TORONTO — Toys “R” Us Canada has received court permission to put itself up for sale.
Judge Jane Dietrich on Wednesday approved a process that will see the struggling retailer solicit investments in the company or choose one or more buyers for the business or its assets by June.
The retailer did not specifically outline what it has up for grabs but has said in court records that its assets are valued at $126.8 million.
The business will have at most 18 stores by the time a potential sale wraps, and a government database showed it owns 162 trademarks. It’s possible a buyer will scoop up the entire business or multiple purchasers will buy pieces of it.
Offers will be collected in May with a buyer chosen in June, possibly through an auction, if there are enough bids. The company expects to seek court permission for any sales in June with a deal likely closing in July.
Toys “R” Us Canada resorted to the sales and investment solicitation process after it filed for creditor protection in February to cope with mounting debts and a wave of lawsuits from suppliers and landlords owed money from the chain.
The process allows for bids from the retailer’s owner Putman Investments or its affiliates. Putman Investments, an Ancaster, Ont.-based holding company that also runs HMV, Sunrise Records, Northern Reflections and Ricki’s, bought Toys “R” Us Canada in 2021.
Toys “R” Us Canada stakeholders, including suppliers owed $120 million, did not object to the company searching for investors or buyers.
However, Allied World Specialty Insurance Company, a firm that insured many of the retailer’s suppliers against nonpayment, had qualms with the process Toys “R” Us Canada proposed.
Ahead of Wednesday’s court hearing, it complained the process Toys “R” Us Canada pitched was developed without consultation from arm’s-length unsecured creditors. Allied said the process allowed insiders like Putman directors or senior management to communicate with others involved in the sale and could be ended within 29 days without the direction of the court, if an insider makes a bid.
Allied wanted stronger insider safeguards because Putman wholly owns Toys “R” Us Canada and the majority of the retailer’s properties.
“In these circumstances, the court should be particularly attentive to the integrity and fairness of the process,” Allied lawyers said in court records.
Toys “R” Us Canada eventually agreed to make changes to the sales process that Allied’s lawyer said made it “very happy.”
Allied World, which has received more than $66 million in claims from 36 Toys “R” Us suppliers, has previously hinted in court that it wants more scrutiny of Putman Investments. Allied said Putman sold five properties valued at $42 million to a related party for $38 million in the lead up to the company’s creditor protection filing.
Related parties are often subsidiaries or affiliates of another business, which in this case would be Toys “R” Us Canada or Putman Investments.
Allied is based in Delaware but part of a Fairfax Financial Holdings Limited’s portfolio. Toronto-based Fairfax purchased Toys “R” Us Canada for $300 million when it last filed for creditor protection in 2018. It then sold the business to Putman a few years later.
This report by The Canadian Press was first published April 1, 2026.
Tara Deschamps, The Canadian Press
