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UNITED STATES BANKRUPTCY COURT 

EASTERN DISTRICT OF VIRGINIA 

Richmond Division 

In re Toys “R” Us, Inc., et al.1 Case No. 17-34665-KLP 

 Debtors. Chapter 11 

 Jointly Administered 

TRU Creditor Litigation Trust, 

 Plaintiff, 

v. Adv. Pro. No. 20-03038-KLP 

David A. Brandon, et al., 

 Defendants. 

MEMORANDUM OPINION AND ORDER 

 Plaintiff, TRU Creditor Litigation Trust (the “Trust”), commenced this suit 

against Defendants (the “Defendants”), former directors and officers of Toys “R” Us, 

alleging various breaches of fiduciary duty, fraudulent misrepresentation and 

concealment, negligent misrepresentation and concealment, and negligence. The 

Trust’s second amended complaint (the “Complaint”) includes a demand for a jury 

trial “on all matters subject to jury trial.” AP ECF 146, p. 115.2 

The Trust has filed a motion (the “Second Jury Trial Motion”) seeking an 

order confirming its entitlement to a jury trial on all claims asserted in the 

Complaint. The Trust asserts that it is seeking only legal relief in the form of 

compensatory and punitive damages and is not seeking equitable relief such as an 

1 The Debtors in these cases, along with the last four digits of each Debtor’s tax 

identification number, are set forth in the Order (I) Directing Joint Administration of 

Chapter 11 Cases and (II) Granting Related Relief. AP ECF 78. 

2 All references to “ECF” are to docket entries in the lead case unless otherwise noted. 

References to the docket in this adversary proceeding are prefaced by “AP ECF.” 

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injunction or restitution; it therefore maintains that the Seventh Amendment 

guarantees its right to a jury trial. The Defendants counter that the Trust is not 

entitled to a jury trial on any of its claims, arguing that there is no right to a jury 

trial because Counts 1-4 of the Trust’s claims are equitable in nature and, with 

respect to Counts 5-9 of the Complaint in which the Trust asserts claims of 

individual trade vendors, the right to a jury trial was waived pursuant to language 

included in a Master Purchase Order Agreement executed by trade vendors before 

the bankruptcy filings. 

Background 

 On September 18 and 19, 2017, Toys “R” Us, Inc. and twenty-four affiliated 

entities (collectively, “TRU” or “Debtors”) filed voluntary Chapter 11 petitions for 

relief in the United States Bankruptcy Court for the Eastern District of Virginia. 

The cases were jointly administered pursuant to Bankruptcy Rule 1015(b). The lead 

case was Toys “R” Us, Inc., Case No. 17-34665-KLP.3

3 An order was entered on September 19, 2017, in accordance with Rule 1015(b) of the 

Federal Rules of Bankruptcy Procedure and Rule 1015-1 of the Local Bankruptcy Rules for 

the United States Bankruptcy Court for the Eastern District of Virginia directing joint 

administration for procedural purposes only of the chapter 11 cases of: Toys “R” Us, Inc., 

Case No. 17-34665-KLP; Geoffrey Holdings, LLC, Case No. 17-34660-KLP; Geoffrey 

International, LLC, Case No. 17-34666-KLP; Geoffrey, LLC, Case No. 17-34667; Giraffe 

Holdings, LLC, Case No. 17-34661; Giraffe Junior Holdings, LLC, Case No. 17-34662-KLP; 

MAP 2005 Real Estate, LLC, Case No. 17-34663-KLP; Toys “R” Us - Value, Inc., Case No. 

17-34664-KLP; Toys “R” Us (Canada) Ltd., Case No. 17-34668-KLP; Toys “R” Us - Delaware 

Inc., Case No. 17-34669-KLP; Toys “R” Us Europe, LLC, Case No. 17-34670-KLP; Toys “R” 

Us Property Company II, LLC, Case No. 17-34671-KLP; Toys Acquisition, LLC, Case No. 

17-34672-KLP; TRU Asia, LLC, Case No. 17-34673-KLP; TRU Guam, LLC, Case No. 17-

34674-KLP; TRU Mobility, LLC, Case No. 17-34675-KLP; TRU of Puerto Rico, Inc., Case 

No. 17-34676-KLP; TRU Taj (Europe) Holdings, LLC, Case No. 17-34677-KLP; TRU Taj 

Finance, Inc., Case No. 17-34678-KLP; TRU Taj Holdings 1, LLC, Case No. 17-34679-KLP; 

TRU Taj Holdings 2 Limited, Case No. 17-34680-KLP; TRU Taj Holdings 3, LLC, Case No. 

