Ending Fossil Fuel Bailouts Act of 2026

Protection of Worker Wages: Section 3(b) gives top priority to the unpaid wages, salaries, commissions, and benefits of regular employees over other claims when a fossil fuel company files for bankruptcy. This is a positive step because it ensures working people get paid what they earned before executive bonuses or other debts are settled.

• Mandatory Environmental Cleanup: Section 3(a) and Section 3(b) require trustees to treat all accumulated and projected environmental reclamation costs as necessary expenses that must be paid using the company's secured property. This benefits the public by forcing bankrupt companies to pay for the complete cleanup of their operations and the retirement of their assets.

• Accountability for Wealthy Investors: Section 3(f) holds parent companies, private equity firms, and hedge funds strictly liable under joint and several liability rules if a bankrupt fossil fuel company lacks enough funds to cover employee wages and environmental cleanup costs. This is a positive measure for taxpayers because it stops wealthy backers from walking away scot-free while leaving the public to foot the cleanup bill.

• Stopping Abandoned Polluted Sites: Section 5 adds a new rule stating that no property of the estate may be abandoned if it was or may be used for fossil fuel operations. This protects communities by preventing bankrupt companies from leaving behind dangerous, unwanted industrial sites.

Increased Financial Risk for Lenders and Investors: Section 3(a) and Section 3(b) place environmental cleanup costs above other secured and unsecured claims, and Section 3(f) holds parent companies, private equity firms, and hedge funds strictly liable for these costs. While good for cleanup, these provisions might make it much harder and more expensive for energy companies to secure loans or investments, which could indirectly impact energy markets.

• Restrictions on Lease Transfers: Section 7 prohibits a leaseholder from transferring certain oil, gas, or coal leases to another person if the lessee has filed for bankruptcy. This could create roadblocks in the bankruptcy process by stopping standard business restructuring and sales that might otherwise keep a company afloat.