Ex-Toys R Us Employees Getting $20M In Financial Assistance

WAYNE, NJ — A $20 million financial assistance fund has been set up to help thousands of former Toys R Us employees who were laid off as part of the company's bankruptcy proceedings earlier this year.

KKR and Bain Captial, two former owners of Toys R Us, former employees, and the Organization United for Respect created The TRU Financial Assistance Fund Nov. 20, a website for the fund stated.

Former Toys R Us employees who lost their jobs as a result of the Wayne-based company's bankruptcy filing are eligible to receive money from the fund.

New Jersey's two senators, Cory Booker and Robert Menendez, and Rep. Bill Pascrell Jr., of the 9th District, in June met outside of the Toys R Us store on Route 46 in Totowa and demanded fair severance pay for Toys R Us' 33,000 workers as the company began winding down U.S. operations at its 725 U.S. stores and selling off assets.

Photo: Rep. Bill Pascrell (NJ-09), Sens. Cory Booker and Bob Menendez, and Toys R Us workers stand outside of the business' Totowa store on Route 46 demanding severance pay for 33,000 employees. (Courtesy of Rep. Bill Pascrell)

Booker, Menendez, and Pascrell issued a joint statement upon learning of the severance fund's creation.

"This financial assistance fund will provide workers who lost their jobs through no fault of their own a better chance to provide for their families, stay in their homes, and rebuild their lives," the statement said. "We are hopeful that the fund administrator and former employees will continue to work together to ensure robust funding and a transparent and equitable process for this fund moving forward.”

Originally, none of those workers were slated to get any type of severance pay even after a federal bankruptcy judge ruled late last year that Toys R Us may pay 17 executives about $14 million in incentive bonuses if it hits a certain earnings amount.

More than 11,000 people signed a petition stating that employees deserve severance pay following the company's bankruptcy announcement in March.

CEO David Brandon and four other executives shared $8.7 million in retention bonuses.

Toys R Us had more than $5 billion in debt and was forced into bankruptcy following a leveraged buyout.

The bankruptcy filing came amid slumping sales and mounting debt, which grew to about $5 billion, although Toys R Us announced at the time that the "vast majority" of its 1,600 worldwide locations were profitable.

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

Isaac Larian, the billionaire CEO of MGA Entertainment, tried to save the once-dominant retailer, but said recently that he was unable to reach an agreement with Toys R Us' lenders, CNNMoney reported.

Related:

• Toymakers Launch Last-Ditch Effort To Save Toys R Us
• Toys R US CEO Pocketed $2.8M Bonus
• Toys R Us Files Chapter 11 Bankruptcy, Outlines Strategy
• Toys R Us Closing Is The End Of An Era
• Toys R Us Files Chapter 11 Bankruptcy, Outlines Strategy
• Charles Lazarus, Toys R Us Founder, Dies At 94
• Toys R Us Workers Start Severance Pay Petition

Email: daniel.hubbard@patch.com

Patch file photo of a former Toys R Us store