Toys 'R' Us executives received $16 million in bonuses before the troubled retailer filed for its 2017 bankruptcy, a new lawsuit claims. 

Before the children's toy store chain known for its mascot Geoffrey the Giraffe filed for the bankruptcy protection, chief executive David Brandon and others in senior management collected bonuses and boosted their compensation by 75 per cent, the lawsuit filed by a group of creditors in New York on Thursday claims. 

Brandon walked away with $2.8 million, the suit claims, when vendors were left with 20 cents on the dollar in the company's bankruptcy. 






A new lawsuit claims Toys 'R' Us executives received $16 million in bonuses before the troubled retailer filed for its 2017 bankruptcy







Former Toys 'R' Us chief executive David Brandon (pictured) is accused in the lawsuit along with others in senior management of collecting bonuses that boosted their compensation by 75 per cent, the lawsuit filed by a group of creditors in New York on Thursday claims







Brandon walked away with $2.8 million, the suit claims, when vendors were left with 20 cents on the dollar in the company's bankruptcy. He is pictured in one of the chain's former stores in Secaucus, New Jersey, a year before the chain filed for bankruptcy protection


The suit, claiming a fraudulent scheme was created to bilk the creditors out of billions, was formed by a group of creditors known as the TRU Creditor Litigation Trust, the New York Post reports.

The legal action seeks $1.1 billion for damages.

The suit alleges that Brandon had arranged for the bonuses that were approved by the chain's board of directors in the months leading up to the bankruptcy, and as losses were starting to mount.






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'We have to be creative and design something that works for us,' Brandon is alleged to have said in a July 2017 e-mail, in a reference to executives' pay, which he boasted was superior to what their peers in the industry made at the time.

The lawsuit accuses Brandon of placing his loyalties with Bain Capital, rather than the retailer.

Bain, a private equity firm that was backing the chain, has ties to US Senator Mitt Romney, a Republican representing Utah who also ran for president in the 2008 and 2012 primaries.






The lawsuit accuses Brandon of placing his loyalties with Bain Capital, rather than the retailer. Bain, a private equity firm, that was backing the toy retailer







Bain has ties to US Senator Mitt Romney, a Republican representing Utah who also ran for president in the 2008 and 2012 primaries


The lawsuit points out emails revealing Brandon admitted he was given a break on fees for putting his personal money in Bain investment funds.

Brandon, currently a director at Domino's, the pizza delivery and carry-out chain, did not return a call from the Post requesting comment.

The suit also claims Richard Barry, bandar judi dominoqq the former chief merchandising officer at the retailer, who is now president of a new Toys 'R' Us company that bought the trademark to stage a comeback for the chain, of fraudulently asking vendors to continue sending merchandise before the bankruptcy filing.






The suit also claims Richard Barry, former chief merchandising officer at the retailer, who is now president of a new Toys 'R' Us company, of fraudulently asking vendors to continue sending merchandise before the bankruptcy filing


When industry players, including MGA Entertainment CEO Isaac Larian, asked him about rumors that the chain would rather liquidate its stock than reorganize, Barry denied it, according to the suit.

'We are going to have a big year together!!' he wrote to Larian in January 2018, the complaint says.

By March of that same year, the company said it was shuttering its businesses in the US and UK.

'At all times, the former directors and officers of Toys 'R' Us and members of management acted in the best interests of the company and its stakeholders,' the directors' lawyer Bob Bodian said in a statement, reports the Post.






Attorney Bob Bodian, who is representing the former directors of Toys 'R' Us, says that, ‘At all times, the former directors and officers of Toys ‘R' Us and members of management acted in the best interests of the company and its stakeholders'


'Because none of the named defendants has any financial exposure, this lawsuit is just a misguided effort to pressure insurance carriers to pay meritless claims. We will defend against this baseless lawsuit vigorously,' Bodian added.

Attorney Greg Dove of Dovel & Luner, who is representing the plaintiffs, said, 'The toy makers want a public trial and for these executives to be confronted with what they did.'













 

 

 

 

 



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Toys 'R' Us ex-executives face lawsuit after bankruptcy bonuses