Toy Company Basic Fun Files for Chapter 11 Bankruptcy Protection

Florida-based toy company Basic Fun, known for owning the iconic Tonka toy brand since 2019, has filed for Chapter 11 bankruptcy protection as part of a financial restructuring plan. The company’s leaders estimated its debt to be between $50 million and $100 million, with assets totaling less than $50,000.

Basic Fun is seeking approval for $50 million in debtor-in-possession financing from affiliates of Great Rock Capital, along with a $15 million letter of credit from RBC and the company’s founders to keep the business afloat during the restructuring process. The company acquired Tonka from Hasbro in 2019, along with other popular toy brands like My Little Pony, Lite Brite, and Care Bears.

In a statement, Basic Fun’s CEO and majority shareholder, Jay Foreman, cited various challenges that led to the financial distress, including the closure of Toys ‘R’ Us in 2018, trade wars with China, and the impact of COVID-19. Foreman expressed optimism about using the restructuring process to overcome these challenges and position the company for future growth.

The history of the Tonka brand dates back to 1946 when it was founded as Mound Metalcraft in a Twin Cities suburb. The company initially manufactured metal items before transitioning to toy manufacturing, eventually becoming Tonka Toys Inc. in 1948. Despite facing ups and downs over the years, including plant closures and relocations, Tonka has remained a beloved brand in the toy industry.

With the restructuring plan in place, Basic Fun aims to navigate through its financial difficulties and emerge stronger, ensuring a successful future for the company and its iconic toy brands.