WILMINGTON (Reuters) - Driven by a heavy debt load after a bad holiday season, Internet retailer eToys (ETYS) Inc. filed for Chapter 11 bankruptcy protection in advance of a liquidation expected to start on Thursday with the closing of its Web site.
In papers filed on Wednesday in the U.S. Bankruptcy Court in Delaware, eToys and three affiliates listed assets of $416.9 million and debts of $285.0 million.
In a statement on Feb. 26, when eToys first said it would file for bankruptcy protection, the company said its 178.4 million shares of common stock and series D preferred stock "have no value." At that time, the company also said it expected to close down its Web site around March 8.
After a disastrous Christmas season, eToys spokesman Ken Ross said last month. "The climate we faced remained extremely harsh, and in this climate a buyer (for the company) did not emerge." Most of the unsecured debt is in trade claims.
EToys said it expects to be delisted by Nasdaq and has cash to continue operations only to the end of March. Last week healthcare company Johnson & Johnson (JNJ) (JNJ.N) said it would buy eToys' BabyCenter Inc. for $10 million in cash. BabyCenter did not file for bankruptcy.
Those listed as owning at least 5 percent of eToys voting securities are Highland Capital Partners entities, Sequoia Capital (dossier) Partners entities, Intel (INTC) Corp. (INTC), HFTP Investment LLC, Fisher Capital Ltd., Wingate Capital Ltd., Leonardo LP, and company chairman and chief executive Edward Lenk.
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