Cardozo Law Review
Abstract
Leveraged buyouts bring about concentration of a corporation's ownership in the hands of a few stockholders. This permits the stockholders to control the corporation with the incentive to operate it efficiently in order to realize the entire profit for themselves. Such a joinder of control and ownership, however, is produced at great cost to the corporation, which provides most of the funds used to purchase the stock from the selling shareholders. There is, therefore, the danger of prejudice to a non-stockholder constituency-the corporation's creditors, employees, customers, and the community in which it is located. It is the thesis of this Article that principles of fraudulent transfer law and corporate law support numerous causes of action for the protection of this constituency when a leveraged buyout so ravages the corporation that it is left insolvent or with a capitalization that makes insolvency likely in the future.
Keywords
Bankruptcy Law, Bankruptcy, Corporations, Tender Offers, Investment, Banking and Finance Law
Recommended Citation
James F. Queenan Jr.,
The Collapsed Leveraged Buyout and the Trustee in Bankruptcy,
11
Cardozo L. Rev.
1
(1989).
https://larc.cardozo.yu.edu/clr/vol11/iss1/3