That just means banks wanted to lend Toys-R-Us money, knowing full well (because buyout) that it was going to be paid out to the shareholders, believing it woul

That just means banks wanted to lend Toys-R-Us money, knowing full well (because buyout) that it was going to be paid out to the shareholders, believing it wouldn't put the company under. That was an error in judgement. What exactly is wrong here ? Banks took a chance. Banks lost. Note that one might also point out that the government's QE policy is heavily stimulating exactly this. Nothing's preventing someone else from making a new big toy emporium. Though, presumably banks will be a bit less forthcoming with huge loans.