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K•B Toys (previously known as Kay Bee Toys) is a chain of mall-based retail toy stores in the United States. It was founded in 1922 by the Kaufman brothers. It currently operates 605 stores in 44 U.S. states, Puerto Rico as well as Guam. KB Toys operates three distinct store formats: K•B Toys, K•B Toy Works, and K•B Toy Outlets (aka Toy Liquidators). It is privately held in Pittsfield, Massachusetts. K•B Toys was owned by Big Lots and Melville Corporation at one time.
Financial trouble
In 2004, due to increasing competition from national discount chains such as Wal-Mart, on January 14, K•B Toys filed for Chapter 11 bankruptcy protection and closed 365 stores.
In 2005, Big Lots and a group of creditors, including toymakers Hasbro and Lego filed a lawsuit against top K•B Toys executives, which claimed that K•B Toys executives improperly paid themselves over $121 million, while ignoring debts and closing stores. The executives responded that they had done nothing wrong, and the store closings, layoffs and debts were the product of intense competition with big box retailers such as Wal-Mart and Target. The lawsuit was later settled for pennies on the dollar. Though, there are stores being remodeled in Orlando, Florida if that is any indication of the state of the company currently.
In 2007, K•B plans to close close to 150 stores beginning on November 8th. The Gordon Brothers Group will handle the liquidation of these stores. managers have been promised a minimum of four weeks severance pay upon completing their service through liquidation.
Lawsuit
Hong Kong-based Silverlit Toys Manufactory Ltd., an acknowledged leader in the development and manufacturing of high-quality electronic toys, and Spin Master Ltd., Silverlit’s North American distribution partner and owner of the well-known Air Hogs brand of flying toys, have jointly filed a lawsuit against K•B Toys and Westminster Inc. in the U.S. District Court for the Eastern District of Virginia to stop sales of a competing Mini Helicopter. The lawsuit alleges that the Thunder Wolf Mini Indoor MicroLite Helicopter infringes certain U.S. design patents owned by Silverlit, creator of the Havoc Heli licensed by Spin Master and sold as the Air Hogs Havoc Heli. Further, the lawsuit contends that KB and Westminster conspired to copy the popular Air Hogs Havoc Heli and replace those sales with the infringing Thunder Wolf. In addition to an injunction against further sales, the lawsuit also seeks damages for past sales.
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