The “Stop Wall Street Looting Act” is designed to enhance corporate responsibility and protect workers' rights. It includes measures against looting, such as restrictions on post-acquisition payouts, improving protections for workers during company bankruptcies, closing tax loopholes, ensuring investor protection, and imposing regulations on risky corporate debt.

Congress acknowledges the significant influence of private equity funds over many industries and communities, highlighting concerns about debt-laden practices harming companies and stakeholders, the obscured performance metrics of these funds, and the increased systemic risk from risky market debt. They stress the need for measures to protect workers, consumers, and investors, and to prevent private funds from exploiting viable companies for profit.

The section defines key terms used in the bill, such as "affiliate," which refers to entities with significant control over another, and "capital distribution," which includes things like dividends and share buybacks. It also explains what constitutes a "change in control," identifies various roles like "control person" and "insider," and defines different types of financial entities and instruments such as "corporation," "private fund," and "security."

In this section, Congress explains that both controlling private funds and those with an active interest in them are responsible for all of the financial obligations of any company they control, as well as any related companies. This includes debts, penalties, violations of worker-related laws, and unfunded pension liabilities.

In this section, it is declared that it goes against public policy for a target company or its affiliate to offer protection or reimbursement to a controlling private fund concerning the target company, its affiliates, or any person with an active interest in the fund, regarding their responsibilities under another section of the law.

In this section, rules are set to limit how a company can pay out dividends, buy back shares, or outsource jobs after it's taken over by an investment fund, particularly for four years following the acquisition. If these rules are broken, the transactions are invalid, and the people responsible can be held liable and pay for legal fees if someone sues to reverse those actions.

The text outlines amendments to laws concerning fraudulent transfers, especially those related to change in control transactions as defined in the Stop Wall Street Looting Act. It introduces new rules for defining insolvency during such transactions, extends the time frame to reverse certain financial actions to 15 years, and enhances the oversight of committees over debtor actions and relationships with insiders.

The section introduces a surtax on certain payments received by investment firms from firms they control. This surtax, calculated as a specific percentage of these payments, aims to prevent tax avoidance through complex financial arrangements, and the section also includes various amendments and clarifications to ensure its proper application.

A surtax is imposed on investment firms when they receive certain payments from companies they control, where the amount of the tax depends on the highest tax rate applicable that year. The taxed payments exclude interest or property distributions and involve specific entities involved in raising or returning capital and dealing with securities or real estate.

The proposed changes to the tax code prevent certain businesses owned by private funds from deducting as much interest on their taxes if they have a high ratio of debt to equity. Additionally, these businesses cannot choose certain tax options related to real estate, and any existing choices for these options will be canceled for future tax years.

The section adds new rules to the Investment Company Act of 1940, requiring certain entities that receive government funds to publicly disclose details about the funds they got, like the total amount, how it was used, and employee information. For two years after receiving the funds, they are also prohibited from acquiring other companies or distributing profits to shareholders.

In SEC. 66, entities that receive funds from federal or state agencies must publicly disclose various financial and operational details, such as total funds received, workforce demographics, loans, and the pay ratio between the CEO and the median employee. Additionally, they are prohibited from acquiring companies or distributing funds to shareholders for two years after receiving the funds.

The section prohibits any person or organization from receiving payments from federal health care programs if they sell assets to or use assets as collateral for loans with a real estate investment trust (REIT), unless the agreement was made before this rule was enacted.

The section repeals the special rules regarding taxable REIT subsidiaries that own certain healthcare properties by removing specific references to "qualified health care properties" in the Internal Revenue Code. These changes will take effect for taxable years starting after the law is enacted.

The section amends the Internal Revenue Code to remove qualified REIT dividends from the definition of qualified business income, and these changes will be effective for tax years starting after the law is enacted.

This section amends the National Labor Relations Act to strengthen protections for workers involved in strikes. It prohibits actions like replacing, discriminating against, or locking out employees because of their participation in a strike, and outlines unfair practices related to coercing employees into employer campaign activities unrelated to their job.

The amendment to Section 507(a) of title 11, United States Code, increases the priority amount for certain wages from $10,000 to $20,000 and changes the rules around severance pay, treating it as fully earned upon an employee's layoff or termination. Additionally, it modifies the calculation for employee benefits, allowing up to $20,000 per employee covered by a benefit plan.

The section amends the United States Code to prioritize severance pay for employees who are laid off or terminated, ensuring it is considered fully earned at the time of layoff or termination, and mandates that specific contributions to employee welfare benefit plans must be honored following the filing of a bankruptcy petition.

The section amends bankruptcy laws to prioritize paying any back pay, penalties, or damages owed for violations of labor laws. It also clarifies the calculation of days for notice violations related to worker adjustments and retraining notifications.

