Why did Toys R Us shut down?
Competition from Amazon and corporate mismanagement were only two of the factors leading to Toys R Us’ decline. Toys R Us was and continues to be a Wall Street-made disaster. Toys R Us filed for bankruptcy in September 2017 because of the unsustainable $5-billion debt that Wall Street private equity companies loaded on Toys R Us when they bought it in 2005. And what pushed Toys R Us over the edge was a small group of five Wall Street hedge funds (Solus Alternative Asset Management, Angelo Gordon & Co., Franklin Templeton, Highland Capital and Oaktree Capital) that bought up Toys R Us debt while the company was struggling and effectively became the “owners” of Toys R Us during bankruptcy. These hedge funds, led by Solus, forced Toys R Us into liquidation, closing 800 stores and laying off 33,000 working people, all in the name of turning a profit on their “investments”.
But aren’t they bringing back Geoffrey and opening Geoffrey’s Toy Box?
The same hedge funds that turned down viable options to keep Toys R Us alive and chose liquidation are now saying that they’re trying to “revive” Toys R Us and Geoffrey is “back from vacation.” The truth is these Wall Street companies are trying to profit off of the Toys R Us brand and the hard work of the 33,000 employees that made Toys R Us what it was. They filed an application for trademark for Geoffrey’s Toy Box on June 20, 2018, nine days before Toys R Us employees closed all Toys R Us stores and tens of thousands were thrown out of their jobs without severance. We are continuing to call on all corporations that caused the downfall of Toys R Us and harm to our families to contribute to the Toys R Us family fund.
What is the Toys R Us family fund?
KKR and Bain Capital, two of the three former owners of Toys R Us, are talking to us about contributing money to a new fund being created to help Toys R Us employees get back on our feet. A third owner, a NYC-based real estate developer Vornado Realty Trust, as well as Solus, Angelo Gordon, and other hedge funds that drove Toys R Us into the ground, have refused to take responsibility and contribute to the fund.
Why do Toys R Us worker say they’re owed severance pay?
Toys R Us had a decades-long severance plan that compensated employees who were impacted by store closures and layoffs. Employees said they were promised severance pay when the first wave of store closures were announced in January 2018 while the company was in Chapter 11 bankruptcy. But the plan was scrapped just before the announcement of liquidation in March 2018. It is estimated that 33,000 people are owed more than $75 million in severance.
Did former employees take any legal actions in the bankruptcy court?
Ann Marie Reinhardt Smith, a 30-year employee of Toys R Us and a leader in Rise Up Retail, filed a class-action legal claim for severance pay on behalf of 33,000 others in bankruptcy court. It is no secret, unfortunately, that U.S. bankruptcy laws are rigged to protect the interests of corporate owners, banks and wealthy lenders like Solus and Angelo Gordon instead of working people. If Toys R Us employees get anything at all, it will be pennies compared to the severance we are owed. Until bankruptcy laws are changed – and they need to be – to protect working families first, we have to continue our efforts outside of a broken legal process to hold these companies accountable for the financial hardship they caused tens of thousands of families.
What can I do to help?
Join our movement! Former Toys R Us employees have come together to speak out and share our stories. In a few months, we have held protests in our stores and on Wall Street to bring attention to the plight of working families across the country at the hands of Wall Street greed. We have met with and gotten the support of elected leaders, including Senator Bernie Sanders, Senator Cory Booker, Senator Elizabeth Warren, and 19 members of the Congressional Progressive Caucus. And we are not stopping until Vornado, Solus, Angelo Gordon and other hedge funds take their responsibility for the financial ruins of 33,000 families. Join us today.