HillRat
Joined 13 years ago
Joined 13 years ago
There are various proposals to deal with this, but the most effective are probably imposing joint and several liability on certain kinds of litigation (breaking the "investor veil" and allowing rights of action against PE funds for the actions of their portcos) and limiting business judgment rule protection for directors and senior managers who approve LBO sales that are reasonably foreseeable to end in bankruptcy, which creates personal liability for fiduciaries. In other words, align the financial and personal interests of the individuals and companies involved with those of the acquired entity.
The corporate world is, of course, even more prone to this; it's where the military got it from, after all. Slice out every jargonized adjective or verb from a proposal deck and see how little is often left, and how little it really addresses the user concerns.