UPDATE: November 21, 2018: The private equity owners of Toys R Us, KKR and Bain Capital, announced on Tuesday the creation of a $20 million hardship fund to support former employees of the toy retailer, AP reported. The move is to help ease the financial burden caused by store closures. Workers are pushing the firms to pay a total of $75 million they say they were promised.

Dive Brief:

• Toys R Us' private equity sponsors Bain Capital and KKR plan to create a fund to support associates and pay severance, according to media reports and confirmed for Retail Dive by Carrie Gleason, campaign manager for the worker advocacy group Rise Up Retail, which she said has been involved in talks with the private equity firms.
• PitchBook reported Friday that Bain and KKR have had discussions with advocacy groups and former Toys R Us employees, who have been pushing for severance through a petition, the company's bankruptcy process and by lobbying lawmakers, among other efforts. Talks between the firms and advocacy group revolved around a fund to pay back $75 million employees said they were promised by the company.
• Also on Friday, The Wall Street Journal reported that Bain and KKR were "putting together" a $20 million severance fund to "pay thousands of workers left jobless by the retail's bankruptcy."  Gleason would not comment on the amount that the firms have committed to but said workers were still in talks and were pushing for the full $75 million they say they are owed. A spokesperson for Bain Capital declined to comment.

Dive Insight:

When then-CEO Dave Brandon told Toys R Us employees on a call in March that the company would liquidate to pay off its lenders, he said to consider their final weeks spent manning the going-out-of-business sales as their severance.

For many of those among Toys R Us' 30,000 employees who had devoted much of their working life to the retailer, Brandon's words were both a shock and a slap in the face.

"When these big companies buy out retailers, walk away with what they're walking away with — I built this company. I helped build it," Maryjane Williams, a Toys R Us assistant manager who had been with the company for more than 20 years, told Retail Dive this summer. "My severance was to work for the liquidator for the next 60 days. I'm still walking away with nothing."

The employees have made their case on social media, in the streets and in Washington, D.C., where they won the support of several Democratic lawmakers. Members of the U.S. House and Senate this summer wrote a letter to the retailer's private equity owners asking them about severance, the 2005 buyout of Toys R Us and financial transactions between the retailer and its owners, among other topics.

In response to that letter, KKR indicated in July that the firm believed it had "found a path" outside of bankruptcy toward getting financial assistance to laid-off employees. Such a path may be the only way Toys R Us staff could win severance, as the bankruptcy process is set up mostly to ensure secured and unsecured lenders are reimbursed (to the extent possible, and the secured lenders fare much better) when a business becomes insolvent. Gleason said she believed "American laws lag far behind in protecting families."

The surprise liquidation of Toys R Us was just the final insult for the company's associates, who saw their benefits and the quality of their jobs steadily deteriorate, along with the quality of the retailer's stores and operations over the course of two decades leading up to the company's disastrous trip through bankruptcy. Severance is some compensation for that, and may well be necessary for many in a retail climate that is not creating store-level jobs like it once did.