLC, a skilled nursing and senior living provider with more than 100 facilities in Texas and Louisiana — including 10 in San Antonio — has filed for Chapter 11 bankruptcy protection. Company officials have attributed the financial challenges to “burdensome debt levels” and “expensive leases.”

For now, that decision is not expected to affect the operation of the Dallas-based company’s facilities. However, the ownership of roughly half of those centers is in flux. Senior Care Centers operates 10 facilities in San Antonio. It also operates centers in New Braunfels, Bandera and Fredericksburg, as well as other Texas cities.

Irvine, California-based Sabra Health Care REIT (Nasdaq: SBRA) owns 38 facilities operated by Senior Care Centers. On Dec. 6 Sabra issued Senior Care Centers notices of default and lease termination for not paying rent. Sabra also announced that it entered into an agreement with an undisclosed buyer to sell its 36 skilled nursing facilities and two senior housing communities operated by Senior Care Centers for $385 million. It was not immediately clear how many, if any, of those facilities are in San Antonio. Sabra indicated that it expects the deal to close by early 2019.

“We are pleased with the progress we have made on our planned disposition of the Senior Care Centers Facilities,” Sabra CEO Rick Matros said in a statement. “We do not expect Senior Care Centers’ bankruptcy filing to have a substantive impact on our disposition of the Senior Care Centers facilities.”

Meanwhile, Westlake Village, California-based LTC Properties, Inc. (NYSE: LTC), which leases 11 skilled nursing centers in Texas to Senior Care Centers, said on Dec. 5 it too had not yet received rent for the month. LTC has requested a consensual termination of the lease agreement with Senior Care Centers and is in discussion with another Texas operator to potentially take over the facilities under similar lease terms.

The Business Journal confirmed with LTC that those facilities are not in San Antonio.

Michael Beal, chief operating officer for Senior Care Centers, said the bankruptcy filing “allows us to address certain financial issues while continuing to provide the critical care and support on which our residents rely while we work to transition certain communities to new operators.”



Your Bankruptcy Discharge Doesn’t End Your Case

Isn’t my case over?

I got my discharge.  Why’s the bankruptcy trustee still  hounding me?, my client asks.

People who’ve filed bankruptcy are focused on the discharge as their goal.

With their discharge in hand, they think it’s all over.

They lose sight of the fact that the administration of a bankruptcy estate by the trustee runs on a parallel track to the one that leads the debtor to a discharge.

Different tracks.  Different timelines.

Trustee’s job

The Chapter 7 trustee’s job doesn’t necessarily end at the 341 meeting, or meeting of creditors in each case, usually about 30 days after the filing, where the debtor appears and answers questions.

Most Chapter 7 cases end for the trustee with the first meeting of creditors.  There are no assets for the trustee to administer and no unanswered questions.

But the trustee may have responsibilities that remain after the meeting.

The trustee is charged with investigating the debtor’s right to a discharge and with turning any nonexempt assets of the debtor  into cash for benefit of creditors.

How exemptions work

The trustee may need to know about bank balances on the date of filing or transfers that he may be able to recover.

If he has assets to distribute, he needs to review the claims filed by creditors.  If the bankruptcy estate has income, he may need to file a tax return.

There can be lots of work for the trustee in an asset bankruptcy case.

Road to discharge

For the debtor, the track is usually far shorter.

The Bankruptcy Code was structured to let the debtor know very quickly after the filing of the case whether he will get a discharge.

Or rather, it’s set up to let the debtor know whether there’s a dispute about getting a bankruptcy discharge or about the dischargeability of a particular debt.

The notice that goes out to creditors right after a bankruptcy case is filed sets out the deadline for creditors to challenge the discharge or the dischargeability of a particular debt.  That date is usually 60 days after the date of the first meeting of creditors.

Anyone challenging the discharge must file an adversary proceeding with the bankruptcy court in that time.

Absent the filing of an adversary, the court issues the discharge.  The debtor heaves a sigh of relief and thinks it’s all over.

Trustee work continues

The trustee’s work is not ended by the debtor’s discharge.

If there are assets, he’s still got work to do.  He may need information or other forms of cooperation from the debtor to do his job as trustee.

The debtor’s failure to provide that cooperation can lead to an action to revoke the discharge.  So the debtor still has some skin in that game.

The administration of some bankruptcy estates goes on for years.  It all depends on the nature of the assets the trustee is administering.

