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by nyeah 29 days ago
LBOs are much worse than that. It's like buying a rental property where the mortgage is owed by the a shell corporation that owns the property. The shell corporation, not the purchaser, owes the debt.

It's like taking out a mortgage on a house, but letting the house owe the debt.
2 comments
PopAlongKid 29 days ago
>It's like taking out a mortgage on a house, but letting the house owe the debt.

Isn't that a non-recourse loan, which in some states is the default for the initial loan to acquire the housel

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randallsquared 29 days ago
When you put it like that, you make it sound reasonable! The house being collateral for the debt seems in a blurry way to be "the house owes the debt".
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nyeah 29 days ago
That's pretty blurry, though. Blurry enough that we don't distinguish between the collateral and the borrower.
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