[Ajedi32]

Fair point, it's a corporation taking out the loan so there's nobody to go after if the company goes under the way there is if the value of your house tanks and you stop paying your mortgage. But doesn't the bank take that risk into account when deciding whether to issue the loan? Why should that be illegal?

[awakeasleep]

The way I’m reading your question, it seems like you are looking for the law to follow philosophically consistent principles.

That is simply not the case and lawmakers can make any kind of law to shape the society how we wish. If leveraged buyouts are creating problems for the country, then it’s totally valid to make them illegal in certain cases.

[Ajedi32]

The question I'm asking is: what problem? If a bank takes a risk and that risk doesn't pay off how exactly is that society's problem?

And yes, I do think laws should be based on consistent principles. I'm surprised you consider that a controversial point...

[TSiege]

The problem is that people can take loans without financial liability (not how home purchases work) and drive profitable businesses (which are good for the economy) into the ground (bad for the economy and society).

No one is worried about the bank making the loan in this situation. They are concerned that PE is buying up large parts of the economy using debt they aren't responsible for, which makes them irresponsible owners because they do not face consequences when the moves fail

[Ajedi32]

> which makes them irresponsible owners because they do not face consequences when the moves fail

Again, isn't that entirely the bank's problem? They're responsible for the debt if the company can't pay it, right? I agree on the surface this seems like a bad deal for the bank, but what makes you think you know better than the bank so much so that they shouldn't even be allowed to take that risk?

[floxy]

>I do think laws should be based on consistent principles.

https://repository.law.wisc.edu/s/uwlaw/item/27617