Management fees in this case were $200 million. That's a pretty nice salary!
"Toys 'R' Us does say in its SEC filings that $47 million in transaction fees that it owed KKR, Bain and Vornado, have been waived. The advisory fees were also voluntarily reduced by the investment firms in recent years" [1].
(Toys 'R' Us did pay the PE consortium "$470 million in fees and interest" [2], but the vast bulk of that goes to the fund, i.e. the people who just lost a billion dollars.)
[1] https://www.forbes.com/sites/nathanvardi/2017/09/19/the-big-...
[2] https://www.bloomberg.com/news/articles/2017-09-19/bain-kkr-...
>Bain, KKR, and Vornado will have to write off their investment, of course. But they did suck around $200 million in fees out of Toys 'R' Us over the course of their ownership.
TL; DR Nobody on the Toys 'R' Us deal teams at these firms is happy about this, and all will find their lives in the industry a little bit harder going forward.
Private equity paid the original shareholders for Toys 'R' Us. The limited partners in this fund (and creditors) lost a lot. The managers extracted their management fee, but that's basically only salaries. Good salaries, but none of the 20% of the upside that makes people in PE rich.
I agree that workers are left out. Employees in private-equity acquired companies should get (a) stock (or better yet, an interest in the diversified fund) and/or (b) enhanced downside protection (e.g. longer or bigger unemployment benefits, paid for by the private equity fund). But in this specific case, employees didn't turn out that much more badly than they would have otherwise. (For those who might have lost their jobs in the next recession, their lot was arguably improved.)