Toys R Us was taken over in a debt-loading act of financial engineering in 2005; over the years, despite turning a profit, the service on that debt dragged Toys R Us lower and lower until the management team picked by the financial engineers finally bankrupted the company.
The top 17 execs at the company received $8.2 million in "retention bonuses" mere days before they took the company into bankruptcy. Now they want millions more — $16M-$32M just to stay with the company while it "restructures."
The bankruptcy trustee is fighting not to pay the bonuses.
"It defies logic and wisdom," the objection by trustee Judy A. Robbins states, that Toys R Us is proposing "multimillion-dollar bonuses for the senior leadership of a company that began the year with employee layoffs and concludes it in the midst of the holiday season in bankruptcy.
"Apparently," Robbins said, "this Christmas, Toys R Us intends to deliver not only 'children their biggest smiles of the year' but the insiders, too,' " which is a reference to court claims by Toys R Us that its No. 1 goal is to keep children happy.
Toys R Us bankruptcy trustee blasts executive bonus plan [Joan Verdon/USA Today/The (Bergen County, N.J.) Record]