At the time, many commentators blamed Amazon. But this was, at best, only part of the story. Toys’ sales remained steady, even during the Great Recession, and in the year before it filed for bankruptcy, its $11 billion in revenue17 accounted for an estimated one-fifth of all toy sales in the country.18 The problem wasn’t market share; the problem was the debt. By 2017, Toys’ payment on the interest alone nearly matched its entire operating income: the company had $460 million in operating income and $457 million in interest expenses.19 Without money, the company couldn’t make the necessary investments to compete online, couldn’t hire the best people, and couldn’t keep its stores clean.

Sometimes the problem was simply that private equity firms understaffed their stores. For instance, after BC Partners bought PetSmart in 2015, it bragged on its website that it increased the company’s profitability by “improving corporate efficiency.”58 But in practice, according to employees, this meant dramatic layoffs, which left stores dangerously understaffed.59 As detailed by Vice News, this had a particularly gruesome effect. With too few employees to transport animals that died at the store, carcasses of dead animals literally piled up in PetSmart freezers across the country. One employee shared a photo she said was filled with two months’ worth of dead animals; another employee said their store had a freezer with ten months’. A third employee said that, for lack of time, she would simply throw bodies away. “Sometimes I was doing it weekly because we didn’t have staff to take a vet trip to properly dispose of them so I was instructed to dispose of them myself,” she told Vice.60 (A spokesman for PetSmart denied to Vice that the store’s standard of care had declined, while a law firm representing the company wrote to the publication that “PetSmart holds the health and well-being of its associates, customers, and pets as its top priority.”)61

At other times, private equity firms simply hired the wrong people. In 2012, Golden Gate Capital and Blum Capital bought the discount shoe seller Payless.65 As described in a detailed profile in the New York Times, through a series of owners, Payless tumbled through bankruptcy three times in four years. Part of the problem was that for every one dollar in profit Payless made, more than a dollar went to its private equity owners and another quarter went to its lenders. This made the company susceptible to crisis when, for instance, a work slowdown by longshoremen left Payless’s shoes waiting on boats for several weeks. But part of the problem was who these owners put in charge. After Alden Global Capital (which describes itself as a hedge fund but engages in private-equity-like buyouts) bought Payless out of bankruptcy, it installed as CEO, not an executive from footwear, fashion, or even retail, but an investment banker: Martin R. Wade III. Payless middle management felt that Wade and his team treated them with contempt: “They became convinced that, ‘You guys don’t know what you’re talking about,’” one former midlevel employee told the Times.66 And yet, despite their inexperience, the new management enthusiastically pushed its own ideas, such as a plan to buy millions of World Cup–themed flip-flops. The problem was that the sandals didn’t arrive until after the World Cup had ended and even then often with flags of countries like Mexico and Argentina, where Payless had no stores. Ultimately, the company had to sell the flip-flops at a deep discount. Another idea was to shift quality inspections from a dedicated facility to individual factories. As a result, Payless received many shoes that were defective in various ways: size six shoes labeled as size three, for example. A former employee said that “missing one shoe can wipe out whatever you think you’re saving.”67 Ultimately, Payless returned to bankruptcy and closed all its stores in the United States. (In a statement to the New York Times, Golden Gate Capital said that “[w]hen we exited Payless, we left it with a right-sized store footprint and meaningful earnings opportunities for future owners.”)

But why go through this whole process at all? Why would Friendly’s declare bankruptcy, just to be sold from one Sun Capital fund to another? The answer was simple: pensions. At the time of bankruptcy, Friendly’s had $115 million in pension liabilities.92 By selling Friendly’s to one of its affiliates, Sun Capital was able to reacquire its own company free and clear of those liabilities. Instead, they were transferred to the Pension Benefit Guaranty Corporation. The PBGC was chartered by Congress to rescue underfunded pension plans and paid for itself in part through insurance premiums that healthy pension plans paid to it.93 But it was always meant as the destination of last resort, not as a convenient sucker for strategic bankruptcy reorganizations.

After she was laid off, Reinhart became active in the Dead Giraffe Society, a Facebook group of former Toys “R” Us employees named for the company’s mascot, Geoffrey the Giraffe.121 With the assistance of the organizing group United for Respect, Reinhart and others began to advocate for better treatment of the company’s former workers. They met with members of Congress, who, at their urging, wrote to Bain, KKR, and Vornado and demanded to know why their employees hadn’t been paid severance.122 They convinced Senators Cory Booker and Robert Menendez, along with Congressman Bill Pascrell, to protest with them.123 They held a march through Manhattan, carrying a coffin for the mascot Geoffrey,124 and rallied outside the penthouse home of the CEO, David Brandon.125