Kilroy was one of a number of Southern California landlords that required eToys and other dot-com companies to post letters of credit rather than cash as security on the theory that letters of credit would not be tied up in court as cash accounts would if dot.com companies went bankrupt.

EToys formerly occupied nearly all of a 151,000-sf office building at Kilroy's Westside Media Center in West Los Angeles. The REIT collected approximately $15 million on the eToys letters of credit for rent and as reimbursement for tenant improvement costs. Kilroy, which says the eToys suit is "without merit," says eToys defaulted on its lease and other obligations in January of 2001. The online toy retailer filed for bankruptcy in March of 2001.

Want to continue reading?
Become a Free ALM Digital Reader.

Once you are an ALM Digital Member, you’ll receive:

  • Breaking commercial real estate news and analysis, on-site and via our newsletters and custom alerts
  • Educational webcasts, white papers, and ebooks from industry thought leaders
  • Critical coverage of the property casualty insurance and financial advisory markets on our other ALM sites, PropertyCasualty360 and ThinkAdvisor
NOT FOR REPRINT

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.