The retailer that recently declared bankruptcy was formerly owned by the two PE majors KKR and Bain Capital, who have decided to jointly pledge $10mn each to create the TRU Financial Assistance Fund – a response to an extraordinary set of circumstances, according to both firms.
“The confluence of the disruption in retail, the push by the company’s secured creditors to liquidate the company’s U.S. operations, and the fact that we have never experienced something like this in the history of either firm led us to try and find a way to provide some financial relief for former employees,” the firms said in a statement.
Evidently, in order to qualify for these payments, ex-employees should meet certain criteria such as being employed with Toys R Us for atleast a year, not drawing an annual salary of more than $110,000 or less than $5,000; and having met the basic termination & employment guidelines of the company Toys R Us.
CNBC reports that this is an move is unusual for the firms, as they are not required under bankruptcy law to do so.
Bain Capital and KKR have appointed Kenneth Feinberg and Camille Biros to independently oversee the workings of the fund. “We have designed a transparent, straight-forward, and simple process that should provide some financial relief to eligible former employees,” Biros said in a statement. “Next, we want to hear from those former employees affected by the unexpected liquidation.”
CNBC reported that there would be a two-week period for all interested parties to comment on the terms and conditions of the plan. These comments will be evaluated by both Feinberg and Biros. After outlining the final terms and conditions, the claims process is expected to begin Dec. 15 and the aim is to complete payments by April 30, 2019.