- leveraged buy out
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(LBO) A transaction where a purchaser uses the assets of the corporation to be acquired (target) as collateral for the loan to buy the stock of the target. LBOs stand a significant risk of bankruptcy because, after the transaction, they have little net worth to weather a business downturn. Unsecured creditors of a bankrupt LBO often argue that the lenders and former shareholders received a fraudulent transfer. (Bernstein's Dictionary of Bankruptcy Terminology)
United Glossary of Bankruptcy Terms 2012.
- leveraged buy out
-
A transaction where a purchaser uses the assets of the corporation to be acquired (target) as collateral for the loan to buy the stock of the target. LBOs stand a significant risk of bankruptcy because, after the transaction, they have little net worth to weather a business downturn. Unsecured creditors of a bankrupt LBO often argue that the lenders and former shareholders received a fraudulent transfer.
US Bankruptcy 2012.
Glossary of Bankruptcy.