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Fired Workers Find No Friends in Toys 'R' Us Bankruptcy Lenders

  • Angelo Gordon and Solus say they didn’t cause the collapse
  • Advocacy groups seek more pay for 33,000 former employees
Signage is displayed on the exterior of a Toys 'R' Us retail store in the Queens borough of New York, U.S.
Signage is displayed on the exterior of a Toys 'R' Us retail store in the Queens borough of New York, U.S.Photographer: Jeenah Moon/Bloomberg

The private equity owners of Toys “R” Us may be taking unprecedented steps toward supporting the company’s former workers, but the lenders that financed its bankruptcy -- and ultimate liquidation -- are making no such promises.

Angelo Gordon & Co. LP and Solus Alternative Asset Management don’t plan to contribute any more cash to benefit Toys “R” Us employees who were left jobless when the biggest U.S. toy retail chain shut down, according to an Aug. 21 letter reviewed by Bloomberg. The letter from lawyers at Wachtell, Lipton, Rosen & Katz came in response to two worker advocacy groups who asked the hedge funds last month “to take responsibility by ensuring that Toys “R” Us employees receive the money that they had been counting on.”