Basic Fun: Toy Maker Restructures with DIP Financing and a Confirmed Plan

Basic Fun filed chapter 11 on June 28, 2024, in the District of Delaware after what management described in the First Day Declaration as a multi-year sequence of industry disruptions — including the Toys "R" Us closure, trade and supply chain pressures, and a consumer slowdown. The company, which owns and licenses toy and entertainment brands including Care Bears, Tonka, Lite-Brite, and K'Nex, pursued a plan-based reorganization supported by DIP financing from Great Rock Capital affiliates. The court entered a Confirmation Order in October 2024, the plan became effective on October 31, 2024, and the court entered a Final Decree in December 2024.

Debtor(s)	Basic Fun, Inc. (and affiliated debtors, jointly administered)
Court	U.S. Bankruptcy Court, District of Delaware
Case Number	24-11432 (CTG)
Judge	Hon. Craig T. Goldblatt
Petition Date	June 28, 2024
Reported Assets / Liabilities (filing)	$50 million to $100 million each
DIP Facility	Up to $50 million from Great Rock Capital affiliates
Plan Confirmation	October 21, 2024
Effective Date	October 31, 2024
Exit Financing	$50 million revolving exit facility from Great Rock; $65 million total new and existing financing at emergence
Case Closure	Final decree entered December 3, 2024
Claims Agent	Stretto, Inc.

Company Background

Basic Fun described itself as a global children's entertainment company that creates, designs, markets, and distributes toys, games, and entertainment properties. The company's portfolio blends owned brands with licensed properties, including Care Bears, Tonka, Lite-Brite, K'Nex, Lincoln Logs, Tinkertoy, Playhut, Uncle Milton, Mash'ems, and Littlest Pet Shop. Licensing partnerships include Hasbro, Disney, Mattel, Nintendo, Netflix, Coca-Cola, Universal, Cloudco Entertainment, and major sports leagues.

Distribution reached major mass retailers and online channels, including Walmart, Target, and Amazon, alongside amusement parks.

The company's CEO, Jay Foreman, was described as the majority shareholder, with co-founder John MacDonald also referenced in connection with the restructuring. A career profile described Foreman's trajectory through toy licensing and brand-building roles, including co-founding Play By Play Toys & Novelties in 1990, leading it through a public listing that raised $26 million, and subsequently running Play Along Toys (later acquired by Jakks Pacific) before founding The Bridge Direct in 2009 and acquiring Basic Fun!/Good Stuff. Basic Fun became master toy partner for a Care Bears relaunch and acquired a Tonka brand license from Hasbro in 2019.

K'Nex acquisition. Basic Fun purchased all K'Nex assets in 2018 in a transaction valued at about $21 million; K'Nex generated about $40 million in annual revenue at the time, and Basic Fun retained the Hatfield, Pennsylvania office and plant with about 40 employees. Lincoln Logs' IP rights were described as owned by Hasbro, with manufacturing handled by Pride Manufacturing for Basic Fun, while Tinkertoy was described as acquired by Basic Fun in 2018, with Hasbro previously owning the brand.

Path to Chapter 11

The company's June 2024 announcement described an "industry gauntlet of challenges" starting in 2018 and continuing through 2024, listing Toys "R" Us' closure, trade tensions, pandemic impacts, supply chain disruptions, inventory overstock conditions, and consumer slowdown.

Toys "R" Us generated about $35 million in annual sales for the company and its bankruptcy produced a receivables loss: about $6 million was uncollectible, with about $1 million recovered through insurance.

Date	Event
2018	Toys "R" Us bankruptcy cited as an early disruption; reporting tied it to ~$35 million in annual sales exposure and a receivables loss
2019–2022	Company cited trade and supply chain disruptions
2023–Early 2024	Company cited inventory overstock and consumer slowdown
June 2024	Filed chapter 11 with DIP financing

Capital Structure

The First Day Declaration described FY 2023 net sales of $144.1 million. Basic Fun listed assets and liabilities between $50 million and $100 million each and reported third-party debt of $11.6 million owed to suppliers, vendors, and creditors. The company reported about ~182 total employees across U.S. and international offices.

Item	Amount
Net sales (FY 2023)	$144.1 million
Assets (reported range)	$50 million to $100 million
Liabilities (reported range)	$50 million to $100 million
Employees (reported)	~182

Foreman and MacDonald committed up to $5 million in loans as founder support.

