Solus Alternative Asset Management LP didn’t kill Toys “R” Us Inc., the hedge fund said in a letter to its investors after coming under pressure for its investments in the liquidating retailer, Bloomberg News reported. “Solus did not force Toys ‘R’ Us to liquidate,” Chief Investment Officer Christopher Pucillo said in the Sept. 6 letter seen by Bloomberg News. “It was the culmination of a host of factors, including a decade-plus of excessive leverage, mismanagement and the increasing effects of competition from the likes of Amazon and Walmart.” The two-page letter lays out a timeline and narrative to rebut allegations that the refusal of Solus and other creditors to compromise on their investments forced the company to wind down when it could have lived on through a sale. New York-based Solus invested $20 million in a Toys “R” Us loan before its bankruptcy and added stakes in its senior debt after the chapter 1u1 filing, according to the letter. As the company closes its operations, Solus has attracted criticism from worker groups who say they deserve hardship pay after losing their jobs and that Solus and other lenders share the blame for the company’s failure to restructure.
