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Attorney General Lockyer Urges California Consumers to Quickly Use Gift Certificates from Bankrupt FAO, Inc. Stores
(SACRAMENTO) – Attorney General Bill Lockyer today urged consumers who have gift certificates from FAO Schwarz, Zany Brainy and Right Start stores to use them before January 12, 2004, when the bankruptcy of the stores' parent company may make it difficult to obtain the certificates' full value.
"While California law prohibits time limits on gift certificates, these stores' bankruptcy situation may threaten consumers' ability to obtain the full value of their certificates after January 11," said Lockyer. "To avoid any potential problems, consumers who want to use their certificates should make sure they meet that deadline."
FAO, Inc. – the parent company of FAO Schwarz, Zany Brainy and Right Start stores – on December 4, 2003, filed for Chapter 11 bankruptcy. FAO, Inc. asked the U.S. Bankruptcy Court for the District of Delaware to allow the stores to continue honoring gift certificates through January 11, 2004. The court granted FAO, Inc.'s request.
Customers who try to use their gift certificates after January 11, 2004 may find it difficult to obtain the full value of the certificate. For example, they may have to file a proof of claim in the bankruptcy court. If the debtor stores have insufficient assets to pay all creditors, such customers may be able to obtain, at most, only partial value for their certificates. Even partial payments may be delayed for months.
FAO Schwarz has a store in Los Angeles. Zany Brainy has stores in Torrance, San Diego, Pasadena, San Mateo, Huntington Beach, Thousand Oaks, Dublin and Newport Beach. Right Start has stores in West Los Angeles, Manhattan Beach, Santa Monica, Santa Clara, Corte Madera, San Francisco, Burlingame, Palo Alto, Carlsbad, Glendale, Tarzana, Sherman Oaks, San Diego, Walnut Creek, Mission Viejo and Costa Mesa. In addition, Right Start has shops in the Zany Brainy stores.