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- Title
Ex Ante Review of Leveraged Buyouts.
- Authors
FEMINO, LAURA
- Abstract
Under current bankruptcy law, a leveraged buyout (LBO) that leaves an acquired company insolvent, undercapitalized, or unlikely to be able to pay back its debts may be later avoided as a fraudulent transfer. This regime, intended to protect the target's creditors, requires a post-hoc valuation of the target long after the buyout and suffers from a number of practical, procedural, and policy problems. This Note proposes an alternative regime to supplant constructive fraudulent transfer litigation: an ex ante review of the proposed LBO by a neutral, third-party appraiser. This proposal ameliorates many difficulties inherent in the current regime.
- Subjects
UNITED States; BANKRUPTCY; LEVERAGED buyouts; FRAUDULENT conveyances; DEBTOR &; creditor; LEGAL costs; CORPORATE debt laws; UNITED States. Bankruptcy; LAW; ACTIONS &; defenses (Law)
- Publication
Yale Law Journal, 2014, Vol 123, Issue 6, p1830
- ISSN
0044-0094
- Publication type
Article