Leveraged buyouts are not like mortgages

The article critiques leveraged buyouts (LBOs), arguing they are fundamentally different from mortgages and are often deceptive financial practices. It describes LBOs as a process where corporate raiders and investment banks target companies with valuable assets, using those assets as collateral to secure loans for purchasing the company. The process involves convincing a minority of shareholders to sell the company, often relying on the disengagement of many investors. Once acquired, the new owners typically strip the company of its assets, leading to layoffs and financial instability, all while using euphemistic language to mask their actions. The author compares LBOs to scams like heirs property and quiet title actions, which exploit vulnerable owners. The piece emphasizes that private equity firms, which engage in these practices, are essentially committing fraud under the guise of legitimate business operations. The article concludes that the obfuscation in financial jargon allows these practices to persist, harming the real economy and its stakeholders.

- Leveraged buyouts are characterized as deceptive practices that exploit companies and their assets.

- The process relies on convincing a minority of shareholders to sell, often taking advantage of disengaged investors.

- Private equity firms are compared to scammers, stripping companies of value while using euphemisms to disguise their actions.

- The article argues that the financial jargon surrounding LBOs serves to obscure the true nature of these transactions.

- There is a call for greater awareness and action against the harmful practices of private equity in the economy.