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KEY POINTS Toys R Us could file for bankruptcy as soon as this week.

Toys R Us has been working with lawyers at Kirkland & Ellis to address its debt-load.

The potential bankruptcy comes ahead of the crucial holiday season, when the retailer does the majority of its sales.

Toys R Us could file for bankruptcy as soon as this week, according to sources familiar with the matter. The sources noted that the bankruptcy plans are not definite, and both its plans to file and its timing could change. A bankruptcy would help simplify a capital structure made complex by its trio of financial owners. Toys R Us was acquired by private equity firms Kohlberg Kravis Roberts and Bain Capital Partners and real estate investment trust Vornado Realty Trust in 2005 in a deal valued at $6.6 billion. The three owners either declined to comment or did not immediately have a comment. The debt restructuring would help provide Toys R Us the financial flexibility to invest in its business as it repositions itself to combat a changing retail landscape. Addressing the retailer's debt load prior to the crucial holiday season could give its major vendors such as Mattel and Hasbro clarity into the company's long-term viability to help ensure the toymakers continue to stock its shelves throughout the holiday. Toys R Us has hired restructuring lawyers at Kirkland & Ellis to help address looming $400 million in debt due in 2018, CNBC had previously reported, noting that bankruptcy was one potential outcome. Kirkland declined to comment.

A man shopping in a Toys-R-Us store in Fairfax, Virginia. Paul J. Richards | AFP | Getty Images

Earlier Monday, Reorg Research, a news service focused on bankruptcy and distressed debt, reported Toys R Us could file for bankruptcy as soon as Monday.

Tablets over toys