LBOs are much worse than that. It's like buying a rental property where the mortgage is owed by the a shell corporation that owns the property. The shell corporation, not the purchaser, owes the debt.

It's like taking out a mortgage on a house, but letting the house owe the debt.

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PopAlongKid 9 hours ago | parent | next [-]

>It's like taking out a mortgage on a house, but letting the house owe the debt.

Isn't that a non-recourse loan, which in some states is the default for the initial loan to acquire the housel

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randallsquared 9 hours ago | parent | prev [-]

When you put it like that, you make it sound reasonable! The house being collateral for the debt seems in a blurry way to be "the house owes the debt".

	▲	nyeah 8 hours ago \| parent [-]
		That's pretty blurry, though. Blurry enough that we don't distinguish between the collateral and the borrower.