"When Bain borrows all of that money from the bank, it's the target company that ends up on the hook for all of the debt." WTF? How... what?
@nothings @renderwonk Sean, it usually _does_ involve a new company in this fashion, as far as I know. See http://macabacus.com/valuation/lbo/overview …
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@cmuratori@renderwonk But then somehow the acquirer manages to pull money out of that dummy corp to original without exposing self to suit? -
@nothings@renderwonk They don't have to do anything fancy. The "shareholders" just vote to pay distributions to the parent company. - Show replies
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@cmuratori@renderwonk Another question: why does anyone still loan them money if they always assign the debt to someone who can't pay it? -
@nothings@renderwonk Well, this is the "new finance" that brought you the crash of 2k8. It's about fees and m2m! Nobody cares long-term. - Show replies
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