No asset cases

The vast majority of bankruptcy cases are no-asset cases.

That’s a shorthand way to say that there are no assets for the trustee to administer and there will be no distribution to creditors.  Even though  Chapter 7 is termed a liquidation proceeding, there may be nothing of value worth liquidating.

In those cases, the trustee may file his no-asset report and close his file long before the debtor gets the discharge.

So the trustee and the debtor proceed down the tracks of a bankruptcy case, in parallel, but not intersecting.

Creditor Governance

Creditor Governance

By William R. McCumber (College of Business, Louisiana Tech University) and Tomas Jandik (Sam M. Walton College of Business, University of Arkansas)

A traditional view of creditors is that they are largely passive investors unless a borrower violates the terms of a loan agreement or misses a payment. However, like institutional shareholders, creditors hold concentrated positions in firm securities (loan shares), are sophisticated investors, and have access to senior management and non-public information. Since debt financing is much more common than equity financing, and because the great majority of credit agreements are honored, it is important to better understand how creditors advise and monitor portfolio (borrower) firms. We find that creditors play a significant role in corporate governance under normal circumstances, i.e. when firms are not in technical violation or default. Borrower firms are less likely than non-borrowers firms to file for bankruptcy in the intermediate future, and borrowers shift financial and investment decisions away from value-reducing policies and toward value-creating investments. Importantly, these changes are profitable for borrower firms since both cash flows and returns on assets improve at least three years after loan origination, which in turn decreases creditor portfolio risk. We also find that when creditors retain a larger proportion of the loan on their books, changes in borrower firm financials are more pronounced, providing evidence that creditors exert a greater governing force when more exposed to borrower risk.



National Consumer Bankruptcy Law Firm Sanctioned for Harming Financially Distressed Consumers and Auto Lenders

After a four-day trial, a national consumer bankruptcy law firm and its local partner attorneys were sanctioned and enjoined by the U.S. Bankruptcy Court for the Western District of Virginia for causing “unconscionable” harm to their clients. The court found that the law firm and its attorneys, among other things, systematically engaged in the unauthorized practice of law, provided inadequate representation to consumer debtor clients, and promoted and participated in a scheme to convert auto lenders’ collateral and then misrepresented the nature of that scheme, Director Cliff White of the Executive Office for U.S. Trustees announced today.

On Feb. 12, the U.S. Bankruptcy Court for the Western District of Virginia entered orders in two actions brought by the U.S. Trustee. The court sanctioned Law Solutions Chicago, doing business as “UpRight Law” (UpRight), and its principals $250,000; imposed additional sanctions of $50,000 against UpRight’s managing partner Kevin Chern, and $5,000 each against UpRight’s affiliated partner attorneys Darren Delafield and John C. Morgan Jr.; and ordered UpRight to disgorge all fees collected from the consumer debtors in both bankruptcy cases. The court also revoked UpRight’s bankruptcy filing privileges in the Western District of Virginia for not less than five years, and those of its local partners for 12 and 18 months, respectively. The bankruptcy court also sanctioned Sperro LLC (Sperro), an Indiana towing company that did not respond to the U.S. Trustee Program’s complaints, and ordered the turnover of all funds it received in connection with bankruptcy cases in the district.

“Lawyers who inadequately represent consumer debtors harm not only their clients, but also creditors and the integrity of the bankruptcy system,” said Director White. “The damage caused increases exponentially when they operate nationally, like UpRight. This case is demonstrative of the vigorous enforcement actions that the U.S. Trustee Program can and will take to protect all stakeholders in the bankruptcy process.”

According to trial testimony and evidence presented in court, UpRight operates a website offering legal services to consumers in financial distress. Prospective clients contact UpRight via the Internet and are routed to UpRight’s sales agents. These non-attorney “client consultants” were trained to “close” prospective clients by using high-pressure sales tactics and improperly provided legal advice to encourage them to file for bankruptcy relief. In many instances, UpRight arranged payment plans for its prospective clients to pay bankruptcy-related attorney’s fees and costs over time, and refused to refund fees it collected from its clients for whom UpRight did not file a bankruptcy case. The bankruptcy court found that UpRight had “serious oversight issues” in failing to adequately supervise its salespeople to prevent their unauthorized practice of law, and that UpRight demonstrated a “focus on cash flow over professional responsibility.”

