FAO Inc’s deal to sell The Right Start stores chain was rejected yesterday by a Federal bankruptcy judge, according to reports.
The ruling will spark liquidation sales at The Right Start and 300 employees will lose their jobs.
Judge Joel B. Rosenthal cited financing concerns over Right Start Acquisition Corp., which was established by private equity firm Hancock Park Capital, as the primary reason for rejecting the deal.
FAO said yesterday it would continue to liquidate its Zainy Brainy stores and pursue the sale of FAO Schwarz and Right Start.
FAO Inc. owns 15 FAO Schwarz stores, 38 The Right Start stores and 89 Zany Brainy stores. It filed for bankruptcy Dec. 4 after emerging from bankruptcy protection only eight months earlier.
