The Car Toys bankruptcies come down to one main case. Car Toys, Inc. filed for Chapter 11 on August 18, 2025, sold most of its stores to new owners, and is closing out the old company through a court-approved liquidating plan.
- What Are the Car Toys Bankruptcies?
- Car Toys Bankruptcy Timeline
- Why Did Car Toys File for Bankruptcy?
- The shrinking car audio market
- The sales slide
- The Wireless Advocates shutdown
- Debt owed to the founder
- Is Car Toys Still Open? Who Bought the Stores?
- What Is Chapter 11, and Why Sell Stores This Way?
- What Was the Court Fight Over Insider Loans?
- What Does the Liquidating Plan Do?
- What Does It Mean for Customers?
- What About Workers and the WARN Act?
- Vendors and Creditors: How to Check Claims
- Common Mistakes to Avoid
- Frequently Asked Questions
- Conclusion
If you bought a gift card, hold a warranty, worked at a store, or sold parts to the company, this matters to you. If you just want to know whether your local shop is open, the short version is this: many stores still are, but they now have different owners, and some old deadlines have already passed.
What Are the Car Toys Bankruptcies?
The Car Toys bankruptcies are two linked failures. The main one is Car Toys, Inc.’s Chapter 11 case, filed August 18, 2025, in Washington State. The earlier one is Wireless Advocates, a sister company that shut down in December 2022. Together, they explain why the retailer sold most of its stores.
Car Toys began in 1987, when founder Dan Brettler opened one store in Bellevue, Washington. Over the years, it grew into a chain across Washington, Oregon, Colorado, and Texas. It sold and installed car stereos, remote starters, alarms, dash cams, and window tint.
Picture a driver in Tacoma whose remote starter quits the week the news breaks. He needs two answers: is the shop still there, and who stands behind the work? The rest of this guide answers both.
| Detail | Information |
|---|---|
| Company | Car Toys, Inc. (Auburn, Washington; some court-paper reports describe it as Seattle-based) |
| Court | U.S. Bankruptcy Court, Western District of Washington |
| Case number | 25-12288 |
| Judge | Timothy W. Dore |
| Filed | August 18, 2025 |
| Reported size | $10 million to $50 million in assets and liabilities |
| Stores | About 47 across four states (reports range from 46 to 48) |
| Sold | 35 stores to five buyers |
| Sale price | Purchase agreements totaled about $13.75 million; other reports range from $12.15 million to $14 million |
Car Toys Bankruptcy Timeline
Car Toys started looking for a buyer in March 2025, filed Chapter 11 on August 18, 2025, and sold its stores that fall. A liquidating plan followed in early 2026. A court-records tracker shows the plan confirmed on March 12, 2026.
| Date | What happened |
|---|---|
| Dec. 5, 2022 | Sister company Wireless Advocates shuts down |
| March 2025 | Car Toys begins marketing itself for sale and hires restructuring adviser SierraConstellation Partners |
| Aug. 18, 2025 | Chapter 11 petition filed; the company says it will sell most stores and close the rest, plus its distribution center and headquarters |
| Aug. 21, 2025 | A state WARN notice shows 177 workers affected, with separations starting Oct. 20 |
| Sept. 17, 2025 | First meeting of creditors, held by phone; continued Oct. 8 |
| Sept. 29-30, 2025 | Court enters sale orders for the store sales |
| Dec. 2025 | Settlement reached after a fight over insider control |
| Jan. 16, 2026 | Joint liquidating plan filed |
| Feb. 2, 2026 | Court approves the disclosure statement |
| Feb. 27, 2026 | Voting deadline on the plan |
| March 6 and 10, 2026 | Confirmation and follow-up hearings set |
| March 12, 2026 | Docket tracker lists the plan as confirmed |
Here is how to use it. If you bought a gift card in September 2025, you were inside the sale process. The card’s deadline came later, on December 31, 2025, so look at the customer section before you assume it still works.
Why Did Car Toys File for Bankruptcy?
Car Toys filed because sales fell for years and a sister company collapsed. Its aftermarket car audio business shrank as new cars came with built-in sound systems. The 2022 Wireless Advocates shutdown removed shared cost support, and growing debt, much of it owed to the founder, added pressure.
