"PE firms load acquired companies with debt, cut costs aggressively, then resell at a profit"

The last part never made sense to be. Where do they find willing buyers for these debt laden, hollowed out husks?

That's where the scam is. They sell to their pension fund and mutual fund buddies, and in return when they get a really good deal, those funds will be first in line. It's a scratch-my-back-scratch-yours kind of deal that is utterly corrupt but no one seems to care because the losses are papered over by these huge funds.