That noted communist rag the Financial Times has observed that the Toys R Us bankruptcy was driven by private equity looting:

Who brought down Toys R Us? The 69-year-old toy behemoth listed a host of reasons for its slide into bankruptcy in a Chapter 11 regulatory filing, including “expensive debt service”, “unrelenting competition from ecommerce and big box retailers” and a news report that turned its consideration of bankruptcy protection into a self-fulfilling prophecy.

But the blame is perhaps to be placed most squarely on its private equity ownership. Toys R Us has spent more than $250m a year servicing $5bn in long term debt, which was “not a sustainable situation,” one investor said, as the company faced increasingly crushing competition from Amazon and Walmart.

After years of rearranging its debt burden, like other big leveraged buyouts of the pre-financial crisis era, it is presenting a restructuring under bankruptcy protection as a bid for freedom. Toys R Us says it now has a chance to bring its “vision to fruition”, announcing plans to invest in marketing and technology and even promising to raise store employees’ wages.

………

By 2005, as competitors ate into its profitability, Toys R Us hired Credit Suisse and found a buyer: a consortium of private equity firms KKR and Bain Capital, which had experience in retail, and Vornado, the real estate investment firm. The three firms put in $1.4bn in cash, split equally, and borrowed over $5bn to finance the transaction.

………

The three buyers who leveraged it are now expected to have their equity stakes wiped out in the restructuring. KKR and Vornado have written off their investment over time, while Bain has been carrying it near zero.
The Barbie brand owes a debt of gratitude to Toys R Us, which heavily promoted it in its stores, such as this New York outlet in 2007 © Getty

However, the losses to the firms and their investors are mitigated by the fact the buyout firms have paid themselves over $200m in expenses, advisory and management fees, according to SEC filings over 12 years of ownership

The losses accrue to the investors in their funds, the money for expenses and fees, that goes to the firm, and their bonuses.

There is nothing that cannot be ruined through an application of American financial professionals.

H/t naked capitalism