The shrinking car audio market
A decade ago, a driver who wanted Bluetooth in an older car bought a new stereo and had a shop install it. Today, the same driver gets a big factory screen with phone connection built in. That shift hurt shops like Car Toys.
According to the company’s first-day court papers, car audio made up about 70% of revenue and fell 8% to 10% a year after 2020. Factory-installed systems, known as OEM systems, held roughly 69% of the car audio market by 2024, one case summary reports.
The decline was not the whole auto parts world. The industry group MEMA reported that the overall U.S. aftermarket grew 8.6% to $391 billion in 2023. That number covers parts and accessories broadly, not car audio. The pain here was specific to one product line.
The sales slide
| Year | Revenue |
|---|---|
| 2021 | $127 million |
| 2022 | $123 million (down 3.3%) |
| 2023 | $113 million (down 8.3%) |
| 2025 (projected) | $60 million |
That is a 53% drop from 2021 to 2025. Denver Business Journal reporting, relayed by local news, said filings show the company lost money in each of the past three years.
The Wireless Advocates shutdown
Wireless Advocates ran phone kiosks, including 535 inside Costco stores and 65 on military bases. It ceased operations on December 5, 2022, and was reported to have wound down through a Chapter 7 liquidation. Car Toys told the court that the shutdown removed an affiliate that had shared its overhead costs.
The fallout reached Car Toys directly. One case summary reports that a WARN class action produced a $3.5 million settlement from the Wireless Advocates estate, and that Car Toys agreed to pay $125,000 to resolve claims it was a joint employer. A joint employer is a company that shares control over workers with another business.
This is the second “” behind the plural search term.
Debt owed to the founder
By August 2025, Brettler had lent the company more than $17 million, secured by nearly all its assets. His claims in the case later topped $20 million. That debt shaped the court fight described below.
See also Home Depot Rival Files for Bankruptcy
Is Car Toys Still Open? Who Bought the Stores?
Many Car Toys stores are still open under new owners. The old company sold 35 of its roughly 47 stores to five buyers, including longtime employees and regional competitors. The rest closed. The brand continues, but each shop now runs as its own business.
Car Toys said it sold most stores to “tenured employees and trusted local competitors.” Founder Dan Brettler called the case “a less-than-ideal chapter,” according to MyNorthwest.
| Buyer | What they took |
|---|---|
| Foss Audio and Tint | Six Colorado stores, eight of 12 western Washington stores, and the Portland upfitting facility |
| Troy Parcels and Chris Pritts | Eight of 12 Dallas-Fort Worth stores and all four Houston stores |
| Don Longworth and Raul Shakarov | Five of six Oregon stores |
| Drive-In Autosound | Colorado Springs North |
| Selway Sound (Aspen Sound) | Both Spokane, Washington stores |
Court filings name the buying companies a bit differently, including Ride Ready, CTX Operating, and Sound Distributions. Reported prices also vary by source, so treat the total as roughly $12 million to $14 million.
What happened in Colorado
Seven of 10 Colorado stores found buyers. The Boulder, Parker, and Broadway Denver stores closed. The Broadway store had operated in the Broadway Central shopping center since at least 1999.
Say you used the Broadway shop for tint. You cannot go back to that address. The nearest option is a different store with a different owner, so ask about your old work order before you drive over.
Check your own store
The first announcement did not list which stores would close. If you rely on a particular shop, such as one of the locations in Pierce or Thurston County, Washington, call it and ask who owns it now.
What happened to the brand
The Car Toys name lives on. One industry profile says Foss folded its own shops into the Car Toys banner and now runs a chain of roughly 22 stores. Treat that number as a secondary report and confirm it with the company.
See also Bankruptcy Forces Ice Cream Chain to Close 500 Locations
What Is Chapter 11, and Why Sell Stores This Way?
Chapter 11 is a court-supervised process that lets a company reorganize or sell assets while it keeps operating. Car Toys used a Section 363 sale to sell stores as working businesses. Buyers usually pay more for an open store with trained staff than for empty shelves and leftover stock.
The U.S. Courts call Chapter 11 a “reorganization” bankruptcy. In a corporate case, stockholders’ personal assets are generally not at risk beyond their investment in the stock.
