Troubled Internet retailer eToys filed for
bankruptcy Wednesday and shut down its Web site.
A message on the company's Web site informed visitors it is no
longer accepting new orders but will fulfill existing ones. "It's
been our sincere pleasure serving you," the message said.
The online toy seller's stock, which was last valued on the
Nasdaq Stock Market at 9 cents per share before trading was halted
last week, will officially be delisted Thursday.
EToys filed for Chapter 11 bankruptcy protection in U.S.
Bankruptcy Court in Wilmington, Del., where the company is
incorporated.
In its filing, the company said that as of Dec. 31, it had
assets of $416.9 million and debts of $285 million.
Company spokesman Ken Ross said Wednesday that debts now far
exceed assets on hand. He said the company has used some of that
cash for ongoing expenses and has sold much of its inventory.
In a release Wednesday, the company said it had liabilities of
$274 million as of Jan. 31 and that its liabilities would exceed
any potential proceeds from selling its assets.
Last week, the company sold its BabyCenter Inc. business to
Johnson & Johnson for $10 million.
In its filing, the company said it's largest creditor was a
South Carolina employment agency owed $2.46 million. It said it
owed a similar amount to a Los Angeles media buying firm.
EToys said it also owes United Parcel Service Inc. $1.5 million
and Hasbro Inc. $1.3 million. Other creditors include battery-maker
Rayovac Corp., Sega of America, Fisher Price brands and computer
game maker Electronic Arts.
Since the company announced on Feb. 26 that it would seek
bankruptcy protection, it has been liquidating its inventory of
toys and games, offering most products at discounts of up to 75
percent.
Last December, the company stunned Wall Street analysts when it
said sales would be about half of what was expected. In January,
the company laid off more than half its staff. In February, it sent
layoff notices to its remaining workers and said it had only enough
cash to stay open until the end of March.
The company said it will end all operations by April 6.
