Stop Wall Street Looting Act

A private fund that controls an acquired company, and people with an active role in that fund, would be jointly responsible for the company’s and its affiliates’ liabilities. These could include acquisition debt, government penalties, certain worker-notice violations, and pension obligations.

For four years after a fund takes control, an acquired company could not make capital distributions or similarly reduce its equity; the bill also limits certain later distributions and outsourcing tied to relocating work overseas. It would make some transfers easier to challenge in bankruptcy, including by creating a presumption of insolvency for specified transactions and allowing a lookback of up to 15 years.

The bill would raise the bankruptcy priority limit for certain wages and benefit-plan contributions to $20,000, remove the current 180-day limit for specified claims, and give certain severance and employee-benefit claims priority. It would also restrict special payments to executives and other highly paid workers, and direct bankruptcy courts to weigh job preservation and employment terms when approving asset sales.

The bill would impose a surtax on certain payments from controlled companies to investment firms and change business-interest deduction rules for certain businesses owned by private funds. It would also change tax rules for real estate investment trusts and bar certain entities from Federal health care program payments after they sell assets to, or newly pledge assets for a loan with, a real estate investment trust.

The bill would prohibit employers from permanently replacing striking workers, discriminating against workers because of strike activity, or using a lockout to influence bargaining before a strike. A covered fund receiving Federal or State funds would have to disclose information about the money and its owners, and could not acquire a company or distribute money to shareholders for two years.

The bill includes sections on private-fund fees and returns, fiduciary duties, fund marketing, non-bank lending and private credit, and risk-retention requirements for securitized corporate debt. The text also includes sections on gift-card purchasers and commercial real estate; their details are not included in the readable portion.