HR9985-118

Introduced

To subject certain private funds to joint and several liability with respect to the liabilities of firms acquired and controlled by those funds, and for other purposes.

118th Congress Introduced Oct 11, 2024

Analysis under review: This bill has generated analysis that may be too generic or incomplete. Clause-level evidence remains available below.

Summary

What This Bill Does

The Stop Wall Street Looting Act comprehensively regulates private equity funds to curb practices that harm workers and communities. It makes private equity funds jointly liable for the debts and penalties of companies they control, prevents asset-stripping through dividends and leveraged debt, and strengthens bankruptcy protections for workers. The bill also closes tax loopholes that benefit fund managers.

Who Benefits and How

Workers at private equity-owned companies benefit from stronger job protections, including priority for unpaid wages in bankruptcy (up to $20,000), restrictions on permanent replacement of striking workers, and requirements that asset sales prioritize job preservation. Creditors and pension funds gain greater protection through joint liability provisions and extended fraudulent transfer windows (15 years). Retail consumers benefit from new gift card protections in bankruptcy.

Who Bears the Burden and How

Private equity fund managers face dramatically increased liability exposure, being personally liable for debts of companies they control. They lose favorable tax treatment for carried interest (now taxed as ordinary income instead of capital gains), face restrictions on dividends for 4 years post-acquisition, and must meet extensive new disclosure requirements. Real estate investment trusts (REITs) in healthcare lose special tax benefits and face exclusion from federal healthcare programs if they acquire healthcare facility assets.

Key Provisions

  • Joint and several liability for private funds and their managers for all debts of controlled companies
  • 4-year moratorium on dividends after acquisitions, plus 10% cap on distributions thereafter
  • Carried interest taxed as ordinary income rather than capital gains
  • Workers get priority for $20,000 in wages and severance in bankruptcy
  • 15-year fraudulent transfer lookback period for private equity transactions

Evidence Chain:

This summary is generated from the full bill text using AI analysis. Expand "Detailed Analysis" below for identified beneficiaries/burden bearers.

At a Glance

What This Bill Does

Regulates private equity funds by imposing joint liability on controlling funds, restricting asset-stripping practices, strengthening worker protections in bankruptcy, closing tax loopholes for carried interest, and requiring transparency from private investment funds.

Key Policy Areas

Financial Regulation, Labor, Bankruptcy, Taxation, Corporate Governance

Primary Purpose

Regulates private equity funds by imposing joint liability on controlling funds, restricting asset-stripping practices, strengthening worker protections in bankruptcy, closing tax loopholes for carried interest, and requiring transparency from private investment funds.

Policy Domains

Financial Regulation Labor Bankruptcy Taxation Corporate Governance

Title I - Accountability for Private Funds

Identified Gains
Contextual inference, no direct clause citation
  • Workers at PE-owned companies
  • Creditors of PE-owned companies
  • Pension funds
Model: N/A | Version: bill_summary_v2 | Source: ih

Contextual inference, no direct clause citation

Identified Costs
Contextual inference, no direct clause citation
  • Private equity fund managers
  • Private equity funds
  • General partners
Model: N/A | Version: bill_summary_v2 | Source: ih

Contextual inference, no direct clause citation

Title V - Transparency Requirements

Identified Gains
Contextual inference, no direct clause citation
  • Pension fund investors
  • Limited partners
  • SEC
  • Public transparency
Model: N/A | Version: bill_summary_v2 | Source: ih

Contextual inference, no direct clause citation

Identified Costs
Contextual inference, no direct clause citation
  • Private equity funds
  • Investment advisers
  • General partners
Model: N/A | Version: bill_summary_v2 | Source: ih

Contextual inference, no direct clause citation

Title II - Reforms for Target Firms

Identified Gains
Contextual inference, no direct clause citation
  • Workers
  • Labor unions
  • Federal government (tax revenue)
  • Target company employees
Model: N/A | Version: bill_summary_v2 | Source: ih

Contextual inference, no direct clause citation

Identified Costs
Contextual inference, no direct clause citation
  • Private equity funds
  • Private fund managers
  • Healthcare REITs
  • Employers
Model: N/A | Version: bill_summary_v2 | Source: ih

Contextual inference, no direct clause citation

Title IV - Tax Reforms

Identified Gains
Contextual inference, no direct clause citation
  • Federal government (tax revenue)
  • Taxpayers
Model: N/A | Version: bill_summary_v2 | Source: ih

Contextual inference, no direct clause citation

Identified Costs
Contextual inference, no direct clause citation
  • Private equity fund managers
  • Hedge fund managers
  • Investment managers
Model: N/A | Version: bill_summary_v2 | Source: ih

Contextual inference, no direct clause citation

Title VI - Collateralized Loan Obligations

Identified Gains
Contextual inference, no direct clause citation
  • CDO investors
  • Financial system stability
Model: N/A | Version: bill_summary_v2 | Source: ih

Contextual inference, no direct clause citation

Identified Costs
Contextual inference, no direct clause citation
  • CDO managers
  • Securitizers
Model: N/A | Version: bill_summary_v2 | Source: ih

