Toymaker Basic Fun — the owner of the Tonka, K'Nex, Lite-Brite and Care Bears brands — has entered Chapter 11 in Wilmington, Del., but its CEO maintains the process is part of a basic restructuring.
"Like some old houses, some are for knocking down and some have great bones and just need a new roof and some paint," Jay Foreman said in a statement published by The Toy Book. "Basic Fun has great bones. We have a solid foundation and we have the means to fix our roof and put on a new coat of paint on the walls, not to mention a new game room."
Basic Fun, based in Boca Raton, Fla., has little in-house manufacturing and instead has a background in licensing and logistics. When it acquired the K'Nex Brands' line of plastic construction toys, it did so with a "multiyear supply agreement" for molded components in place.
The company is seeking $50 million in debtor-in-possession funding along with an additional cash infusion from new investors to help it emerge quickly from bankruptcy.
Foreman put the blame on a continuing fallout from the bankruptcy of the largest U.S. toy retailer, Toys R Us, in 2017. That was then compounded by the effects of COVID-19 shutdowns and supply chain disruptions.
"To be honest, this business has been humbling many of us from the biggest to the smallest and many like us in between," Foreman wrote. "… Some recognized when they needed a little help and some adjusting. Basic Fun needed a little adjusting and that's why we initiated a restructuring."