About this Deal
|Two of the former owners of Toys 'R' Us agreed to pay $20 million severance to help the laid-off employees. When the toy store went out of business in March, the 31,000 remaining employees did not get severance payments. Meanwhile, top executives received bonuses during the bankruptcy process.|
Bankruptcy laws place limits on the severance payments that can be made to laid-off employees, and they give priority to paying back creditors. Had they been laid off before the bankruptcy, they would have been entitled to severance pay of up to one week of pay for every year of service.
The $20 million severance fund does not come from Toys 'R' Us. This fund was set up following negotiations between private equity firms and various public interest groups.
Want to know more? Read the article at CNN.