Additionally, UpRight worked in concert with Sperro to implement a program through which UpRight’s clients could have their bankruptcy legal fees paid through a “New Car Custody Program.” The bankruptcy court described the New Car Custody Program as “a scam from the start.” UpRight’s salespeople and attorneys counseled bankruptcy clients to “surrender” vehicles fully encumbered by auto lenders’ liens to Sperro without the lienholders’ consent, and enter into an agreement obligating the clients to pay Sperro the costs of towing the vehicle, transporting it across state lines – often over a long distance – and storing it. UpRight assured its debtor clients that they would not have to pay any fees to Sperro, and in some instances advised its clients to hide their vehicles from lenders looking to repossess them until Sperro could pick up the vehicles.

After Sperro took a vehicle, it asserted a statutory “warehouseman’s lien,” claiming the right to keep the vehicle until the sham towing, transportation, and storage fees were paid. Then it offered the vehicle for sale at auction, despite the auto lender’s continuing security interest. Out of the sale proceeds, Sperro paid the debtor client’s bankruptcy fees directly to UpRight. Sperro kept the rest of the sale proceeds. In some cases, UpRight prepared bankruptcy court filings omitting the debtor clients’ transactions with Sperro.

The “New Car Custody Program” harmed auto lenders by converting collateral in which they had valid security interests. And the bankruptcy court found that UpRight “preyed upon some of the most vulnerable in our society” – its debtor clients – “while they were under great stress” by providing “unconscionable” advice to participate in the Sperro scheme, exposing them to undue risk by causing them to possibly violate the terms of their contracts with their auto lenders as well as state laws.

The cases discussed above are captioned Robbins v. Delafield et al., Adv. No. 16-07024 (Bankr. W.D. Va. Feb. 12, 2018), and Robbins v. Morgan et al., Adv. No. 16-05014 (Bankr. W.D. Va. Feb. 12, 2018).

Director White commended the trial team of Assistant U.S. Trustee Margaret Garber and Trial Attorneys Joel Charboneau, Nick Foster and Joan Swyers for their handling of these matters.

The U.S. Trustee Program is the component of the Justice Department that protects the integrity of the bankruptcy system by overseeing case administration and litigating to enforce the bankruptcy laws. The Program has 21 regions and 92 field office locations. Learn more information on the Program at:



Bankruptcy Filings Continue to Decline


Bankruptcy filings fell by 1.8 percent for the 12-month period ending March 31, 2018, compared with the year ending March 31, 2017. The data continues a national trend of declining bankruptcy filings since 2011.

The March 2018 annual bankruptcy filings totaled 779,828, compared with 794,492 cases in the previous year, according to statistics released by the Administrative Office of the U.S. Courts.

A national wave of bankruptcies that began in 2008 reached a peak in the year ending September 2010, when nearly 1.6 million bankruptcies were filed.

Additional statistics released today include:

  • Business and non-business bankruptcy filings for the 12-month period ending March 31, 2018 (Table F-2, 12-month);
  • A comparison of 12-month data from March 2017 and March 2018 (Table F);
  • First quarter filings, (Table F-2, 3-month); and filings by month (Table F-2, January, February, March)
  • Bankruptcy filings by county (Report F-5A).
Business and Non-Business Filings,
Years Ending
March 31, 2014-2018
Year Business Non-Business Total
2018 23,106 756,722 779,828
2017 23,591 770,901 794,492
2016 24,797 808,718 833,515
2015 26,130 884,956 911,086
2014 31,671 1,006,609 1,038,280
MARCH 31, 2014-2018
Year Chapter
7 11 12 13
2018 480,933 7,735 499 290,566
2017 488,417 7,105 457 298,348
2016 523,394 7,380 440 302,193
2015 596,867 7,053 354 306,729
2014 699,982 8,564 388 329,256

For more on bankruptcy and bankruptcy court rules, or search historical data on bankruptcy filings.

Related Topics: Bankruptcy Filings



Just the Facts: Consumer Bankruptcy Filings, 2006-2017

Just the Facts is a feature that highlights issues and trends in the Judiciary based on data collected by the Judiciary Data and Analysis Office (JDAO) of the Administrative Office of the U.S. Courts.

Bankruptcy can provide a fresh financial start for consumers who cannot pay their debts, either because of insolvency or insufficient income to meet creditor demands. Bankruptcy generally works in one of two ways: liquidating assets to pay one’s debts under Chapter 7 of the U.S. Bankruptcy Code, or establishing a repayment plan under Chapter 13 of the code.

