As previously announced, the Plan provides for PKBT Funding LLC, an affiliate of Prentice Capital Management, LP, to invest $20 million in the reorganized KB Toys and provide the Company and its subsidiaries with a seasonal overadvance credit facility of up to $25 million. In exchange, PKBT will receive 100% of the preferred stock and, together with Roger V. Goddu, Gregory R. Staley and certain members of the KB Toys management team, 90% of the common stock of the reorganized Company. The remaining common stock will be held in a trust for the benefit of the unsecured creditors of KB Toys and certain of its subsidiaries.
Upon the Company’s emergence from Chapter 11, currently expected to occur on or about August 29, 2005, Gregory R. Staley, former President of Toys ‘R’ Us’ USA and International divisions, is expected to become KB Toys’ new President and Chief Executive Officer. When reached for comment, Mr. Staley stated, “We plan to create a fun and customer-friendly shopping experience, full of new products at great prices. KB Toys has a rich history - we expect the new KB Toys will be even better.” In addition to Mr. Staley’s role, Roger V. Goddu, formerly Chairman and Chief Executive Officer of Montgomery Ward, and also a former President of Toys ‘R’ Us USA, will serve as a director of, and consultant to, KB Toys. Both Mr. Goddu and Mr. Staley are well-known toy industry executives and bring a wealth of knowledge and experience to KB Toys.
Jonathan Duskin, a managing director of Prentice Capital stated: “KB Toys has an exciting opportunity and a dedicated group of employees. In addition to providing capital, we intend to fortify the Company with strategic expertise. Greg Staley is an experienced toy retailer who will provide the new KB Toys with great vision and leadership.”
Michael L. Glazer, KB Toys’ outgoing chief executive officer commented further: “KB is now well positioned to return to success. We appreciate the tremendous effort and loyalty displayed by our employees, vendors, landlords and business partners as we moved through the Chapter 11 process.”
KB Toys, Inc. is the nation’s largest mall-based specialty toy retailer. It is a privately-held company headquartered in Pittsfield, Massachusetts.
