How would you phrase this though? Plenty of PE firms have the funds to buy your local veterinary clinic or auto body shop with cash; the leverage comes later, when they direct the business that they own to get a loan. How can you make it illegal for the business to get a loan?
reply> How can you make it illegal for the business to get a loan?
replyThat would also be legal. But if you take the assets out of the daughter company you would go to prison for https://web.archive.org/web/20141030194421/http://www.sfo.go...
The daughter company would presumable be allowed to purchase goods and services. What prevents those goods and services from being supplied (at a hefty markup) by another company under PE control?
replyIf it's done for the purpose of defrauding debtors of the daughter company, the law
replyI think they should be perfectly legal, but there probably shouldn't be tax advantages for it (carried interest rule, etc).
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