Private equity firms KKR and Bain Capital, and real estate firm Vornado Realty Trust last year took retailer Toys “R” Us into bankruptcy. The retailer recently announced it is liquidating, closing all of its stores and laying off its 33,000 employees.
On March 15 Toys “R” Us sent a letter to employees informing them that their employment will be terminated and that the company will not be paying severance. Meanwhile, Bloomberg reported last year that KKR, Bain Capital, and Vornado collected more than $470 million in fees and interest payments from Toys “R” Us over the last several years.
On April 23, ten Toys “R” Us employees from around the US sent a letter to KKR, Bain Capital, and Vornado asking them to pay severance to Toys “R” Us workers out of the $470 million in fees and interest that they took from Toys “R” Us. From the letter:
“We love our jobs and have devoted years of our lives serving Toy R Us and Toy R Us’ customers. Some of us have worked at Toy R Us for decades.
We recently learned that Toys R Us will not be not be paying severance to its employees.
We also learned that your companies, Bain Capital, Kohlberg Kravis Roberts, and Vornado Realty Trust, which were responsible for piling on the billions of dollars in debt that drove Toys R Us into bankruptcy, took more than $470 million in fees and interest payments from Toy R Us over the last several years. Taking hundreds of millions of dollars from Toy R Us and then refusing to pay severance to employees is a disgrace.
The $470 million that Bain Capital, Kohlberg Kravis Roberts, and Vornado Realty Trust took from Toys R Us works out to more than $15,000 per worker – more than enough to pay severance that will provide support to employees’ families as they look for new jobs.”
Full text of the letter is below. A copy of the letter is available here (link).
In addition, more than 50,000 Toys “R” Us employees and their supporters signed a petition calling on KKR, Bain Capital, and Vornado to use the $470 million in fees and interest they collected from Toys “R” Us to pay severance to laid off
KKR, Bain Capital, and Vornado have not yet responded to Toys “R” Us employees’ request.