Think of a house sold with the furniture in place and the lights on. It brings more than the same house gutted. A Section 363 sale works that way for a business. The statute, 11 U.S.C. § 363, lets a company sell property outside the ordinary course of business only “after notice and a hearing.” A judge has to approve it, which protects buyers and creditors alike.
A related rule, § 363(m), generally protects a good-faith buyer if a sale order is later reversed on appeal, unless the sale was stayed. That is one reason buyers are willing to close these deals.
| Key Difference | Chapter 11 | Chapter 7 |
|---|---|---|
| Who runs things | The company, under court oversight | A court-appointed trustee |
| Main goal | Reorganize or sell | Sell everything and close |
| Does the business keep operating? | Often yes | Usually no |
| In the Car Toys case | Used | Requested by the U.S. Trustee, not granted |
See also American Airlines Bankruptcy
What Was the Court Fight Over Insider Loans?
The fight was about control. Founder Dan Brettler was chairman and CEO and also the company’s main lender. The U.S. Trustee asked to convert the case to Chapter 7, and creditors asked for an independent trustee. A December 2025 settlement resolved both requests.
Imagine the person who runs your club also holds its biggest loan. When the club struggles, who gets paid first, and who decides? That is the worry here. Lending to a company you lead is called insider lending, and courts look at it closely.
Two motions followed. The U.S. Trustee, a Justice Department office that watches bankruptcy cases, asked to convert the case to Chapter 7 under 11 U.S.C. § 1112. It also noted that only about $855,000 was budgeted for professional fees to confirm a plan and questioned whether the estate could afford Chapter 11. The Unsecured Creditors’ Committee asked for a Chapter 11 trustee under 11 U.S.C. § 1104.
The December 2025 settlement gave creditors a say. Brettler picks the Plan Administrator, but from a panel of candidates the Committee proposes. That person also reviews possible claims against company directors and officers.
See also Lugano Diamonds Bankruptcy
What Does the Liquidating Plan Do?
A liquidating plan turns leftover assets into cash and pays creditors in the order the law sets. It does not revive the old company. Stretto’s case page lists Bush Kornfeld LLP as Plan Administrator, who handles the wind-down after the plan takes effect.
Founder Brettler also provided a $500,000 loan, known as DIP (debtor in possession) financing, to carry the case through the sales.
One plan summary says sale proceeds go 80% to Brettler as secured lender and 20% to general unsecured creditors, after administrative and DIP claims are paid. It also says the plan releases claims against him in exchange for limits on his secured claim. That summary comes from a case-tracking site, so check the confirmed plan itself for final terms.
Here is a simple illustration, using made-up numbers and ignoring costs. If $100 were left for that split, $80 would go to the secured lender, and $20 would be shared by every unsecured creditor. An unsecured vendor owed a large bill would receive only a slice of that $20. That is why unsecured creditors often recover pennies on the dollar.
A confirmed plan under 11 U.S.C. § 1129 means the judge approved it and it binds creditors.
What Does It Mean for Customers?
Some customer deadlines have passed. Car Toys said gift cards and deposits were valid only through December 31, 2025, and Groupon offers ended that day. Warranties were to be honored, but each store now has its own owner. Ask your store in writing what it will honor.
The details, from the company’s own restructuring page:
Warranties. The company said its coverage warranty had not changed and would be honored. Some protection plans list a third-party administrator, so read your paperwork first.
Gift cards and deposits. Cards bought before October 1, 2025 were honored only through December 31, 2025. The same date applied to deposits. New owners were to start new gift card programs in January 2026.
Groupon. Car Toys stopped honoring Groupon offers on December 31, 2025.
Installs and repairs. Each shop is now a separate business. Do not assume an old installation guarantee carries over.
Two quick examples show how this plays out. Maria got a $200 gift card in July 2025 and forgot it. The old program ended on December 31, 2025, so she can ask the store that sold it, but nobody has to honor it. If she paid by credit card, her card issuer may be worth a call. Devon’s installed amp fails in 2026. He brings his receipt to a shop and learns it has new owners. The owner tells him whether it covers old work or sends him to a protection-plan administrator.
If you hold something from the old company, follow these steps:
- Find your receipt or order number.
- Call the nearest store.
- Ask who owns it now.
- Ask, in writing, what that owner will honor.
- If you paid by credit card, ask your card issuer about a dispute for unused services.
