Dueling lawsuits surround the KB Toys bankruptcy case (see 'KB Toys Plans To Close More Stores'), with a key hearing scheduled for March 3rd.  Creditors, including Hasbro and Lego, kicked things off by alleging in bankruptcy court that KB's top executives and an investor improperly received $121 million shortly before KB entered bankruptcy last year, weakening the company at a critical time. 

 

Former owner Big Lots, Inc., which sold KB to Bain Capital and a management group in 2000, sued KB's managers, alleging that it's owed $45 million that would have been repaid if the $121 million payouts had not occurred.  KB is trying to block that suit at a hearing in bankruptcy court this week.  The court will also consider the creditors' claims regarding the payouts at the hearing.