[gruez]

>you're still personally on the hook for any post-foreclosure deficiency judgment

Depends on the state: https://www.financialsamurai.com/non-recourse-states-walk-aw...

>both by shielding the PE fund from debts and the use of bankruptcy and restructuring of the acquired company to discharge liabilities, including those from litigation.

Who's extending credit to these companies? Individuals can do something similar by declaring bankruptcy. I think banks can be considered sophisticated enough that if they got hosed on a LBO deal, that it's hard to feel sympathy for them.

[greycol]

The people doing the lending can still make a profit. They get their interest payments and have a secured debt against the company. I.e. If interest and repayments until time of bankruptcy + liquidation of assets at bankruptcy is more than you'd get investing elsewhere at lower risk it's still a good investment. It's the other stakeholders (employees/community/unsecured debtors) that lose out.

[vkou]

The employees and the community are irrelevant in our society. The owner of capital decides what to do with that capital. You don't get a vote.