‘I Urge You to Reconsider:’ Elizabeth Warren Pushes Toys ‘R’ Us to Give Laid-Off Employees Some Serious Severance
Senator Elizabeth Warren is not pleased with the role key Toys “R” Us investors played in the company’s implosion and, as they consider reviving the brand, she’s asking what they plan to do for the employees laid off in the shutdown.
“I write to express deep concern about your companies’ roles in the liquidation of Toys ‘R’ Us, which resulted in more than 30,000 American workers losing their jobs without severance,” Warren wrote.
Warren, who sits on the Senate Health, Education, Labor, and Pensions committee, noted in her letter that the bankrupt retailer had a buyout offer earlier this year that would have kept almost half the U.S. stores open. It also noted that the more than 30,000 workers terminated in the bankruptcy would have been paid around $75 million in severance under previous leadership, but that the investors have only put $20 million into an employee hardship fund so far.
Senators can open investigations that can make life difficult for companies. As a first step, they often send letters asking for answers. In her letter, Warren asked investors, Solus Alternative Asset Management, Angelo Gordon & Co., Franklin Mutual Advisors, Highland Capital and Oaktree Capital to explain whether they would add to the hardship pot—KKR and Bain Capital already have—and why they chose to ignore the potential buyout option. Toys “R” Us filed for bankruptcy in 2017.
The funds themselves may have no legal obligation to pay into the severance fund but former employees have been campaigning for better compensation since the investors took over the companies remaining assets in April. “I urge you to reconsider,” Warren wrote.
“KKR and Bain have already committed $10 million a piece,” former Toys “R” Us employee Anne Marie Reinhart told the Wall Street Journal. “If we could get others on board like Solus and the other hedge funds, it would really help us all out.”