FAO Emerges From Bankruptcy Protection

FAO Inc., which operates the FAO Schwarz and Zany Brainy toy store chains, emerged from Bankruptcy Court protection and completed the sale of $30 million of its convertible preferred stock.

Stockholders will retain about 9.3% of the shares, the company said. FAO agreed on $77 million in bank financing to be used to fund operations. The King of Prussia, Pa.-based retailer filed for bankruptcy protection in January.

Shares of FAO fell $2.05 to $5.30 on Nasdaq.