Under a Chapter 7 liquidation, a debtor generally can achieve a fresh financial start more quickly than under a Chapter 13 repayment plan, which can last up to five years. However, under Chapter 13, a debtor may be able to save a home from foreclosure, reschedule secured debts and extend them over the life of a Chapter 13 plan (possibly lowering the payments), or consolidate debt payments to a trustee who then handles distribution to creditors.

  • In the 12-year span from October 1, 2005 to September 30, 2017, about 12.8 million consumer bankruptcy petitions were filed in the federal courts. Of those, 8.7 million–68 percent–were filed under Chapter 7, and 4.1 million– 32 percent–were filed under Chapter 13 (see Table 1). Nonbusiness filings (i.e., filings involving mainly consumer debt) constituted 97 percent of all Chapter 7 bankruptcies and 99 percent of all Chapter 13 bankruptcies.
  • In 2005, Congress enacted the Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA), which among other things, instituted a means test for filers to move some away from filing for bankruptcy under Chapter 7 and towards filing under Chapter 13. The goal of the BAPCPA is to have petitioners in Chapter 13 devote disposable income over three to five years to pay unsecured creditors. A person may file for bankruptcy under Chapter 7 only if her or his monthly income over six months prior to filing for bankruptcy is below the state median for a similar household, or if the debtor’s monthly disposable income falls below a threshold established by a statutory means test.
  • Following the last recession (December 2007 to June 2009), overall bankruptcy filings peaked in 2010. Chapter 7 consumer bankruptcy filings have declined since 2010, (see Chart 1) and Chapter 13 filings have leveled off in the last few years (see Chart 2).
  • The percentage of total filings that Chapter 7 filings accounted for has declined since 2010, whereas the percentage of total filings under Chapter 13 filings has increased (see Chart 3). We cannot say with certainty, however, that BAPCPA caused this phenomenon.
  • Table 2 shows the 25 federal judicial districts in which Chapter 13 consumer bankruptcy filings constituted the highest percentage of total consumer bankruptcy filings from 2006 to 2017. Of these districts, 23 (92%) are in southern states. Map 1 also shows that the districts with the highest numbers of Chapter 13 consumer bankruptcies per 1,000 inhabitants were concentrated in the South.
  • In 2016, the five states with the highest rates of Chapter 13 bankruptcy were Alabama (1 in 112 households), Tennessee (1 in 119), Georgia (1 in 135), Louisiana (1 in 179), and Mississippi (1 in 190). The state with the lowest rate was Alaska (1 in 4,359 households). Nationally, there was one Chapter 13 filing for every 405 households in 2016.  (see Table 3).
Table 1
Nonbusiness Bankruptcy Filings by Year
Fiscal Year Total  Nonbusiness Bankruptcies Chapter 7 Nonbusiness Bankruptcies Nonbusiness Chapter 7 Filings as a Percentage of Total Nonbusiness Filings Chapter 13 Nonbusiness Bankruptcies Chapter 13 Nonbusiness Filings as a Percentage of Total Nonbusiness Filings
2006 1,085,209 814,850 75.09% 269,699 24.85%
2007 775,344 467,248 60.26% 307,521 39.66%
2008 1,004,171 653,319 65.06% 350,015 34.86%
2009 1,344,095 949,002 70.61% 393,786 29.30%
2010 1,538,033 1,105,534 71.88% 430,583 28.00%
2011 1,417,326 1,001,813 70.68% 413,699 29.19%
2012 1,219,132 845,470 69.35% 372,132 30.52%
2013 1,072,807 730,592 68.10% 340,807 31.77%
2014 935,420 623,349 66.64% 310,914 33.24%
2015 835,197 533,572 63.89% 300,528 35.98%
2016 781,123 483,176 61.86% 296,824 38.00%
2017 767,721 472,135 61.50% 294,500 38.36%
TOTAL 12,775,578 8,680,060 67.94% 4,081,008 31.94%
Source: Table F-2 for the 12-month periods ending September 30, 2006 Through 2017.
Table 2. Nonbusiness Bankruptcy  Filings in 25 Federal Judicial Districts Where Chapter 13 Filings Constituted the Highest Percentage of Total Nonbusiness Filings, FY 2006-2017
District Total Nonbusiness
Total Nonbusiness Chapter 13 Filings Percentage
1 Georgia, Southern 104,160 81,285 78.0%
2 Alabama, Middle 88,951 66,417 74.7%
3 Louisiana, Western 121,720 89,541 73.6%
4 Tennessee, Western 207,042 151,992 73.4%
5 Alabama, Southern 57,701 39,659 68.7%
6 Puerto Rico 117,500 76,763 65.3%
7 Georgia, Middle 120,307 77,022 64.0%
8 North Carolina, Eastern 101,163 64,543 63.8%
9 South Carolina 91,931 53,863 58.6%
10 Texas, Southern 142,263 81,862 57.5%
11 Texas, Northern 182,979 101,877 55.7%
12 North Carolina, Middle 65,532 34,846 53.2%
13 Mississippi, Northern 64,654 34,052 52.7%
14 Alabama, Northern 187,511 98,408 52.5%
15 Arkansas, Eastern 95,974 50,163 52.3%
16 Texas, Eastern 69,983 34,389 49.1%
17 Texas, Western 119,132 57,107 47.9%
18 Louisiana, Eastern 43,624 20,161 46.2%
19 Mississippi, Southern 81,680 37,550 46.0%
20 Tennessee, Middle 132,518 59,440 44.9%
21 Georgia, Northern 467,406 208,131 44.5%
22 Louisiana, Middle 21,701 9,633 44.4%
23 Tennessee, Eastern 164,994 69,596 42.2%
24 Arkansas, Western 56,817 23,378 41.1%
25 Illinois, Southern 60,165 23,404 38.9%
Source: Table F-2 for the 12-month periods ending September 30, 2006 Through 2017.



