Bankruptcy attorneys are the real winners in the Toys R Us bankruptcy. After one year, workers who were promised a severance that was subsequently taken back by the company are receiving a small part of what they were owed: $2 million. The attorneys representing the company, however, are receiving $56 million.
The bankruptcy judge in charge of the lawsuit filed on behalf of 33,000 former Toys R Us employees approved the settlement amount. Each one of the former workers will receive approximately $60.
One of the attorneys representing the affected former employees lamented: “It’s a shame they aren’t getting more, but this settlement sends a message that employees deserve a place in the front of the line of creditors when businesses fail and that it is important to people who work in retail and their families.”
Last November, two owners of Toys R Us had set aside $20 million for workers affected by the company’s bankruptcy, which is a far cry from the $2 million awarded to them. Advocates had previously estimated that the workers were owed $75 million.