The two buyout firms that took Toys 'R' Us private will each put US$10 million (S$13.8 million) into a fund for workers who lost their jobs when the retailer collapsed last year.

The contributions from KKR & Co and Bain Capital mark the culmination of months of pressure from former employees and their representatives. Workers will be eligible if they had at least a year of tenure and earned between US$5,000 and US$110,000 annually at the defunct retailer, the private equity firms said on Tuesday.

Victim compensation experts Kenneth Feinberg and Camille Biros will administer the programme. They have overseen high-profile distributions of funds from disasters such as the 9/11 terror attacks and compensation claims related to victims of sexual abuse in various Roman Catholic dioceses.

Toys 'R' Us shuttered its last stores at the end of June and its liquidation left thousands of workers without expected severance payouts. That prompted months of lobbying by employees, organised in part by advocacy groups linked to the Center for Popular Democracy.

Those groups estimate that workers are owed US$75 million in severance pay and they have pressed Toys 'R' Us creditors Angelo Gordon and Solus Alternative Asset Management to contribute to the fund, but the hedge funds have so far declined.

The worker groups have also garnered the support of some lawmakers and public pension funds along the way, including a meeting with US senators in Washington in August.

Last week, Toys 'R' Us won court approval for a bankruptcy exit plan that ties creditor recoveries - including severance pay for the fired workers - to lawsuits against the retailer's former officers and directors.

The workers' efforts to get severance pay are just one part of the long drama of the decline and fall of Toys 'R' Us, which was based in Wayne, New Jersey. The company took on US$5 billion of debt in the buyout, a burden that left it ill-equipped to handle competition from Walmart and Amazon.com.

BLOOMBERG