Toys R Us may soon liquidate its U.S. operations, sources told CNBC.
One of those people cautioned, however, that the situation remains fluid.
Both toymakers previously said that the retailer’s bankruptcy filing materially impacted their businesses.
In February, CNBC reported that the retailer was at risk of breaching the covenant on a $3.1 billion loan after a disappointing holiday season. Toys R Us’ sales, traffic and profit all fell far short of what it had told lenders to expect.
While a terrible holiday season hurt their chances of recovery, some of the lenders have been aggressive in pushing for liquidation.
Toys R Us had already begun liquidation sales ahead of planned store closures.
The toy retailer filed for bankruptcy in September as it struggled with its $4.9 billion in debt. Under bankruptcy protection, Toys R Us tried to find the financial flexibility to reduce that debt.
Bloomberg first reported the news.