Possible Toys R Us liquidation puts 30,000 jobs at risk
A possible liquidation of all Toys R Us stores in the United States could put 30,000 people out of work.
The Wayne-based toy retail giant apparently broke the news to its employees Wednesday, according to a toy industry analyst. The chain filed for Chapter 11 bankruptcy protection last fall.
Bankruptcy attorney John Scura says pensions for large corporations like Toys R Us are typically set up in separate, protected funds but this is the first thing employees should check.
"There could be a shortfall on certain payments that are made to it,” Scura says.
He says that employees should also see if their pension is protected under federal insurance. Scura says that unemployment insurance is guaranteed in New Jersey but the same cannot be said about a severance.
"Depending on how or what happens with the liquidation, there might be enough to go around,” he says.”
Scura says that the liquidation could also affect paychecks.
"There's no real guarantees because there may not be enough money to pay them so it's a real scary proposition,” Scura says.
Any Toys R Us employee who is worried about their pension is advised to contact the Department of Labor.
Some customers who spoke with News 12 New Jersey say that they are worried about Toys R Us gift cards that they already have. Scura says to use them now, because once the stores close it will be hard to force Toys R Us to redeem them.
"In front of those gift cards are secured creditors, priority creditors and employees,” Scura says. “So gift cards are going to be very low on the totem, so you want to run in and use them if you can now."
Some customers say that this is exactly what they are doing.
"They were really nice. They let us use coupons that you can't usually use coupons for like diapers and they let us use up all your gift cards on everything,” says customer Nicole Queli.
Toys R Us says that the company will honor gift cards for the next 30 days.