đ„New Chapter 11 Bankruptcy Filing - Car Toys, Inc.đ„
Western retailer of aftermarket audio components files to close/sell stores.
On August 18, 2025, PNW-based Car Toys, Inc. (the âdebtorâ) filed a chapter 11 bankruptcy case in the Western District of Washington (Judge Dore) to close 12 of its 47 stores and sell the other 35 to five buyers for a headline, aggregate purchase price of $13.75mm ⊠~$11.4m of which is to be financed by seller (debtor) notes.
Who is the brain trust behind this deal? Weâd forgive you if you thought it was this kid:
But no, despite being named Car Toys, the company doesnât sell actual car toys; rather, it plays with aftermarket car audio, detailing, window tinting, and vehicle upfitting accessories (adding shelving, toolboxes, emergency lighting, etc.) ⊠but really, itâs audio. That accounts for ~70% of the debtorâs annual revenue.
Um, yâall have seen the sh*t that comes stock in new cars these days, right?
Thatâs a dead business: there ainât no need when your whip rolls off the lot with deep bass and an 11â TV built-in. Audioâs been losing 8-10% of revenue YoY since â20. Here are recent financials:
Plus, the grim reaper came to collect the debtorâs affiliate and equally sus biz operator, Wireless Advocates, LLC (âWireless Advocatesâ), a wireless phone and service provider, in â22 after it lost an exclusive partnership with Costco Wholesale Corporation ($COST). That one slammed into chapter 7 back in â23, and the debtor got stuck with 100% of previously shared overhead.
The same year, the debtorâs founder, chairman, and majority shareholder Dan Brettler started coming out of pocket to fund operations, to the tune of ~$14.7mm by August â25, but apparently even he got tired of lighting cash on fire.
In Q3â24, the debtor brought on SierraConstellation Partners (âSCPâ), which resulted in the typical: the unjobbing of ~140 employees and implementation of â⊠a number of restructuring initiatives âŠâ that included getting rid of â⊠current and non-productive inventory âŠ.â Great call because, as far as the debtor can tell, after that, whenever hapless customers wandered into the debtorâs stores, they couldnât find jack worth buying.
Things apparently hit a breaking point around March â25 when the debtor and SCP â sans i-banker â kicked off efforts to find a buyer, which ended with those five purchase agreements we mentioned at the outset âïž.
And thatâs pretty much the goal of the BK: close those sales and send as much money back to Mr. Brettler as possible.
The court held a two-hour first-day hearing on August 22, 2025, at which ⊠um ⊠some requested relief was granted. Huge props to the debtorâs counsel, Cairncross & Hempelmann, P.S. (âC&Hâ), on creating a totally unnecessary dumpster fire.
Remember that affiliate Wireless Advocates is also in bankruptcy? Chapter 7. In that case, (former) employees filed an adversary complaint against both entities for WARN violations, and here, the debtor requested emergency relief to make a $125k settlement payment. Only issue: the payment ainât due until early October â25 ⊠nearly two months post-bankruptcy. Plenty of time for a second-day to come and go, so rather than let folks make shaky, hastily-put-together legal arguments, Judge Dore kicked the whole thing to September 9, 2025, at 10 a.m PT.
Same thing for the proposed $500k DIP. Mr. Brettler was supposed to supply that (at SOFR + .75), but, uh, the debtor doesnât need the cash at the outset. If the facility gets drawn at all, it wonât happen till mid-September â25. So after the US trustee (the âUSTâ) objected, Judge Cole punted that too, although he authorized interim use of cash collateral.
Finally, the debtor filed a motion to pay severance, a KERP, and a KEIP. The UST objected to that one too because a good number of recipients were obvious insiders. So, while the court gave the go-ahead for a $27k non-insider KERP, the rest got the boot too.
As alluded to above, the second-day hearing will go forward on September 9, 2025, at 10 a.m PT, where, hopefully, C&H is actually prepared. Or not, on September 2, 2025, the UST objected to the firmâs retention too.
The debtor is represented by C&H (Steven Palmer, Daniel Hagen, Bruce Leaverton, Maria Hodgins, Ryan Cole, Michael Feinberg) as legal counsel and SCP (Philip Kaestle) as financial advisor and CRO. Mr. Brettler is represented by Wenokur Riordan PLLC (Nathan Riordan, Faye Rasch, Alan Wenokur) as legal counsel. Virginia Burdette, as chapter 7 trustee for Wireless Advocates, is represented by K&L Gates LLP (Michael Gearin, Brian Peterson, Peter Talevich) as legal counsel.
Company Professionals:
Legal: Cairncross & Hempelmann, P.S. (Steven Palmer, Daniel Hagen, Bruce Leaverton, Maria Hodgins, Ryan Cole, Michael Feinberg)
Financial Advisor and CRO: SierraConstellation Partners (Philip Kaestle)
Claims Agent: Stretto (Click here for free docket access)
Other Parties in Interest:
Founder, Chairman, Majority Shareholder, and Prepetition and DIP Lender: Dan Brettler
Legal: Wenokur Riordan PLLC (Nathan Riordan, Faye Rasch, Alan Wenokur)
Chapter 7 Trustee of Affiliate Wireless Advocates, LLC: Virginia Burdette
Legal: K&L Gates LLP(Michael Gearin, Brian Peterson, Peter Talevich)