January 14th, 2004, just before 9 a.m. Pittsfield, Massachusetts. A KB Toys employee turns off West Street

and into the parking lot of the company's headquarters. She's late, held up by the snow

piled up in her driveway.

She pulls into a spare space and races toward the entrance of K.B's three-story head office.

She senses something's wrong immediately. There's no one at reception. She heads down the

corridor. The place is like a ghost town. Then she hears talking and it's coming

from the cafeteria. She heads in.

The place is packed.

Everyone's assembled, and it's standing room only.

She squeezes into a space next to a colleague who's lined up against the wall.

What's going on?

Not sure yet. They just called us in.

You think today's the day?

The man doesn't reply, but he knows what she's talking about.

Rumors have swirled around the office for months that KB is about to go bankrupt.

And that was before Walmart's all-out price war during the holidays.

A hush descends as CEO Michael Glazer

walks through the cafeteria and clambers onto one of the tables. Glazer's a

playful guy who keeps an arcade racing game in his office.

He's led KB for eight years and helped engineer the deal with Bain Capital that took the business

private.

But he's not smiling today.

...