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Toys R Us workers say they deserve severance [tr]
Washington Post ^ | June 2, 2018 | Abha Bhattarai

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 ...


TOPICS: Business/Economy
KEYWORDS: equity; retail; toysrus
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Vampire capitalism.
1 posted on 06/03/2018 5:07:50 AM PDT by C19fan
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To: C19fan

Display of ignorance regarding how companies get funds to pay salaries.


2 posted on 06/03/2018 5:10:59 AM PDT by Raycpa
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To: C19fan

If they did indeed pay millions in executive bonuses weeks before filing bankruptcy, those preferential payments will likely be clawed back by the trustee. But the money will go to creditors, not ex-employees.


3 posted on 06/03/2018 5:12:13 AM PDT by Oldeconomybuyer (The problem with socialism is that you eventually run out of other people's money.)
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To: C19fan

It is possible that the bonus payments, right before and in knowledge of bankruptcy declaration, should be considered a fraudulent conveyance, and can be clawed back.

Who gets them is another story.

IIRC the normal order of payments priority, short-term creditors get paid first... that is, earned back wages, vendors. Then secured lenders. There won’t be anything left for the stockholders, or at most crumbs.

A severance is not an earned obligation—it’s a kind of employee bonus. It would come at the expense of the other creditors. I don’t think it should happen.

In any event, a few management bonuses spread out over thousands of workers wouldn’t amount to much. It’s the insult that’s got everyone up in arms.


4 posted on 06/03/2018 5:13:03 AM PDT by Pearls Before Swine ("Married with children.")
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To: Raycpa

Hourly wages and exec salaries and bonuses come from different sources?

I haven’t looked at the details, but, no matter how you slice it, this looks really scummy. But not surprising. I’ve seen similar things in my career.


5 posted on 06/03/2018 5:14:04 AM PDT by ProtectOurFreedom
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To: C19fan

Most employees of bankrupt companies are lucky to get their final paychecks, let alone severance.


6 posted on 06/03/2018 5:15:15 AM PDT by yuleeyahoo (Those are my principles, and if you do not like them...well I have others. - Groucho Marx)
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To: C19fan

Signs posted In window 35 to 50% off all inventory, go inside 5 to 10 percent, all baby items car seats carriages etc 10 percent above walmart and target, same with pier one exports


7 posted on 06/03/2018 5:17:39 AM PDT by ronnie raygun
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To: C19fan

8 posted on 06/03/2018 5:20:23 AM PDT by P.O.E. (Pray for America)
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To: C19fan

Stock holders get a small return on bad investments.

Former empoyees are entitled to nothing.


9 posted on 06/03/2018 5:20:49 AM PDT by bert ((K.E. N.P. N.C. +12 ..... Greetings Jacques. The revolution is coming))
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To: yuleeyahoo
Most employees of bankrupt companies are lucky to get their final paychecks, let alone severance.

Yet the executives who bankrupted the company still get their bonuses.

This is how revolutions start.

10 posted on 06/03/2018 5:26:48 AM PDT by Drew68
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To: Raycpa
Display of ignorance regarding how companies get funds to pay salaries.

How did the bonuses get paid?

11 posted on 06/03/2018 5:27:21 AM PDT by Drew68
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To: Oldeconomybuyer

Tha\t depends on whether or not they provided timely WARN act notice


12 posted on 06/03/2018 5:27:37 AM PDT by NY.SS-Bar9 (Those that vote for a living outnumber those that work for one.)
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To: Pearls Before Swine
It's not like these people were owed back pay and didn't get it. 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.

There's a reason why this story is making national news. The company is headquartered in New Jersey, and several members of the state's Congressional delegation are making political hay out of it. The idea that these laid-off workers have anything to complain about is laughable when you have a national unemployment rate below 4% and employers are desperate to find good help. But this is New Jersey we're talking about ... and the state is a fiscal disaster that employers are fleeing in droves.

13 posted on 06/03/2018 5:32:01 AM PDT by Alberta's Child ("I saw a werewolf drinking a pina colada at Trader Vic's.")
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To: C19fan

One of my young relatives has worked for them for a year.


14 posted on 06/03/2018 5:33:06 AM PDT by Ciexyz (I have one issue and it's my economic well-being.)
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To: bert
Former empoyees are entitled to nothing.

I would agree if that would apply to management employees too. Unfortunately management employees will likely receive severance packages equating to salary continuation for a period of time........while the hourly receive nothing.

15 posted on 06/03/2018 5:35:39 AM PDT by Hot Tabasco (Mother nature is a serial killer......)
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To: C19fan

Can’t tell from the article, but the executive bonuses may be completion bonuses. An extra $20k or so if they stay with the company until it’s wound down. Keeps them from accepting new jobs before all the loose ends are tied up.


16 posted on 06/03/2018 5:41:38 AM PDT by Lonesome in Massachussets (Psephomancers for Hillary!)
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To: Hot Tabasco

Management are likely stock holders


17 posted on 06/03/2018 5:41:40 AM PDT by bert ((K.E. N.P. N.C. +12 ..... Greetings Jacques. The revolution is coming))
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To: C19fan
Last year, Toys R Us awarded executives $8 million in bonuses a week before filing for bankruptcy. A few months later, the company got approval from a bankruptcy judge to pay up to $21 million in additional bonuses to executives if they met certain performance goals. (That money was never awarded because the company’s performance fell short.)

So in reality executives got 8 million worth of bonuses.

Bonuses equal out to about $240.00 per employee for a severance compensation. Bonuses are also taxed at the highest tax bracket, even for peons, so they wind up with about $150.00 bonus.

Cory Booker spends that much for his male hookers each night

Much adu about nothing...

18 posted on 06/03/2018 5:42:23 AM PDT by Popman (Wisdom is not what you know about the world but how well you know God.)
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To: C19fan

Full time employees are entitled to state unemployment compensation. Part time employees may not be entitled to unemployment compensation, it depends on state law and/or hours worked per week.

Executive severance payments and termination bonuses may be based on an employment contract with the company. Sometimes executive contracts provide bonus payments for specific executives to work through the bankruptcy process in order to facilitate an orderly discontinuation of business. Having the CFO, and a few other key operating executives in place to the end may save the bondholders and creditors substantially more money than the continuation bonus payments.

Workers are under a collective bargaining agreement may also be entitled to company payments if provided for in the agreement. Workers employed “at will” are entitled to nothing other than wages for actual hours worked.

It is also possible the executive bonuses were earned in 2017 and paid in 2018 just before the bankruptcy filing. If so the payouts were not an executive “windfall”, they were payments of past compensation earned.

If the executive bonuses were extraordinary one time payments, authorized and paid knowing a bankruptcy filing was imminent, there will be litigation by the creditors and the payments will almost certainly be clawed back by the courts. The banks, the investment firms holding the bonds, and suppliers owed money for goods have teams of lawyers and accountants pouring over the books and assets. Improper payments to management will be an item they will explore and challenge in bankruptcy court.


19 posted on 06/03/2018 5:47:32 AM PDT by Soul of the South (The past is gone and cannot be changed. Tomorrow can be a better day if we work on it.)
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To: C19fan

CAPITALIST: - You’ve got some wealth. Now I want to figure out how I can earn some of my own.

SOCIALIST: You’ve got some wealth. Now I want to figure out how to make you give it to me.


20 posted on 06/03/2018 5:48:17 AM PDT by Vlad The Inhaler (The only trannie I want to see is a Muncie 4 Speed M-22 Rock Crusher)
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