What About Workers and the WARN Act?
A WARN notice covered 177 Car Toys workers, with separations starting October 20, 2025. Federal WARN law generally requires 60 days’ written notice before a plant closing or mass layoff. Car Toys said most jobs would continue with new owners. Pay and benefit questions depend on each worker’s facts.
The Worker Adjustment and Retraining Notification Act, found at 29 U.S.C. §§ 2101-2109, requires employers to give notice 60 calendar days in advance of covered closings and layoffs. The Department of Labor explains that an employer who breaks the rule can owe each worker back pay and benefits for the period of the violation, up to 60 days. Less notice is allowed in narrow cases, such as a faltering company, unforeseeable business circumstances, or a natural disaster. The federal rules are at 20 CFR Part 639.
Car Toys had WARN history of its own. As noted above, the Wireless Advocates class action ended in a $3.5 million settlement, with Car Toys paying $125,000. Washington also has a state
that took effect on July 27, 2025.
Take Priya, who worked at a store that closed. She keeps her notice letter, checks her final paycheck and accrued time off, and files for unemployment through the Washington Employment Security Department or her own state agency. If the notice looks late, she asks an employment attorney whether a claim is worth bringing.
Vendors and Creditors: How to Check Claims
A claim is a formal request to be paid from the bankruptcy estate, and missing the deadline can reduce or erase your recovery. Check the case docket or Stretto’s case site for exact dates. Stretto listed a case information line at 833.329.2728.
The first meeting of creditors, required by Section 341 of the Bankruptcy Code, was held by phone on September 17, 2025, and continued on October 8. Creditors who want mailed notices can file a Request for Special Notice, a form Stretto posted on the case site. Claim deadlines appear on the docket and in the court’s orders.
Suppliers should also know 11 U.S.C. § 503(b)(9). It can give special priority to goods received by a company in the 20 days before it filed. A parts supplier that shipped $15,000 of stereo equipment a couple of weeks before August 18, 2025 might qualify. It would need to act before the claims deadline, so it should call a bankruptcy attorney right away.
Common Mistakes to Avoid
The first mistake is treating the brand and the company as the same. The old company is being wound down. Separate owners run today’s stores.
The second is waiting on a gift card, deposit, or warranty. Deadlines in bankruptcy are firm, and several passed on December 31, 2025.
The third is missing a claim deadline. Courts rarely excuse that, and it can cost you the right to be paid.
Frequently Asked Questions
Did Car Toys go out of business?
The old company is being wound down. The Car Toys brand and most stores continue under new owners.
When did Car Toys file for bankruptcy?
August 18, 2025, in the U.S. Bankruptcy Court for the Western District of Washington. The case number is 25-12288.
Why did Car Toys go bankrupt?
Sales fell for years as new cars came with built-in audio. The 2022 shutdown of Wireless Advocates and heavy debt added pressure.
Who bought the Car Toys stores?
Five buyers, including Foss Audio and Tint, Drive-In Autosound, and Selway Sound, plus longtime employees who bought in Texas and Oregon.
Can I still use my old Car Toys gift card?
Cards bought before October 1, 2025 were honored only through December 31, 2025. Ask the store about any newer program.
Are the new owners responsible for Car Toys’ old debts?
Usually not. A court-approved sale under Section 363 can pass assets to a buyer free of certain claims when the statute’s conditions are met. The exact terms come from each sale order, so a creditor should read them or ask an attorney.
Did Car Toys workers get paid?
A WARN notice covered 177 workers. Pay and benefit questions depend on each worker’s facts, so contact an employment attorney or your state labor agency.
How do I check the Car Toys bankruptcy case?
Search case number 25-12288 on the Stretto case site or in federal court records.
Conclusion
The Car Toys bankruptcies show how a long-running retailer can fail even when its brand survives. A shrinking market, a sister-company collapse, and heavy debt pushed the company into Chapter 11. A sale-based case saved most of the stores, and a liquidating plan wound down the rest.
If you hold a claim, a warranty, a deposit, or a job-related question, act soon. Talk to a licensed bankruptcy or employment attorney in your state before you rely on any deadline in this article. Rules and dates depend on your facts.
This article is general legal information, not legal advice. Bankruptcy outcomes depend on specific facts and court orders.
