Toys ‘R’ Us bankruptcy lawyers to receive $56 million in fees while tens of thousands of laid-off workers will get just $60 severance pay each
- 33,000 Toys ‘R’ Us workers are set to split a $2 million severance package
- A Virginia judge approved a settlement for all the employees who were laid off
- The class action lawsuit was filed by a 30-year veteran of the company
- Each worker will get about $60, while the law firm is due to receive $56m in fees
One year after the famous toy chain Toys ‘R’ Us closed, tens of thousands of staff who were laid off are to receive a portion of the severance money that was promised but then rescinded.
Workers at the company will be splitting $2 million between them. The sum is paltry compared to $56 million in fees awarded to Kirkland & Ellis, the law firm representing Toys ‘R’ Us.
A bankruptcy judge on Thursday approved the settlement to a class-action lawsuit filed on behalf of 33,000 former Toys ‘R’ Us workers which will see each of them receive about $60.
33,000 Toys ‘R’ Us workers are set to receive a $2 million severance package
Each worker will get about $60, while the law firm is due to receive $56million in fees
‘That’ll pay my phone bill,’ said Michelle Perez, who worked as a supervisor at a Toys ‘R’ Us store in Portland, Oregon, said to CBS News.
‘This has really shown how the bankruptcy system is broken. It’s taken us a year and we’re making pennies on the dollar,’ added Perez.
‘Employees should be taken care of first, a lot of employees had been there 30 years,’ said Perez, a 29-year-old mother of two. ‘It shows how little employees are valued. Many of us still don’t have jobs.’
Judge Keith Philips of the Eastern District of Virginia awarded the $2 million to workers that were told they would receive severance at the start of the bankruptcy as part of a benefit package that was then voided during the legal proceedings.
A Virginia judge approved a settlement for all the employees who were laid off as a result of a class action lawsuit that was filed by a 30-year veteran of the company
The payout is a result of a class-action lawsuit first made in 2018 Ann Marie Reinhart, who had been working for Toys ‘R’ Us for 29 years.
‘It’s a shame they aren’t getting more, but this settlement sends a message that employees deserve a place in the front of the line of creditors when businesses fail, and that is important to people who work in retail and their families,’ attorney Jack Raisner, who represented Reinhart, said in a statement.
‘Nobody is getting what they deserved, so that’s a slap in the face,’ Reinhart told CBS MoneyWatch.
Workers that remained until the chain’s final days were told that they were getting severance.
‘I stayed until the end. Six weeks later, they announced no one was getting severance,’ Reinhart said.
‘I helped build that brand, all the weekends and holidays, and we’re rewarded with nothing,’ she said.
Advocates had earlier suggested that the laid off workers were entitled to $75 million in severance after the retailer shuttered 700 U.S. stores last year.