Comment by outop
2 years ago
Your first point: this would obviously be serious fraud. I'm not sure if you have any evidence of this in this particular case or is you are alleging this is standard practice by PE funds?
Your second point: why would someone lend money to a company which was going to go bankrupt? If PE firms always made the companies they controlled bankrupt, no one would lend to them.
Your third point: if someone buys a company from you, how does it make you a creditor of the bought company?
It’s not fraud if the sales are advertised and fair… even if they’re not widely publicized. But that was just spitballing.
For 2), people loan to the PE firm because they extract all the value for themselves. Their creditors get paid. People who loan to PE-controlled firms don’t seem terribly wise to me, but maybe they can model them like junk bonds.
For 3), if the firm buys one of your clients, be cautious.