Nineteen members of Congress sent a letter to the private-equity backers of Toys “R” Us Inc. questioning their role in the toy retailer’s bankruptcy and criticizing the leveraged-buyout model as an engine of business failure and job loss, the Wall Street Journal reported. The July 5 letter was addressed to the heads of KKR & Co., Bain Capital and Vornado Realty Trust and signed by 18 Democratic members of the House of Representatives and Sen. Bernie Sanders (I-Vt.). It asks whether the investment firms deliberately pushed Toys “R” Us into bankruptcy and encourages them to compensate the roughly 33,000 workers who lost their jobs. “Leveraged buyouts — such as those facilitated by your companies — often result in mass job loss, closure of profitable businesses and unnecessary financial burdens for local government,” the letter states. “Such buyouts harm communities, while investment managers walk away with significant gains.”
