Also a similar "technique" (LBO to be exact) was used to break down a giant company into smaller companies, effectively shutting down monopolies at the expense of a small number of workers, often making big gain for investors. With the failure of RBR Nabisco LBO, investors think twice about this kind of venture nowaday. If Toys'R US failure could cost the investors a bulk of money, maybe this won't happen anymore with big business like this.
Anyway, if you take part of venture like this, you better be the law firm or the executives, especially if your target is a big company.
The question was more: why does the law allow this? They are using one company to benefit another, then leaving it in debt without financial liability. Seems like a gaping loophole in the law there.
Also a similar "technique" (LBO to be exact) was used to break down a giant company into smaller companies, effectively shutting down monopolies at the expense of a small number of workers, often making big gain for investors. With the failure of RBR Nabisco LBO, investors think twice about this kind of venture nowaday. If Toys'R US failure could cost the investors a bulk of money, maybe this won't happen anymore with big business like this.
Anyway, if you take part of venture like this, you better be the law firm or the executives, especially if your target is a big company.