Former Toys ‘R’ Us workers finally received some good news.
“The private-equity owners of Toys “R” Us Inc. are putting together a $20 million fund to make payments to thousands of former employees left jobless by the retailer’s liquidation, according to people familiar with the matter.
The fund’s creation by Bain Capital and KKR & Co. is an unusual move by private-equity owners of a bankrupt company. It isn’t required under bankruptcy law and has no ties to the bankruptcy process, the people said. The funding will be provided by the buyout firms’ general partners, they added.
The two private-equity firms have brought on a third party to help structure the fund and iron out the eligibility requirements, the people said. It is unknown what the median payout will be and the fund will be open to outside contributions, they added.
Bain, KKR and real-estate investment trust Vornado Realty Trust took Toys “R” Us private in 2005 in a $6.6 billion deal that included $5.3 billion in debt. When Toys “R” Us sought bankruptcy protection last year, much of its debt stemmed from the buyout.
Representatives of Bain and KKR declined to comment.
Although the retailer had hoped to survive bankruptcy, it said in March that it was shutting down, a move that resulted in the closure of more than 800 U.S. stores and the loss of 33,000 jobs.”
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