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 On March 22, 2018, the Court entered an Order authorizing TRU to wind 

down U.S. operations, authorizing U.S. store closings, establishing administrative 

claims procedures, and granting related relief. In connection with its wind-down, on 

July 17, 2018, TRU filed with the Court a settlement agreement (the “Settlement 

Agreement”) entered into by and among multiple parties. The Settlement 

Agreement resolved numerous issues relating to the liquidation of TRU’s U.S. 

businesses. The parties to the Settlement Agreement agreed to release all claims 

against each other. The Settlement Agreement provided that a “Non-Released 

Claims Trust” would be established for the purpose of administering all nonreleased claims, including claims held by TRU and its creditors against TRU’s 

directors and officers. The Court entered an order approving the Settlement 

Agreement on August 8, 2018. 

On December 17, 2018, the Bankruptcy Court confirmed the Third Amended 

Chapter 11 Plan of TRU (the “Plan”). ECF 5979. Article XI of the Plan stated with 

respect to jurisdiction that: 

Notwithstanding the entry of the Confirmation Order and the 

occurrence of the Effective Date, on and after the Effective Date, the 

Bankruptcy Court shall retain such jurisdiction over the Chapter 11 

Cases and all matters, arising out of, or related to, the Chapter 11 Cases 

and the Plan, including jurisdiction to . . . 

19. Resolve any cases, controversies, suits, disputes, or Causes of 

Action that may arise in connection with any Non-Released 

Claims, including the D&O Claims . . . . 

17-34681-KLP; TRU Taj LLC, Case No. 17-34682-KLP; TRU-SVC, Inc., Case No. 17-34659-

KLP; Wayne Real Estate Parent Company, LLC, Case No. 17-34683-KLP. 

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On April 30, 2019, the Debtors filed the Non-Released Claims Trust 

Agreement. ECF 6925. Section 2.3(a) of that agreement provides in part that: 

[t]he TRU Creditor Litigation Trust shall be the successor-in-interest to 

the Debtors with respect to any Non-Released Claims that were or could 

have been commenced or asserted by, or on behalf of, any of the Debtors 

or their estates prior to the applicable Effective Date, shall be deemed 

substituted for each such Debtor as the party in any such litigation and 

shall have the right to proceed in the name, right and stead of the 

Debtors with respect to all such Non-Released Claims. 

 In furthering its duty to pursue the non-released claims, the Trust initiated 

this litigation against the Defendants. It originally filed the Complaint in the 

Supreme Court of the State of New York, County of New York. The case was 

removed to the U.S. District Court for the Southern District of New York and then 

transferred, upon Defendants’ motion, to the U.S. District Court for the Eastern 

District of Virginia. On May 5, 2020, the Virginia District Court referred the case to 

this Court. Case No. 3:20-cv-00311-DJN, ECF 15. 

 This adversary proceeding was initiated by the assignment of the case to this 

Court. The parties entered into an agreed scheduling order on October 5, 2020 (the 

“Scheduling Order.”) AP ECF 67. The Scheduling Order provided that April 29, 

2021, was the deadline to file a “waiver of jury trial or motion re: right to jury 

trial.” AP ECF 67. The Scheduling Order was amended various times thereafter to 

extend certain dates, the last amendment being January 4, 2022, but the date for 

filing jury motions was never extended. On April 10, 2021, the Trust timely filed a 

motion (the “First Jury Trial Motion”) seeking a ruling that the Trust’s right to a 

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jury trial on the claims asserted against Defendants had not been waived and that 

the Trust had the right to move for a jury trial. AP ECF 134. 

The Settlement Agreement includes a waiver of the right to a jury trial for 

any “legal proceeding arising out of, or relating to, this Settlement Agreement or the 

transactions contemplated hereby.” ECF 4083, Ex. 1, Settlement Agreement, 

§ 4.8(b). The Trust maintained that the waiver is limited to claims challenging or 

enforcing the terms of the Settlement Agreement itself. The Defendants countered 

that this provision constitutes a waiver of the Trust’s right to a jury trial on all the 

claims asserted in this adversary proceeding. On September 3, 2021, the Court 

entered an order granting the First Jury Trial Motion, AP ECF 257, accompanied 

by a Memorandum Opinion finding that the Trust’s right to a jury trial had not 

been waived. AP ECF 256. The Court ruled that the Trust’s right to a jury trial had 

not been waived; the only argument raised by either party was as to the effect of the 

Settlement Agreement. The decision was not contested by either party. 

