Yesterday afternoon the news broke that Isaac Larian’s bid to buy 215 of the remaining US Toys R Us stores, along with the Canadian arm had been rejected. This was not a shock. His bid was almost embarrassingly low, at under 900 million dollars for both countries’ stores combined, and there was no way the court was going to take such a bid seriously. Larian (right) says that he’s disappointed, but didn’t give any solid hints to his next move.

His bid was so low that “unnamed sources” leaked its rejection to the Wall Street Journal before he’d even been formally notified. What is not clear is whether or not there are any other bids that would keep any of the stores in the US open. Lairan’s bid for 215 US stores was $675 million dollars, which is probably half of the minimum amount it would have had to have been to be taken seriously.

Larian had to have known this. My guess is that he went ahead with his bid in the hopes of bringing other bidders out of the closet that he could possibly team up with them and come up with an offer that might be considered by the trustees. At this moment, building a coalition of investors might be the best hope to keep TRU alive in the US.

While Toys R Us went bankrupt due to the overwhelming debt it was saddled with after a questionable leveraged buyout, it is not a worthless company. The name has value. The website has value. There are large real estate holdings worth a fortune. The reason nobody stepped in to buy them before they were forced into bankruptcy was that debt, estimated at five-to-twelve billion dollars, depending on the source. Aside from the debt, the company is probably worth four to six billion dollars, worldwide.

The Asian Toys R Us operations, of which TRU owns 85%, have reportedly drawn multiple bids of over a billion dollars.

It remains to be seen if there are enough interested parties looking to acquire any of the US stores to see any stores in the chain rescued. If there are, they’ll need to have way more money on hand than Larian had. Otherwise his best effort might be dropping his bid for the US stores, and tripling his bid for the Canadian arm of the company.

This story is likely to develop rapidly over the next few days. By this weekend, the liquidation sales should move into the next phase, with deeper discounts, but that could be pushed back if the court sees a ray of hope that some may stay open. Some stores are now telling customers that they might remain open into July.