Posted on 06/03/2018 5:07:49 AM PDT by C19fan
oys 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.
(Excerpt) Read more at msn.com ...
They at least get to see those bonuses on paper until the trustee takes them back to pay on debt.
Well, if there is nothing there, there’s nothing to get.
They do however, have a 4th priority claim (507(a)(4)(A)) for wages 1)earned in the last 180 days with 2) a cap of $10,000. Unpaid wages over that are general unsecured claims.
“The WARN Act does not apply to a trustee in bankruptcy whose sole function is to close the business.”
-Wiki
What they feel they deserve and what they are legally entitled to are two different things.
However I do see their point about execs getting paid off just before they went belly up, I suspect they are expecting fair play in that if the execs get something, so should they. From this perspective, I would be quite PO’d too.
It’s like the execs got bonuses for making bad decisions that led to the employees layoffs.
Yes, but those arrangements should be brought before the bankruptcy court for approval after filing.
Bottom line, however, is that I don't have enough information to opine as to whether anything improper occurred, or not.
Funny...the reason we stopped shopping there was because of the rude, horrible, unhelpful employees.
How much do they wish for per year they work?
Scummy or not, the bonuses are likely contractual obligations. PO’ed employees should find more constructive ways to channel their anger, like looking for another job.
Any idea when they are actually closing?
Seems there was no interest in giving large enough discounts very quickly. Otherwise customers could turn around and sell something on eBay for a profit. Goal to get the most for creditors?
The three vulture capitalist owners of Toys’s R Us who bought the company, extracted the cash, and loaded it up with debt were Bain Capital, Vornado Realty Trust, and KKR. All are headed by executives who are significant six figure contributors to Republican PACs and candidates. This may be another reason the Democrat politicians are vocal about this bankruptcy.
Bain and KKR are private equity companies. They are in the business of buying companies and stripping their assets. Private equity firms played a big role in the deindustrialization of the US over the last 30 years, closing factories, outsourcing production, laying off millions of middle class employees, and enriching the managing partners of the firms. The managing partners contribute heavily to the politicians who write the laws than enable them to strip companies of their assets. These politicians also preserve the “carried interest” tax loophole that allows the managing partners to avoid paying high income taxes on their millions of dollars in annual compensation. Trump frequently talked about eliminating carried interest during the campaign but it was preserved in the recent tax bill and since being election Trump has been silent on the issue.
In politics and business, follow the money. The crony capitalists have big money, pay it out to politicians, and reap the benefits. If you believe the GOP is looking after the little guy, read below:
Bain Capital - Mitt Romey’s former company. John Connaughton, Co-Managing Partner (there is no CEO today) was a big donor to Romney’s presidential campaign and Scott Brown’s Senate campaign.
Vornado Realty Trust - Buyer of Kennedy family real estate properties. Steven Roth, Chairman of Vornado, gave $250,000 to the Trump campaign in 2016.
KKR - Run by Henry Kravis. Big donor to RNC, GOP Senators, and GOP Congressmen. He gave $50,000 to Team Ryan in 2016 and $334,000 to the RNC. He gave to John McCain, Lisa Murkowski, Roy Blunt, Chuck Grassley.
The executives would have bailed without extra compensation. The new money wants them to stay.
“Bottom line, however, is that I don’t have enough information to opine as to whether anything improper occurred, or not.”
I have experience with a number of retail bankruptcies as a creditor. Based on my experience the attorneys and accountants working for the creditors are extremely good at extracting every penny out of the carcass of the company. If anything improper took place before the bankruptcy was filed, or during the bankruptcy process, they will discover it and provide the information to the bankruptcy judge and the appropriate prosecutor.
The judge overseeing a bankruptcy of this size likely has plenty of experience and is tough as nails. Bankruptcy judges aren’t politicized, they focus on shutting the firm down efficiently and protecting the assets for the creditors as provided for in the law. The politicians making noise know the process will be fair and governed by the laws they wrote. If the politicians don’t like the rules governing payments to workers and executives, they have only themselves to blame.
Sounds like what happened to me. We all got together and hired a bankruptcy attorney and he got us half our severance plus the money we spent hiring him.
When the chain was alive Toys R Us employees believed they deserved to be able to ignore customers looking for help without being fired.
Today they believe they deserve severance pay after the entire chain has folded.
Intertwined aspects of the situation.
Cue the tiny violins.
“Anyone working for Toys R Us should have been making plans to get out as soon as the company’s problems became pretty well known years ago.”
And go where?
Or supporting candidates like Bernie Sanders. He understands their anger.
Between Bain, KKR and company executives it was a Vampire feast! You can only drain blood from your victim for so long before you kill it.
As far as all the bitching about the service, America switched to the Customer NO SERVICE model long ago and replaced it with bare bones pricing, Most places can’t even be bothered to take your money any more so you ring yourself up and handle the payment for them. I doubt they is a FReeper on here that can claim even 10% of the business they conduct transactions have more that a barely acceptable Costumer Service level.
As far as poor service by front line employees there is plenty of blame to go around. First there’s Management (The one’s getting the big bonuses)they no longer lead they are a lot like parents now days they want to be friends with front line no lead not mentor friends. Its they who no long stress Customer Service the front line are mostly product movers, keep the stuff moving from the back to the front and in dwindling cases take their money and that’s it. And as little customer interaction as possible that cuts down on the on the chances of a faux pas that hits the news of social media.
Here’s your Legos now, go build a better life...
Executive bonus probably taken back by trustee. As for employee severance looks as if the d.emocrats are trying to find another identity group for political purposes and a law to push.
I didn’t do much retail - mostly real estate developers and ag. So I’ll yield to you on retail. By the time we got down to spending a dollar to collect 3 dollars, we started looking at things pretty closely to maker sure it was worth keeping up the effort.
On the other hand, if someone was willing to fight, there must be something there worth fighting over.
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