Contextual inference, no direct clause citation

Title III - Bankruptcy Reforms

Identified Gains
Contextual inference, no direct clause citation
  • Workers in bankruptcy proceedings
  • Employees owed wages
  • Retail gift card holders
  • Commercial tenants
Model: N/A | Version: bill_summary_v2 | Source: ih

Contextual inference, no direct clause citation

Identified Costs
Contextual inference, no direct clause citation
  • Corporate executives
  • Senior managers
  • Bankruptcy consultants
  • Secured creditors
Model: N/A | Version: bill_summary_v2 | Source: ih

Contextual inference, no direct clause citation

Title VII - Miscellaneous

Identified Gains
Contextual inference, no direct clause citation
  • Regulatory enforcement
Model: N/A | Version: bill_summary_v2 | Source: ih

Contextual inference, no direct clause citation

Identified Costs
Contextual inference, no direct clause citation
  • Entities attempting to evade the Act
Model: N/A | Version: bill_summary_v2 | Source: ih

Contextual inference, no direct clause citation

Legislative Progress

Introduced
Introduced Committee Passed
Oct 11, 2024

Mr. Pocan (for himself, Ms. Jayapal, Mr. Grijalva, Mr. Larsen …

Stakeholder Effects

cui bono?

How this legislation distributes effects. Mention counts reflect frequency, not effect magnitude.

Financial Services
37 mentions across 24 clauses
+6 positive -31 negative

Acquirers of bankruptcy assets, Bankruptcy estate creditors, CDO investors

Positive-direction: Bankruptcy estate creditors, CDO investors, Creditors of PE-controlled companies, Institutional investors, Potential private fund investors, Target company creditors

Negative-direction: Acquirers of bankruptcy assets, Collateralized debt obligation managers, General partners of private funds, Hedge fund managers, Investment advisers, Investment advisers filing Form PF, Private credit and direct lending funds, Private equity and hedge fund managers, Private equity and hedge funds, Private equity firms acquiring distressed assets, Private equity fund investment advisers, Private equity fund managers, Private equity funds, Private equity funds using leverage, Private fund managers serving pension plans, Private funds receiving government assistance, Private investment funds, Private investment funds receiving government funds, Secured creditors, Secured creditors (banks, lenders), Securitizers, Unsecured creditors (other), Venture capital fund managers

Labor
10 mentions across 10 clauses
+10 positive

Employees owed wages in bankruptcy, Non-executive employees owed severance, Non-management workers at bankrupt companies

Government
9 mentions across 9 clauses
+9 positive

Federal and state government agencies, Federal government, Federal government (tax revenue)

Pension Funds
5 mentions across 5 clauses
+5 positive

Employee welfare benefit plans, Pension fund beneficiaries, Pension funds (as creditors)

Real Estate
4 mentions across 3 clauses
-4 negative

Healthcare REITs, Healthcare REITs with taxable subsidiaries, REIT shareholders

Corporate Management
3 mentions across 3 clauses
-3 negative

Corporate executives and senior managers in bankruptcy, Corporate executives receiving retention bonuses, Employers in bankruptcy with labor violations

Professional Services
2 mentions across 2 clauses
-2 negative

Bankruptcy consultants

General Public
2 mentions across 2 clauses
+2 positive

Consumers holding unredeemed gift cards, General public (transparency)

30/39
sections analyzed
Full impact breakdown

Bill Structure & Actor Mappings

Who is "The Secretary" in each section?

Domains
Financial Regulation Corporate Governance
Domains
Financial Regulation Labor Taxation Healthcare
Actor Mappings
"the_secretary"
→ Secretary of Labor
"the_commission"
→ Securities and Exchange Commission
Domains
Bankruptcy Labor
Domains
Taxation
Actor Mappings
"the_secretary"
→ Secretary of the Treasury
Domains
Financial Regulation Corporate Governance
Actor Mappings
"the_commission"
→ Securities and Exchange Commission
Domains
Financial Regulation
Domains
Financial Regulation

Note: The Secretary refers to Secretary of Labor in Title II (Section 201) but Secretary of the Treasury in Title IV (tax provisions)

Key Definitions

Terms defined in this bill

6 terms
"affiliate" §3_affiliate

A person owning/controlling 5% or more voting securities, or whose business is operated under lease/agreement by another entity

"target firm" §3_target_firm

A corporation engaged in interstate commerce with respect to which a private fund is a control person

"active interest" §3_active_interest

Interest in a controlling private fund held by person with management or advisory role

"change in control" §3_change_in_control

Change in legal right to vote more than 5% of voting securities

"capital distribution" §3_capital_distribution

Cash/share dividend, repurchase, redemption, buyback, or interest/fee payment on stock

"controlling private fund" §3_controlling_private_fund

A private fund that is a control person with respect to a target firm

We use a combination of our own taxonomy and classification in addition to large language models to assess meaning and potential beneficiaries. High confidence means strong textual evidence. Always verify with the original bill text.

Learn more about our methodology