DIP Financing

Public announcements described a $50 million DIP facility provided by Great Rock Capital affiliates, alongside a subordinate facility described as $15 million from RBC and founders. Great Rock's press materials described providing the $50 million DIP facility to support operations during the restructuring.

The Final DIP Order described a multi-tranche DIP structure that included a revolving component (with an interim cap and a higher final cap), a term component funded through a conversion/exchange of existing obligations, and a delayed-draw PIK feature that became available after final approval. Pricing varied by tranche, including a variable-rate structure on the revolving component and higher fixed rates on the term and PIK components.

Term	Details
DIP lender	Great Rock Capital affiliates
Headline DIP size	$50 million
Subordinate facility	$15 million from RBC and founders
Structure	Revolving component with interim/final caps; term component via conversion; delayed-draw PIK feature
Pricing	Variable-rate revolver; higher fixed rates on term and PIK components

Plan of Reorganization

Basic Fun's restructuring proceeded through a Combined Plan and Disclosure Statement. The court confirmed the plan in October 2024, and the plan became effective on October 31, 2024. Basic Fun emerged from chapter 11 with $65 million in new and existing financing from lenders and founders, continuing operations across 60+ countries.

Creditor Class	Treatment
Other priority claims	Unimpaired / paid in full
Other secured claims	Unimpaired / paid in full
Mezzanine-related claims	Impaired; estimated recovery above 85%
TopCo note-related claims	Unimpaired / paid in full
General unsecured claims	Unimpaired / paid in full
Equity interests	Governance and equity restructuring mechanics

Exit Financing

Great Rock's November 2024 press release described a $50 million revolving credit facility provided to Basic Fun after emergence. The emergence announcement described $65 million of new and existing financing from lenders and founders. The Plan Supplement defined a senior exit revolving credit facility and a mezzanine exit facility established on the effective date.

Facility	Details
Senior exit facility	$50 million revolving credit facility from Great Rock
Total financing at emergence	$65 million in new and existing financing from lenders and founders
Mezzanine exit facility	Defined in the confirmed plan

Professional Retentions

Professional	Role
Polsinelli PC	Debtors' counsel
Oppenheimer & Co. Inc.	Financial advisor / investment banker
Stretto, Inc.	Claims agent

Key Timeline

Date	Milestone
June 28, 2024	Filed chapter 11 in Delaware
July–August 2024	DIP financing activity
October 2024	Plan confirmed; company emerged from chapter 11
October 31, 2024	Plan effective date
December 3, 2024	Final decree entered

Frequently Asked Questions

When did Basic Fun file for chapter 11 bankruptcy and where was the case filed? Basic Fun filed chapter 11 on June 28, 2024, in the District of Delaware.

What brands does Basic Fun own or license? Public materials and licensing coverage described a portfolio including Care Bears, Tonka, Lite-Brite, K'Nex, Lincoln Logs, Tinkertoy, Playhut, Uncle Milton, Mash'ems, and Littlest Pet Shop, with licensing relationships including Hasbro, Disney, Mattel, Nintendo, Netflix, and others.

What factors did management and reporting cite as leading to the filing? The company described a multi-year sequence of pressures including Toys "R" Us' closure, trade and supply chain disruptions, inventory overstock conditions, and a consumer slowdown. Toys "R" Us generated about $35 million in annual sales for the company and the retailer's bankruptcy left about $6 million uncollectible, with about $1 million recovered through insurance.

How much DIP financing did Basic Fun obtain? Public announcements described a $50 million DIP facility from Great Rock Capital affiliates, with court filings describing a multi-tranche structure including a revolving component and additional tranches with a PIK feature.

When was the plan confirmed and when did Basic Fun emerge? The plan was confirmed in October 2024, with an October 31, 2024, plan effective date.

How did the plan treat general unsecured creditors? The Combined Plan and Disclosure Statement described general unsecured claims as unimpaired and paid in full. A mezzanine-related class was treated as impaired with an estimated recovery above 85%.

What exit financing was put in place at emergence? Great Rock announced a $50 million revolving exit facility in November 2024, and the company described $65 million of total financing at emergence.

When was the case closed? The final decree closing the chapter 11 cases was entered on December 3, 2024.

Read more chapter 11 case research on the ElevenFlo blog.