Solus Alternative Asset Management, a New York hedge fund best known for its role in the bankruptcy of Toys “R” Us, is under pressure from investors unhappy with its performance, the Wall Street Journal reported. In a sign of discontent, some investors have asked to retrieve their money before the end of their agreed-upon terms as Solus appears on track to deliver its second consecutive year of losses. So far, clients have asked to pull at least $100 million, sources said, a relatively small amount of money for the firm, which manages about $4 billion. However, the clients’ requests add strain to Solus’ assets, which have shrunk by about one-third since last year. Solus was a lender to Toys “R” Us ahead of its bankruptcy filing. Under the company’s complex capital structure, the hedge fund and four other debtholders essentially had the power to stop the clock on its reorganization under chapter 11. Toys “R” Us decided its only option was to liquidate, the Journal reported. Solus has said that it wasn’t responsible for the iconic toy store’s demise. Assets at Solus have dropped steeply, by $1.7 billion, from about $6 billion last year.
