Failed LBOs, Recovering Payments To Shareholders

Law360, New York (January 5, 2009, 12:00 AM EST) -- As the financial crisis continues to work its way through the economy, we will likely see failed leveraged buyouts increasingly scrutinized by unsecured creditors committees in an effort to maximize the recovery to their constituents.

As such, this is a good opportunity to review the implications of the 11 U.S.C. § 546(e) (Title 11) for the efforts by committees to recover payments to shareholders from an LBO as constructive fraudulent transfers.

LBOs In General

In its simplest terms, an LBO is a transaction in which a...
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