On January 4, 2022, the Trust filed a motion in the District Court seeking to 

have Judge Phillips of this Court designated as the trial judge (the “Designation 

Motion”), as required by 28 U.S.C. § 157(e). The District Court ordered this Court to 

provide a report and recommendation on the matter, which this Court did on 

February 15. The District Court has not yet ruled on the Designation Motion. 

Meanwhile, the Trust, in search of an earlier trial date, advised this Court, in the 

January 2022 hearing on the Second Jury Trial Motion, that it would be seeking to 

have the District Court hear any jury trial that the parties might be entitled to. In 

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furtherance of that goal, the Trust filed a motion to withdraw the Designation 

Motion in the District Court (the “Withdrawal Motion”). 

 Upon the Trust’s filing of the Withdrawal Motion, the District Court ordered 

this Court to provide its report and recommendation thereon by March 31, 2022. 

The Court is in the process of doing so. 

Jurisdiction and Venue 

The Court has jurisdiction over this matter pursuant to 28 U.S.C. §§ 157 and 

1334, the Order of the U.S. District Court for the Eastern District of Virginia 

referring this matter to the Bankruptcy Court (No. 3:20-cv-311 (DJN), ECF 15), and 

the Standing Order of Reference from the United States District Court for the 

Eastern District of Virginia, dated August 15, 1984. Venue is proper before this 

Court pursuant to 28 U.S.C. §§ 1408 and 1409. 

Conclusions of Law 

The parties urge that whether the Trust is entitled to a jury trial on Counts 

1-4 of the Complaint, involving alleged breaches of fiduciary duty, depends on the 

nature of the claims brought and the remedies sought. They further urge that 

whether the Trust is entitled to a jury trial on Counts 5-9 (fraudulent 

misrepresentation and concealment, negligent misrepresentation and concealment, 

and negligence) turns on whether the Defendants may revisit the question of 

whether the Trust has waived its right to a jury trial and if so, whether the terms of 

certain preexisting contractual obligations between the trade vendors whose claims 

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were assigned to the Trust and the Debtors resulted in a waiver of the right to a 

jury trial. 

The parties have expended considerable time and effort pursuing and 

defending the Second Jury Trial Motion. Whether the Court will hold a jury trial 

will significantly impact the scheduling of the trial of the case, the parties having 

advised the Court at the January 11 hearing that the trial may take multiple weeks 

to complete, the Trust estimating at least twenty court days. The Court’s first 

available time for such a lengthy trial is in November 2022. At the hearing, the 

Trust indicated its desire to have the District Court preside over any trial, stating 

its hope for an earlier trial.4 Counsel for the Trust advised the Court that “ [t]he 

Trust now believes that it would be more efficient and beneficial for the court 

system and the parties to have the district court preside over any matters that 

would be eligible for a jury trial. The reasons revolve around scheduling and the 

potential for further delay.” Transcript p. 2, AP ECF 413. Subsequent thereto, the 

Trust filed the Withdrawal Motion in the District Court. The Defendants stated at 

the January 11 hearing that they were opposed to having the District Court preside 

over any trial in this matter. Resolution of the jury trial entitlement issues is a 

crucial factor in scheduling this trial, as a jury trial will be much lengthier than a 

bench trial. 

4 Until being advised at the January 11 hearing of the additional time needed for trial, the 

Court had scheduled this trial for two weeks in April 2022. 

 

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The Court is troubled by the recent developments in this case. The Second 

Jury Trial Motion was not filed timely as prescribed in the Scheduling Order. The 

deadline set forth in the Scheduling Order was April 9, 2021. As noted above, the 

First Jury Trial Motion was timely. However, the Second Jury Trial Motion, seeking 

a determination of which counts of the Complaint give rise to the right to a jury 

trial, was not filed until November 23, 2021, over seven months after the 

Scheduling Order’s deadline. The hearing on the Second Jury Trial Motion was held 

on January 11, 2022. 

