How do firms respond to reduced private equity buyout activity?

• Main Author: LO, Yi-hsin
• Format: text
• Language: English
• Published: Institutional Knowledge at Singapore Management University 2022
• Subjects: Private equity; Buyout activity; Firm behavior; Corporate governance; Finance; Finance and Financial Management
• Online Access: https://ink.library.smu.edu.sg/lkcsb_research/7024; https://ink.library.smu.edu.sg/context/lkcsb_research/article/8023/viewcontent/SSRN_id4040663.pdf
• Institution: Singapore Management University

This paper presents new evidence on the economic role of private equity buyouts by exploiting the staggered adoption of the constructive fraud provision by U.S. state courts. The law unintentionally shifts the credit default risk borne by existing unsecured creditors of the buyout target to the sell...