Here are the bankruptcy sale details on Schlitterbahn Corpus Christi

You want to buy a water park? An NYC law firm has put Schlitterbahn Corpus Christi on the market after Upper Padre Partners, LP, filed for bankruptcy with bankruptcy lawyers last May.

Water park, hotel, 9-hole golf course and 109 more acres of developed land on Padre Island.

How much would you pay?

Keen-Summit Capital Partners, a broker designated by a San Antonio bankruptcy court to handle the sale of Schlitterbahn Corpus Christi, has set the details for the bankruptcy sale.

The resort area is described as a four-story, 92-room hotel with a restaurant and multiple bars. There is space for 705 vehicles in the parking lot.

It can be sold as a whole or in parts. No asking price is listed.

The park itself comes with six tube rides, two kids areas, two river rides, a surfing ride, a water coaster, a heated pool, a tube slide and a raft ride.

The water park, hotel and golf course will open for the spring and summer seasons, according to Harold Bordwin, principal and managing director for Keen-Summit.

Stalking horse offers, which are first bids chosen by the bankrupt company to avoid low bids on its assets, are being considered. All sales are subject to the approval of the San Antonio bankruptcy court.

“This opportunity arises from the May 1, 2017, Chapter 11 filing of Upper Padre Partners, L.P., which was precipitated by inter-partner disputes, the doubling of the business’ construction budget, and the delayed opening of the project,” a separate advertisement for the sale reads.

The winning purchaser will take the title of the property with no “liens, claims, encumbrances” consistent with Section 363 of the bankruptcy lawyer code.

Julie Garcia/Caller-Times


U.S. gunmaker Remington seeks financing to file for bankruptcy

Remington Outdoor Company Inc, one of the largest U.S. makers of firearms, has reached out to banks and credit investment funds in search of financing that will allow it to file for bankruptcy, people familiar with the matter said on Thursday.

The move comes as Remington reached a forbearance agreement with its creditors this week following a missed coupon payment on its debt, the sources said. The company has been working with investment bank Lazard Ltd (LAZ.N) on options to restructure its $950 million debt pile, Reuters reported last month.

Remington is seeking debtor-in-possession financing that will allow it to fund is operations once it files for bankruptcy, the sources said. The size of the financing and timing of Remington’s bankruptcy plans could not be learned.

Some potential financing sources, including credit funds and banks, have balked at coming to Remington’s aid because of the reputation risk associated with such a move, according to the sources.

Remington, which is controlled by buyout firm Cerberus Capital Management LP, was abandoned by some of Cerberus’ private equity fund investors after one of its Bushmaster rifles was used in the Sandy Hook elementary school shooting in Connecticut in 2012 that killed 20 children and six adults.

