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Fired Toys “R” Us Inc. workers took their travails to Congress yesterday to press for changes in the way private equity deals are structured, Bloomberg News reported. Potential U.S. presidential candidates Kirsten Gillibrand and Cory Booker, and Minority Leader Chuck Schumer were among Democratic senators who met yesterday with former staff members and workers’ rights groups. The ex-employees are asking for new leverage limits on private equity deals, along with a worker-protection tax and profit clawbacks that would fund payments in situations similar to the one now playing out with the demise of the private equity-owned U.S. toymaker. In a joint meeting with Sens. Booker and Bob Menendez, several workers, wearing blue and purple Toys ‘R’ Us or Babies ‘R’ Us shirts, asked the legislators to take action to prevent similar scenarios. Besides broader industry legislation, they asked that lawmakers urge creditors and the buyout firms to contribute to a hardship fund for the laid-off Toys workers. Menendez said that he and Senator Booker are considering specific policy proposals and may offer an amendment to the fiscal 2019 appropriations bill set for a vote in the coming days.

Many cities and states can no longer afford the unsustainable retirement promises made to millions of public workers over many years. By one estimate they are short $5 trillion, an amount that is roughly equal to the output of the world’s third-largest economy, the Wall Street Journal reported. Certain pension funds face the prospect of insolvency unless governments increase taxes, divert funds or persuade workers to relinquish money they are owed. It is increasingly likely that retirees, as well as new workers, will be forced to take deeper benefit cuts. In Kentucky, a major pension plan covering state employees had about 16 percent of what it needs to fulfill earlier promises, according to the Public Plans Database, which tracks state and local pension funds, based on 2017 fiscal year figures. A fund covering Chicago municipal employees had less than 30 percent of what it needed in that fiscal year, according to the same database. New Jersey’s pension system for state workers is so underfunded it could run out of money in 12 years, according to a Pew Charitable Trusts study.

Geokinetics Inc. entered bankruptcy with about 330 North American employees, but as few as 16 might still have jobs by late August as part of a deal struck with creditors so the seismic-data supplier can continue to use cash to get through chapter 11, WSJ Pro Bankruptcy reported. The Houston-based company sought protection from creditors last month with a deal in hand to sell nearly all of its assets for nearly $20 million to publicly traded oil-field services provider SAExploration Holdings Inc. The purchase was approved last week by U.S. Bankruptcy Court in Houston. According to a court filing, Geokinetics and related companies in bankruptcy have agreed in a deal with creditors to cut their payroll to no more than 27 full-time workers as of July 30. That doesn’t, however, include employees retained under a “transition services agreement,” with their wages to essentially be paid by SAExploration.

Former Toys “R” Us workers will ask a bankruptcy judge to give them severance pay, which could give them the same repayment priority as the lawyers, financial advisers and suppliers who were considered vital to winding down its U.S. operations, Bloomberg News reported. Toys “R” Us has agreed to give the workers until July 23 to file the request, according to a July 16 court document, leaving the possibility open that a severance agreement could be reached. The company also said that it reserves the right to fight the claim. By submitting an administrative claim in Toys “R” Us’s bankruptcy liquidation, the 33,000 workers are setting up a confrontation with other creditors given high priority under the U.S. Bankruptcy Code. Any severance deal that uses Toys “R” Us’s shrinking pool of cash would need court approval and would likely be opposed by other creditors.