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As Congress heads toward its summer recess, Oaktree Capital Group LLC is urging lawmakers not to cut any back-room Washington, D.C., deals that help its opponents in a fight over Caesars Entertainment Corp. with billions of dollars at stake, Bloomberg News reported yesterday. Oaktree is expressing concern that Apollo Global Management LLC and TPG Capital Management — the private equity firms that own Caesars — will persuade lawmakers to slip a provision related to the Las Vegas-based casino operator into a broader bill, according to documents obtained by Bloomberg. Potential outlets could include Congress’s response to the Puerto Rico debt crisis or legislation to keep the Federal Aviation Administration in business ahead of a July deadline. “We understand that Caesars and its sponsors are now again asking Congress to approve the” provision, Oaktree Vice Chairman John Frank wrote in a May 18 letter to House Speaker Paul Ryan and Minority Leader Nancy Pelosi. Since no stand-alone legislation has been proposed, “we are left to assume its supporters hope, once again, to add the rider to a ‘must-pass’ bill,” he wrote. The dispute is centered on the Trust Indenture Act, a Depression-era law meant to protect the rights of bond investors. Caesars and its owners want new legislation to counter a court ruling they say distorts the act’s original intent and gives holdout bondholders too much power in restructuring talks. Read more.

Listen to an ABI podcast from December 2015 between ABI Resident Scholar Prof. Melissa Jacoby and Prof. Mark Roe of Harvard Law School talking about legislative action at the time on a proposed omnibus appropriations rider that would amend the Trust Indenture Act of 1939. The proposed language was not included after opposition by stakeholders and academics. 

The New Jersey legislature yesterday approved a rescue package to lift Atlantic City out of its fiscal distress and give the struggling gambling hub more time to craft a recovery plan before facing a possible state takeover, Reuters reported. The compromise came after weeks of rancor between lawmakers, local officials and Governor Chris Christie (R) over the magnitude of state control. A Christie spokesman did not reply to a request for comment on whether the governor would sign the legislation. Christie told a local radio show on Wednesday night that he believed the measures give him "all of the authority I would need" and that he would decide quickly. Increased gambling competition in neighboring states has cut into Atlantic City's main source of tax revenue, and the decline in casino property values since 2010 has lowered the tax base a whopping 70 percent. Four of the city's 12 casinos closed in 2014 and remain shuttered. The latest bills retain key measures from previous legislation, but they give the seaside resort town more time — 150 days — to craft a balanced budget and five-year recovery plan before facing state takeover. The bills call for casinos to make $120 million of combined payments annually in lieu of property taxes for 10 years. Casinos are also to make additional lump-sum payments totaling as much as $110 million through 2023. Some alternative casino taxes would also be redirected to pay city debt service. In addition, the city could offer incentives for early retirement and delay for another year any repayment plan for its deferred pension and health benefit payments to the state.

The Senate yesterday voted to consider a joint resolution that would block implementation of the Obama administration’s retirement advice rule, MorningConsult.com reported. The voice vote allows senators up to 10 hours of debate before voting on H.J. Res. 88, which the House adopted 234-183 last month. The resolution, sponsored by Rep. Phil Roe (R-Tenn.), is a formal rebuke, under the Congressional Review Act, of the Labor Department’s fiduciary rule. The White House issued a veto threat ahead of the House vote on April 28. The House vote tally did not meet the two-thirds majority that would be needed to override a presidential veto. The Senate has not taken action on a companion measure, S. J. Res. 33, introduced by Sen. Johnny Isakson (R-Ga.).

The agreement on May 19 between House Speaker Paul D. Ryan (R-Wis.) and the Obama administration on a measure to help Puerto Rico out of its debt crisis presents an obvious and urgently needed plan for the territory, according to a Washington Post editorial on Friday. Neither House Speaker Paul Ryan nor the Treasury Department ever contemplated using federal taxpayer funds to pay off debts incurred by the island’s government, which has been justly accused of taking a bad economy and making it worse through mismanagement and, in some cases, corruption, according to the editorial. Creditors may be bought out at a discount, giving Puerto Rico financial breathing room, in return for which the island will have to make structural reforms so it can meet reduced obligations and restart growth. Legislation to make this possible has been crafted pursuant to Congress’s constitutional authority to make laws for the territories, thus debunking another of the opponents’ claims: that a bill would set a debt-escape precedent for fiscally irresponsible states. The bill would also put a temporary halt to lawsuits by creditors and put an oversight board, appointed on a bipartisan basis by Congress and the president, in charge of Puerto Rico’s finances.

The House Financial Services Financial Institutions and Consumer Credit Subcommittee will hold a hearing today at 2 p.m. ET titled “Examining the CFPB’s Proposed Rulemaking on Arbitration: Is it in the Public Interest and for the Protection of Consumers?” Click here for the hearing witness list, committee memo and prepared testimony.