The sources asked not to be identified because the deliberations are confidential. Remington did not respond to several requests for comment. Cerberus declined to comment.

Credit rating agencies have warned that Remington’s capital structure is unsustainable given its weak operating performance and significant volatility in the demand for firearms and ammunition.

Remington’s sales have declined in part because of receding fears that guns will become more heavily regulated by the U.S. government, according to credit ratings agencies. President Donald Trump has said he will “never, ever infringe on the right of the people to keep and bear arms.”

The Madison, North Carolina-based gun manufacturer faces a maturity of an approximately $550 million term loan in 2019. Remington also has $250 million of bonds that come due in 2020 and are trading at a significant discount to their face value at around 16 cents on the dollar, according to Thomson Reuters data, indicating investor concerns about repayment.

The term loan maturing next year is also trading at a significant discount to full value, at around 50 cents on the dollar, the sources said.

Remington’s sales plunged 27 percent in the first nine months of 2017, resulting in a $28 million operating loss.

Reporting by Andrew Berlin in New York and Jessica DiNapoli in Las Vegas; Editing by Cynthia Osterman [SOURCE]

Toys ‘R’ Us Files For Bankruptcy, But Will Keep Stores Open

Suffering from slumping sales and mountains of debt, Toys ‘R’ Us has filed for bankruptcy.

The 69-year old Toys ‘R’ Us was once the mecca of kids’ gifts. But it was eventually overtaken by Walmart and ultimately Amazon.

In its fight to stay relevant, Toys ‘R’ Us amassed $5 billion in debt. That came from slashing prices, signing major, exclusive licensing deals with toymakers and buying up other toy giants FAO Schwartz and KB Toys over the past decade.

At one point, Toys ‘R’ Us showed signs of a turnaround. After being taken private in 2005, Toys ‘R’ Us filed for an initial public stock offering in 2010. It ultimately withdrew its filing, citing “unfavorable market conditions.”

Late Monday, Toys ‘R’ Us announced that it scrounged up $3 billion in bankruptcy financing, which it plans to use to restructure the company, alleviate its debt burden and revamp its stores.

The bankruptcy filing comes just ahead of the holiday season, the busiest time for the year for Toys ‘R’ Us. The company said it plans on keeping its 1,600 Toys ‘R’ Us and Babies ‘R’ Us stores open across the world, though the Wall Street Journal reported that the company will eventually close some of its underperforming locations as part of the bankruptcy process.

Toys ‘R’ Us noted in a press release that “the vast majority” of its stores are profitable. But the trend line is pointing in the wrong direction. The company reported that same-store sales fell by more than 4% last quarter, losing $164 million.

CEO Dave Brandon on Monday called the retail landscape “increasingly challenging and rapidly changing” but said he was confident that the Toys ‘R’ Us brand will “live on for many generations.”

“Today marks the dawn of a new era at Toys ‘R’ Us where we expect that the financial constraints that have held us back will be addressed in a lasting and effective way,” said Brandon in a prepared statement.

Related: Toys ‘R’ Us bankruptcy fears hit Mattel and Hasbro

Toys ‘R’ Us joins a list of hundreds of companies that have succumbed to the online threat and filed for bankruptcy protection this year. That includes the children’s clothing store Gymboree, teen outlet Rue21 and Payless Shoe Source.

It closed its gigantic store in New York’s Times Square at the end of 2015. It recently opened a temporary, smaller store for the holidays in another part of the popular Manhattan tourist spot though.

The troubles facing Toys ‘R’ Us aren’t just about competition from Amazon (AMZN, Tech30) and Walmart (WMT). A lackluster summer at the box office might be hurting the entire toy industry, which depends on hit movies to drive sales of licensed toys.

Toy companies also have to deal with the fact that many kids are increasingly playing games on consoles, phones and tablets and not with old-school action figures, dolls and other toys.

Even Lego has been struggling lately. Investors are worried that Mattel and Hasbro could be in trouble, too.

Mattel(MAT), acknowledging the threat from tech, recently hired a new CEO who used to be an executive at Google. Its stock dropped 6% on Monday, to its lowest level since 2009, and Hasbro (HAS) fell 1%. Each company relied on Toys ‘R’ Us for more than 10% of its sales in the most recent fiscal year.

– Paul R. La Monica contributed to this report


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