‘How can they walk away with millions and leave workers with zero?’

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Addie
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‘How can they walk away with millions and leave workers with zero?’

#1

Post by Addie » Sat Jun 02, 2018 4:22 pm

WaPo
‘How can they walk away with millions and leave workers with zero?’: Toys R Us workers say they deserve severance

Toys R Us isn’t paying severance to its 30,000 workers who will lose their jobs as the retailer shuts down, even though it doled out millions in executive bonuses a week before it filed for bankruptcy. Now, some workers are calling on lawmakers to create new rules that would require bankrupt companies backed by private-equity firms to provide compensation to their workers.

On Friday, more than a dozen workers met with lawmakers in New Jersey, where Toys R Us is based, to push for severance pay. Workers also called for new regulations on leveraged buyouts, as well as windfall taxes that would prevent private-equity firms from running a business into the ground and then walking away with huge sums of money.

In addition to meeting with lawmakers, employees are preparing to file a claim in bankruptcy court next week asking that they be fairly compensated, according to workers’ advocates at the Center for Popular Democracy.

“This is the story of a company — one of the most iconic in America — that was saddled with so much debt that it could not succeed,” Sen. Cory Booker (D-N.J.) said at a Friday event in the parking lot of a Toys R Us in Totowa, N.J. “And now the big guys are walking away and the workers are left with nothing.”

Much of Toys R Us’s troubles, employees say, date to a 2005 leveraged buyout in which its new owners — private-equity firms Kohlberg Kravis Roberts and Bain Capital, and real estate firm Vornado Realty Trust — loaded the company with more than $5 billion in debt. The company filed for bankruptcy last year, citing $7.9 billion in debt against $6.6 billion in assets, and announced in March that it would close all 800 of its U.S. stores.


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Slim Cognito
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Re: ‘How can they walk away with millions and leave workers with zero?’

#2

Post by Slim Cognito » Sat Jun 02, 2018 5:29 pm

Our daughter worked at one of their warehouses in Kansas City. She was able to find another job, but she's pretty PO'd about the bigwigs getting huge bonuses while their severance taken away. Apparently they had been (verbally) promised one, then it was taken away.


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Bill_G
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Re: ‘How can they walk away with millions and leave workers with zero?’

#3

Post by Bill_G » Sat Jun 02, 2018 6:16 pm

With 30k people, the numbers stack up quickly when you talk about a meaningful severance. The vulture capitalists did what they do best - they eviscerated the beast, and left little carrion behind.



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Dan1100
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Re: ‘How can they walk away with millions and leave workers with zero?’

#4

Post by Dan1100 » Sat Jun 02, 2018 6:21 pm

I am far from an expert in bankruptcy, but putting the fairness to the employees to the side, it seems to me that giving bonuses to the executives is stealing money from the creditors.

The term "preferential transfer" sticks in my head. Maybe they jumped through whatever hoops and loopholes they needed to jump through, but if I was one of the creditors I'd be wanting to claw back those bonuses and get paid more of what I am owed.


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Suranis
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Re: ‘How can they walk away with millions and leave workers with zero?’

#5

Post by Suranis » Sat Jun 02, 2018 6:46 pm

Ah, they are acting Presidentially. After all, its what W and T did.


Irony can be pretty ironic sometimes.

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