| ▲ | philipwhiuk 10 hours ago |
| Leveraged buyout should be illegal. |
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| ▲ | elevation 10 hours ago | parent | next [-] |
| How would you phrase this though? Plenty of PE firms have the funds to buy your local veterinary clinic or auto body shop with cash; the leverage comes later, when they direct the business that they own to get a loan. How can you make it illegal for the business to get a loan? |
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| ▲ | yread 9 hours ago | parent [-] | | > How can you make it illegal for the business to get a loan? That would also be legal. But if you take the assets out of the daughter company you would go to prison for
https://web.archive.org/web/20141030194421/http://www.sfo.go... | | |
| ▲ | elevation 9 hours ago | parent [-] | | The daughter company would presumable be allowed to purchase goods and services. What prevents those goods and services from being supplied (at a hefty markup) by another company under PE control? | | |
| ▲ | yread 9 hours ago | parent [-] | | If it's done for the purpose of defrauding debtors of the daughter company, the law |
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| ▲ | hylaride 10 hours ago | parent | prev [-] |
| I think they should be perfectly legal, but there probably shouldn't be tax advantages for it (carried interest rule, etc). |
