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Professor Gotberg: Failure to Innovate Led to the Toys ‘R’ Us Bankruptcy

April 25th, 2018

Brook Gotberg

Professor Brook E. Gotberg is the co-author (with Professor Anthony J. Casey of the University of Chicago Law School) of a recent post in The CLS Blue Sky Blog, Columbia Law School’s blog on corporations and the capital markets.  The post, “Toys ‘R’ Us and Bankruptcy: Death by Disruption, Not Debt,” challenges conventional wisdom that the retailer failed primarily because of a leveraged buyout, which saddled the company with large amounts of debt over a decade before its bankruptcy filing. Gotberg and Casey write that although the debt could have been successfully managed in bankruptcy proceedings, the failure to innovate to meet shopper preferences led to the need for liquidation. Professor Gotberg has written more on the association between technological advances and bankruptcy proceedings in “Technically Bankrupt,” which was published in The Seton Hall Law Review in late 2017.

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