Former Toys “R” Us workers will ask a bankruptcy judge to give them severance pay, which could give them the same repayment priority as the lawyers, financial advisers and suppliers who were considered vital to winding down its U.S. operations, Bloomberg News reported. Toys “R” Us has agreed to give the workers until July 23 to file the request, according to a July 16 court document, leaving the possibility open that a severance agreement could be reached. The company also said that it reserves the right to fight the claim. By submitting an administrative claim in Toys “R” Us’s bankruptcy liquidation, the 33,000 workers are setting up a confrontation with other creditors given high priority under the U.S. Bankruptcy Code. Any severance deal that uses Toys “R” Us’s shrinking pool of cash would need court approval and would likely be opposed by other creditors.
