Referred to the Committee on Ways and Means, and in addition to the Committees on Financial Services, the Judiciary, and Education and the Workforce, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
# Stop Wall Street Looting Act Summary
This bill significantly restricts how private equity firms can operate when they acquire companies. It makes private equity funds and their investors jointly and severally liable for all debts and obligations of acquired companies, including worker-related liabilities and legal penalties. This means private equity investors could be personally responsible for company debts, a major change from current practice.
The legislation imposes strict limits on how private equity firms can extract profits from acquired companies. For four years after an acquisition, companies cannot make dividend payments or reduce equity capital. Even after that period, distributions are capped at ten percent of the company's total financial obligations annually. The bill also prohibits companies from laying off U.S. workers and moving operations overseas, and restricts how much debt firms can load onto acquired companies.
When acquired companies go bankrupt, the bill prioritizes worker protections by increasing wage claims from $10,000 to $20,000 per worker and raising claims for benefits to $20,000 per covered employee. It restricts executive compensation during bankruptcies and requires courts to approve any asset sales based partly on whether they preserve worker jobs. The bill also requires private equity firms to disclose extensive information publicly—including fees, returns, portfolio company details, political spending, and workforce demographics—and prohibits them from requiring investors to waive fiduciary duties.
Additional provisions close tax loopholes used by private equity managers, restrict securitization of risky corporate debt, and strengthen protections for striking workers. The bill applies broadly to private equity funds managing over $100 million and has no specific sunset date.
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