{"title":"Private Equity in Distress and the Incentives of Collateralised Loan Obligations","authors":"Sarah Paterson","doi":"10.1093/clp/cuae001","DOIUrl":null,"url":null,"abstract":"\n This article explores the problem that both modern private equity (PE) firms, and collateralised loan obligation (CLO) lenders to PE portfolio companies, have incentives to avoid a formal restructuring of PE portfolio companies in financial distress. The author is concerned that this may lead to negative social costs for suppliers, employees, customers and even government agencies... She explores how and why the problem arises, and the ways in which corporate and corporate insolvency law might be able to respond to it. Some suggestions are made, but it is accepted that any solution involves a sensitive balance that needs to be approached with considerable care.","PeriodicalId":45282,"journal":{"name":"Current Legal Problems","volume":null,"pages":null},"PeriodicalIF":1.4000,"publicationDate":"2024-03-29","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"0","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"Current Legal Problems","FirstCategoryId":"90","ListUrlMain":"https://doi.org/10.1093/clp/cuae001","RegionNum":2,"RegionCategory":"社会学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"Q1","JCRName":"LAW","Score":null,"Total":0}
引用次数: 0
Abstract
This article explores the problem that both modern private equity (PE) firms, and collateralised loan obligation (CLO) lenders to PE portfolio companies, have incentives to avoid a formal restructuring of PE portfolio companies in financial distress. The author is concerned that this may lead to negative social costs for suppliers, employees, customers and even government agencies... She explores how and why the problem arises, and the ways in which corporate and corporate insolvency law might be able to respond to it. Some suggestions are made, but it is accepted that any solution involves a sensitive balance that needs to be approached with considerable care.
期刊介绍:
The lectures are public, delivered on a weekly basis and chaired by members of the judiciary. CLP features scholarly articles that offer a critical analysis of important current legal issues. It covers all areas of legal scholarship and features a wide range of methodological approaches to law.