business news in context, analysis with attitude

The Financial Times reports that former Toys R Us employees who lost their jobs when the retailer went belly up have reached out to the three private equity groups that owned it, hoping for some sort of hardship fund that could help them out financially.

The story says that two of the funds - KKR and Bain - are “considering providing some financial help for workers who were hardest hit by the toy chain’s bankruptcy last year and ultimate liquidation. Criticism over the treatment of workers has led some public pension funds in the US to reconsider investments with the two firms.”

But the third, Vornado, “has shunned discussions with representatives of former employees, according to people familiar with the talks,” though “Vornado is structured as a permanent capital vehicle and does not raise outside money on a regular schedule, so has not experienced the same pressure from investors.”

The FT story notes that “former employees are trying to enforce their claims against the retailer in bankruptcy court. But they are unlikely to have any legal recourse against the trio of former owners, whom they contend are also to blame. Instead, they have mounted a ferocious campaign of public criticism, and worked to apply pressure via the buyout funds’ investors.”
KC's View:
It’d be nice … and appropriate - for the money folks to provide some financial relief to workers/victims. Normally it is just the creditors and the top execs who get consideration. Not only would this be good for these employees, but maybe it would set a nice precedent for the future.