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A Better Guard for the Henhouse: Should Creditors’ Committees Control Estate Litigation?
Ellis, Justin Yeh, Ryan
Ellis, Justin
Yeh, Ryan
Abstract
In October 2021, Senator Elizabeth Warren and several cosponsors
introduced a revised version of the Stop Wall Street Looting Act. First
introduced in 2019, the proposed legislation targets a range of perceived abuses
by private equity firms ranging from the carried interest tax “loophole” to the
lack of risk-retention requirements for securitized debt. Among several new
proposals to stop the “looting” of portfolio companies is one of particular interest
to bankruptcy practitioners: giving unsecured creditors’ committees the
exclusive right to bring or settle certain lawsuits in bankruptcy.