Lawmakers send questions to Toys 'R' Us PE backers over retailer's failure.
Nineteen members of Congress, including Senator Bernie Sanders, sent a letter to the heads of KKR (KKR), Bain Capital, and Vornado Realty Trust (VNO), all private equity backers of Toys 'R' Us, questioning their roles in the company's bankruptcy and criticizing leveraged buyouts. In the letter, the members of Congress expressed their support for Toys 'R' Us workers, noting that leveraged buyouts often result in "mass job loss, closure of profitable businesses, and unnecessary financial burdens for local government." According to the letter, such buyouts "harm communities, while investment managers walk away with significant gains." The members of Congress expressed concerns that the investment firms "deliberately" chose to leave Toys 'R' Us workers "with nothing" and requested responses from the firms to a number of questions. The questions were about whether changing the toy retailer's capital structure to 78% debt was deliberate, what services, if any, were provided by the firms, whether the firms plan to offer immediate severance pay to all Toys 'R' Us workers, and whether any individual associated with any firms was involved in the layoff decision. The letter requests "prompt" attention to such inquiries, noting the Representatives and Senator "would appreciate" a response by no later than July 15. [Reference Link]:[http://online.wsj.com/public/resources/documents/toysrusletter_0706.pdf?mod=article_inline]
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|Date:||Jul 6, 2018|
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