The section modifies rules about executive pay in bankruptcy cases under Section 503(c) of the United States Code. It clarifies who is considered a senior executive or highly paid employee and sets stricter conditions that must be met, with clear evidence required, before any bonuses or incentives can be given.

The amendment to Section 363 of title 11 of the United States Code prohibits approval of special payments or benefits to high-ranking employees or consultants of a debtor company if the company has stopped or reduced severance pay for regular employees within a year prior to filing for bankruptcy. Additionally, it requires court approval for certain financial transactions involving such payments.

The section amends the rules on executive compensation when a company exits bankruptcy, requiring court approval for payouts to senior executives and top-paid employees to ensure they are not excessive compared to regular employees. It also mandates that such compensation be reasonable compared to similar positions at other companies and fair considering any sacrifices made by regular employees.

The amended section of the law requires that if employees have not received owed wages, vacation pay, severance, or other compensation due to them after bankruptcy proceedings begin, these unpaid amounts are considered necessary costs tied to the property securing a loan. The trustee must recover these funds to pay the employees or the relevant welfare benefit plan, even if there was an agreement waiving these rights.

In this section of the bill, it is explained that a trustee has the power to reverse certain payments made to insiders of a company, like top executives or highly paid employees, if those payments were made under a special bonus plan set up before bankruptcy and don't meet specific legal standards. If the trustee doesn't take action, others can seek court approval to recover those payments for the benefit of the company's finances.

The section mandates that when a court approves the sale or lease of a debtor's property, it must prioritize offers that preserve and maintain the jobs and employment conditions of the debtor's workforce. Furthermore, any buyer or lessee must inform the court about the impact of the transaction on employment and disclose any noncompliance with the terms, which the court can then address with appropriate measures.

The section amends the United States Code to define a "gift card" as a prepaid promise, card, or code redeemable at a single merchant or affiliated merchants, and it updates bankruptcy law to allow individuals to claim up to $1,800 if money was deposited for undelivered goods, services, or unredeemed gift cards before a case begins.

Section 311 of the bill modifies Section 365(d) of Title 11 in the United States Code. It removes paragraph 4 and renumbers the existing paragraph 5 to become the new paragraph 4.

Whenever this law changes or removes a part of a section mentioned, it's referring to a part of the 1986 Internal Revenue Code, unless stated otherwise.

The bill changes the rules for including the value of a partnership interest in a person's taxable income when they receive it for providing services. It states that the value is based on what the partner would get if the partnership sold all its assets and suggests automatic inclusion of this value in income, unless the person elects otherwise, with these changes applying to transfers made after the bill becomes law.

The section introduces new rules for partners providing investment management services to partnerships, treating certain partnership interests as regular income or loss instead of capital gains or losses, which affects how these partners are taxed. It outlines conditions under which these rules apply, describes related terms, and discusses exceptions and adjustments for specific capital interests, ensuring the alignment of these provisions with existing tax laws.

The section outlines the rules and tax treatment for partners who provide investment management services to partnerships, specifically detailing how income, gain, and loss related to these services are recharacterized as ordinary income or loss. It defines terms such as "investment services partnership interest," describes how these interests are taxed upon disposition, and specifies exceptions and additional rules concerning qualified capital interests and related persons.

The section amends the Investment Company Act of 1940 to require controlling private funds to disclose detailed information about their fees, assets, and activities each year, including their debt, performance, investors, political spending, workforce, and any federal support. This information will be made publicly available and periodically reviewed to ensure it stays current with market trends.

The section outlines rules requiring a controlling private fund to provide detailed annual reports about its financial activities, such as assets, debts, fees, and political expenditures. It mandates public disclosure of these reports and includes periodic reviews to keep regulations up-to-date with changing market conditions.

The section updates fiduciary responsibilities under the Employee Retirement Income Security Act (ERISA) and the Investment Advisers Act of 1940 by including managers of private funds, prohibiting waivers of fiduciary duties, and ensuring that all limited partners in a controlling private fund receive equal terms or benefits.

Investment advisers who manage private funds must provide potential investors with detailed information about the other funds they manage, including the funds' investment status, performance, employee numbers, regulatory actions, and how they're sold or dissolved. They must also disclose any legal issues and the specific ways they divest from their investments.

The section requires the Commission to change its rules so that investment advisers must report quarterly about their private fund investments and loans. This must happen within 180 days after this Act becomes law.

The amendments to Section 15G of the Securities Exchange Act require managers of collateralized debt obligations to obtain and retain part of the credit risk for assets they do not currently hold. These managers must hold onto this risk either directly or through a fully owned affiliate, and any transfer of assets they initiate will be considered as transferred by them.

The section makes it illegal for anyone to intentionally avoid following any part of the Act by doing things like entering into agreements, making transactions, or creating business entities.

If any part of this Act is found to be invalid or unconstitutional, the rest of the Act will still stay in effect and continue to apply to everyone and every situation as intended.