Tuesday, April 15, 2003

FAO recovery plan in jeopardy



The Associated Press

PHILADELPHIA - FAO Inc., which owns the FAO Schwarz toy chain, said an unexpected withdrawal of investors has jeopardized its plan to emerge from Chapter 11 bankruptcy protection by Friday.

The toy retailer said it is exploring alternatives to complete its plan, including obtaining replacement funding or selling all or part of its operations. "We are hopeful that there will not be a need to liquidate," FAO Inc. spokeswoman Renee Hollinger said.

The company, based in the Philadelphia suburb of King of Prussia, has the right to spend cash that was originally kept as collateral for loans. That right expires Friday unless extended by its lenders.




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