Business

Toymaker says Toys R Us was misleading about bankruptcy

A Florida toymaker lashed out at Toys R Us management on Tuesday, saying the retailer’s executives misled it about getting paid just to keep inventory levels high.

“It was certainly ethical fraud and disgusting and despicable,” Jay Foreman, chief executive of Basic Fun, whose Uncle Milton Moon in My Room was sold at the chain for $22.99.

“It is my belief from the actions the company took leading up to and during the bankruptcy process that the most senior executives, advisers and lawyers executed a fraud,” said Foreman, whose company is one of dozens owed millions of dollars by the Wayne, NJ-based chain.

Toys R Us promised Foreman, whose company is a critical vendor, that it would pay some of its pre-Chapter 11 bills, he said.

So Basic Fun continued to support the chain and kept the trucks rolling to its distribution centers.

But no money was ever paid — and the Boca Raton company is now owed $6 million.

The alleged lies told by the retailer’s brass means Foreman’s plan to hire a dozen workers has been put on ice.

“It [also] means lower bonuses and salary increases for our staff … until we can recover the losses through operations,” Foreman told The Post.

Basic Fun also makes Lite Brite, Pacman, Pokemon and Lincoln Logs toys.

The misinformation from the chain is particularly galling, Foreman said, because he was one of the vendors who continued to support the fast-sinking retailer — especially through the crucial holiday season after it had filed Chapter 11.

“I’m hearing across the board that creditors were strung along during the bankruptcy process to ship more goods and were promised that they would get critical vendor status or some arrangement would be made to take care of their pre-petition claims — and that never happened,” said Richard Weltman, a bankruptcy lawyer representing a number of vendors.

One of the executives who allegedly misled Basic Fun is Richard Barry, the chain’s global chief merchandising officer — whom Foreman has known for 15 years.

Foreman said he met with Barry on Jan. 10 in Hong Kong at Basic Fun’s showroom, where the two agreed on the terms of a $2.6 million payment — provided the toy shipments would continue. The payment was never made.

Frustrated, on Feb. 21 Foreman emailed Barry wondering about his cash.

“Richard, I shook your hand. We had a deal and I’m holding you personally to it or a reasonable substitute,” Foreman wrote. “That money is coming out of my pocket and hurts badly.”

Neither Toys R Us nor Barry responded to requests for comment.