Sen. Bernie Sanders and other liberal lawmakers asked the private equity owners of Toys “R” Us Thursday whether they intentionally forced the toy company toward bankruptcy and mass layoffs.
“We are concerned that your investment firms have deliberately chose this path for the company, its works and its communities,” the Congressional Progressive Caucus wrote in a letter to executives at Bain Capital, KKR, and Vornado Realty Trust, the firms that bought Toys “R” Us in 2005.
None of the three investment companies responded to a request for comment.
Sanders, I-Vt., and the other members of Congress faulted the leveraged buyout model employed by the investment firms for causing the toy company’s failure, and asked the executives whether it was a deliberate policy to “load the company with debt.” They also asked if they planned to offer severance pay to any workers.
The bankruptcy caused Toys “R” Us to close the doors of its U.S. stores last week, as creditors decided to sell off its remaining assets rather than continue its operations. The company had nearly $5 billion in debt.
