By Sahid Fawaz
Workers who lost their jobs at America’s iconic toy store are finding no love from lenders.
“The private equity owners of Toys ‘R’ Us may be taking unprecedented steps toward supporting the company’s former workers, but the lenders that financed its bankruptcy — and ultimate liquidation — are making no such promises.
Angelo Gordon & Co. and Solus Alternative Asset Management don’t plan to contribute any more cash to benefit Toys ‘R’ Us employees who were left jobless when the biggest U.S. toy retail chain shut down, according to an Aug. 21 letter reviewed by Bloomberg. The letter from lawyers at Wachtell, Lipton, Rosen & Katz came in response to two worker advocacy groups who asked the hedge funds last month ‘to take responsibility by ensuring that Toys ‘R’ Us employees receive the money that they had been counting on.’
While they recognize the hardship for the workers, Angelo Gordon and Solus didn’t cause the company’s domestic collapse, according to lawyers at Wachtell, Lipton, Rosen & Katz. ‘Accordingly, we do not believe there is a sound basis to claim that Toys ‘R’ Us secured lenders should make additional financial contributions for the benefit of employees or other unsecured lenders,’ Wachtell’s Joshua Feltman and Emil Kleinhaus wrote.”
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