Toys 'R' Us Canada Owes $160M and May Never Repay: 53 Stores Closed, Paw Patrol's Creator Among the Unpaid

Toys 'R' Us Canada entered creditor protection, owing at least C$160M (£85M) to suppliers and landlords, with no claim on its assets. Fifty-three shops had already gone in the two years before the filing, and Spin Master, the Canadian maker of Paw Patrol, sits among the companies suing over unpaid bills.

The retailer sought the court's shelter in Ontario on 3 February, blaming inflation, labour costs, supply disruption, and the shift to online shopping. A judge has since approved carving the business into pieces for separate buyers, and one supplier's account this week shows what that process looks like from the back of the line.

Who Is Owed and Who Gets Paid First

Creditor protection freezes a company's bills while it restructures, and it sorts those owed money into a strict order. Secured lenders, who hold rights over assets, stand first. The unsecured, who could not seize so much as a teddy bear, wait behind them and routinely collect a fraction or nothing. At least C$160M sits in that lower tier here, about C$120.9M (£64.1M) of it due to vendors.

The queue contains some of the biggest names in the toy cupboard alongside tiny ones, as the chart below shows.

Court papers list C$6.7M (£3.6M) owed to Lego's Canadian arm, more than C$11M (£5.8M) to companies connected to Mattel, C$3.7M (£2M) to a Spin Master division and C$2.2M (£1.2M) to Hasbro. At least six suppliers have sued, while landlords, including RioCan and Cadillac Fairview, have terminated leases and brought claims totalling roughly C$35M (£18.6M). None of the claims has been tested, and the company has largely denied them.

Alvarez & Marsal, the court-appointed monitor, steers the process. Gift cards stopped being honoured a fortnight after the filing, and headquarters equipment had been auctioned off before Christmas.

The Family Firm at the Back of the Line

KidsVIP Canada, a family business in Vaughan, Ontario, shipped 680 ride-on toys and other products to the chain and says invoices worth more than C$166,000 (£88,000) went unpaid. Payments faltered from late 2024, and in correspondence reviewed by the broadcaster CTV, the retailer conceded in October 2025 that 'cash is so tight' while promising better times by Black Friday.

The messages stopped in mid-November, and the family's fear now speaks for a whole class of creditors, as the post below shows.

Owner Victoria Snaider says the monitor's team has told the family to write the money off, with recoveries flowing to banks, landlords, and the largest creditors first. She puts the full loss near C$600,000 (£318,000) once costs are counted. 'I'm not asking something unusual,' she said, only that every business be considered.

Nobody on the other side is saying much. The monitor has not responded to repeated press enquiries about the family's case, and Putman Investments, the chain's owner since 2021, has not answered reporters' requests for comment.

From 82 Stores to a Carve-Up

The Canadian chain once looked like the survivor of the brand's global wreck. The American parent entered bankruptcy protection in 2017 and liquidated the following year. The Canadian arm, 82 stores strong, was rescued by Fairfax Financial and then sold in 2021 to Doug Putman, owner of the entertainment chains HMV and Sunrise Records.

Five years on, the timeline runs to a courtroom, as the graphic below sets out.

The 22 stores open at the filing have thinned to 16 on the latest count, and the workforce has fallen from about 654 to roughly 510. In June, the court approved splitting the brand, the leases, and the operating assets among three buyers, and certainty about any shop runs only to January 2027.

British readers have watched this film before: all 100 UK branches closed in 2018, and the name later returned inside WHSmith shops, 146 of them by this spring. The nostalgia survives such collapses; as the Vaughan family can attest, the invoices rarely do.