Count Wisconsin Senator Tammy Baldwin among the politicians criticizing the private equity industry for placing excessive debt loads on struggling retailers.

Baldwin has sent a letter to Sun Capital Partners that chastised the private equity firm for its treatment of retail department store chain and former portfolio company Shopko. Based in Boca Raton, FL, Sun Capital originally took the Ashwaubenon, WI-based business private for about $1.1 billion in 2005. And after nearly 15 years of stewardship that ultimately pushed the balance sheet further in the red, Shopko filed for Chapter 11 bankruptcy in January. It decided in March to close the company's more than 350 locations and lay off thousands of workers after no buyer emerged.

"Sun Capital's actions and the bankrupting of Shopko are not a surprise to anyone familiar with the abuses of the private equity playbook," Baldwin wrote. "I will continue to work with my colleagues in the Senate to address the forces in our economy that hollow out Wisconsin companies and communities by putting profits for executives over investment in workers."

In the letter, Baldwin also requested that Sun Capital set up a compensation fund for Shopko employees who have yet to receive severance, as well as for the state of Wisconsin, which the company owes about $13.5 million in taxes and other penalties. KKR and Bain Capital set up a similar $20 million fund for employees who lost their jobs when creditors liquidated Toys R Us, a former portfolio company, after it filed for Chapter 11 in late 2017. (On Friday, Bloomberg reported that Toys R Us plans to reopen a half-dozen locations in the US and launch an ecommerce site.) 

A Sun Capital representative told Bloomberg that the firm had earmarked $15.5 million for Shopko through the Chapter 11 process, which it said was enough to pay the owed severance and the state. The firm should still have plenty left in its coffers, given that it reportedly pulled almost $180 million in dividends from Shopko between 2007 and 2015. 

That's the sort of financial engineering that Baldwin reportedly plans to address. She's already taken steps to close the so-called carried interest tax loophole with US Representative Bill Pascrell (D-NJ) by reintroducing a piece of legislation in March dubbed "The Carried Interest Fairness Act." But it appears she wants to do more to protect workers. 

"Legislation will be designed so this doesn't happen again," she told Bloomberg.

The letter comes nearly a year after 19 Democratic members of Congress, including presidential candidate Bernie Sanders, asked Bain Capital and KKR to answer for how the firms managed Toys R Us into bankruptcy. Earlier this year, presidential candidate Elizabeth Warren questioned hedge fund magnate Eddie Lampert's latest deal to take over Sears after the department store chain went bankrupt under his guidance. 

Related read: Shopko employees left jobless with no severance after latest PE retail shelling 

Featured image courtesy of dkfelding/iStock/Getty Images Plus 

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