Bankrupt Toys R Us Can Pay Executives $14M In Bonuses: Report

WAYNE, NJ — Bankrupt Toys R Us can pay 17 executives about $14 million in incentive bonuses if it hits a certain earnings amount, a bankruptcy judge ruled Tuesday.

Toys R Us, headquartered in Wayne employs about 64,000 people and has 1,600 stores worldwide. It filed for Chapter 11 bankruptcy in September with plans to restructure $5 billion in long-term debt.

Attorneys representing the company argued that the bonuses would help executives focus on increasing sales during the holiday season.

“Timing, of course, is everything,” they wrote in a Nov. 14 filing, The Washington Post reported. “Now more than ever the senior management team must be properly motivated and incentivized to handle the panoply of responsibilities attendant to their two full-time jobs of leading the Debtors through this restructuring and, at the same time, implementing a worldwide strategy to increase sales following a near shut-down of operations just eight short weeks ago. The task at hand cannot be underestimated.”

A Justice Department attorney representing creditors' interests objected that the bonuses are excessive, according to the report.

The once-dominant retailer has struggled to compete with online retail giant Amazon and stores like Walmart, The New York Times reported

Toys R Us had a $400 million debt payment due next year and was "burning through cash," the Times reported, and hired law firm Kirkland & Ellis to devise a strategy moving forward.

Toys R Us plans to invest $277 million from next year to 2021 to convert current locations into side-by-side storefronts dedicated to toys and its Babies R Us brand, USA Today previously reported.

Related: Toys R Us Files Chapter 11 Bankruptcy, Outlines Strategy

Email daniel.hubbard@patch.com. Get Patch breaking news alerts sent right to your phone with our new app. Download here.

Patch file photo