Elizabeth Warren Declares War on Private Equity and Our Economy

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Some private equity-backed companies, like Toys R Us, have filed for bankruptcy and workers protesting for months about severance pay have given Senator Warren an opportunity to tar all private equity firms with the same brush. She is rewriting bankruptcy law for private equity, including giving severance pay and pension contributions more priority in the creditor hierarchy.

The Warren bill also requires private equity funds to publicly disclose their fees and performance. Most private equity managers already disclose such information to investment partners. With this proposal, Senator Warren is trying to please union pension funds, giving them more leverage over private equity funds when making investment decisions. The irony of the situation is that public pension funds have been increasing investments in private equity funds in order to finance generous worker retirements.

Reactions to the bill and consequences it could have

 Private industry trade group, the American Investment Council, hit out against the bill on Twitter, saying that it would hurt workers, investment and the economy. It pointed out that 396,597 workers in Massachusetts rely on private equity to support their jobs. They see private equity firms as an engine for American growth and innovation.

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Charles Laverty
Charles Laverty is a contributing writer to USA Herald and entrepreneur focused on health along with wellness. Charles passion is writing and has a knack for covering tough stories that other journalists shy away from, including but not limited to the fitness industry's profiteering over fixing the obestity epidemic. Charles Laverty is an advocate for health, wellness, and fitness. He has a knack for calling out government for bad policies, incompetence, and anti-democratic actions.