The Trust has offered no explanation for its delay in filing the Second Jury 

Trial Motion; however, the delay in presenting questions regarding the scope and 

timing of a jury trial has greatly contributed to the additional delays of which the 

Trust now complains. The Trust’s filings in the District Court have added further 

complications and delays. Such actions are unduly prejudicial.5 

The District Court and this Court have expended substantial time and 

resources in addressing the jury trial and scheduling issues, including the issue of 

which court will preside over the trial. This Court is unaware of any other instance 

in which a litigant could seek to “switch horses in midstream” and replace the trial 

judge at this stage of a proceeding.6 The parties provided in the October 2020 

5 At the hearing on the Second Jury Trial Motion, the Trust stated for the first time its 

intention to seek a different forum for any jury trial to which it might be entitled. It first 

sought to have a jury trial held before this Court, and in furtherance thereof filed the 

Designation Motion. It has now apparently reconsidered this course of action and decided 

that the District Court would be its preferred forum. 

6 Certain exceptions exist for jurisdictional challenges and extraordinary circumstances, 

none of which are the case here. 

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Scheduling Order that “[t]he parties consent to Judge Phillips for all pretrial 

proceedings. If the case proceeds to trial, the parties further agree that they would 

consent to Judge Phillips as the trial judge, whether the trial is a bench trial or a 

jury trial.” AP ECF 67, p. 4. Despite this, the Trust now seeks the option of 

choosing the adjudicating forum that it deems most desirable. 

The Court finds that the Second Jury Trial Motion is time-barred by the 

agreed-upon Scheduling Order. Consequently, it will be denied. See Fed. R. Bankr. 

P. 7016(a), incorporating Fed. R. Civ. P. 16(f)(1)(c).7 For that reason, the Court will 

not address the time-barred fiduciary duty counts for which the Trust asserts a 

right to a jury trial. The Trust has failed to establish its right to a jury trial, and as 

a result, there will be no jury trial on Counts 1-4. 

The Defendants have sought to resurrect the waiver defense they asserted in 

the First Jury Trial Motion. The Court has already disallowed the waiver defense in 

its ruling on that motion. The Court found that “the Defendants have offered no 

conclusive evidence that the jury waiver was intended to broadly apply to the 

causes of action being brought by the Trust and thus, have failed to carry their 

burden of proving that the Trust voluntarily and knowingly waived its right to a 

jury trial.” The time for the Defendants to present evidence and argument that the 

Trust had waived its right to a jury trial was during the resolution of the First Jury 

7 Civil Procedure Rule 16(f)(1) provides that “[o]n motion or on its own, the court may issue 

any just orders, including those authorized by Rule 37(b)(2)(A)(ii)-(vii).” Bankruptcy Rule 

7037 incorporates Civil Procedure Rule 37(b)(2)(A)(ii)-(vii), which includes as a sanction 

“prohibiting the disobedient party from supporting or opposing designate claims or defense, 

or from introducing designated matters in evidence.” Id. at (ii). 

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Trial Motion. The Defendants have not filed a motion to reconsider that ruling and 

have filed no appeal, so that order is final. The Court will not revisit issues already 

decided in a case such as this, where the parties extensively litigate nearly every 

issue in the case. To do so would unnecessarily drain the resources of the Court and 

add further delay. 

For the reasons set forth above, the Second Motion for Jury Trial is DENIED 

and the Court’s order on the First Jury Trial Motion remains in full effect as to any 

assertion of waiver by the Defendants. 

Signed: March 31, 2022 /s/ Keith L. Phillips 

 United States Bankruptcy Judge 

Copies: 

Robert I. Bodian 

Scott A. Rader 

Amanda B. Asaro 

Kerime S. Akoglu 

MINTZ LEVIN COHN FERRIS 

GLOVSKY and POPEO, P.C. 

Chrysler Center 

666 Third Avenue, 25th Floor 

New York, New York 10017 

James C. Cosby 

J. Brandon Sieg 

O’HAGAN MEYER, PLLC 

411 E. Franklin Street, Suite 500 

Richmond, Virginia 23219 

Greg Dovel 

Christin Cho 

DOVEL & LUNER, LLP 

201 Santa Monica Blvd., Suite 600 

Santa Monica, California 90401 

Michael Wilson 

Entered on Docket: Mar 31 2022

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MICHAEL WILSON PLC 

12733 Storrow Rd. 

Henrico, Virginia 23233 

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