Re:Musk’s Twitter Purchase Was a Leveraged Buyout
by sokoloff on Friday November 04, 2022 @01:37PM
(#33470695)
1. In a lot of cases you can "just walk away". These are so-called "non-recourse loans". Some states (12) only permit non-recourse loans for residential real-estate.
2. If you own a company and the company goes bankrupt with bonds (loans) outstanding, the recourse is that the bondholders get control of the company before the shareholders get anything. (This is analogous to the mortgage situation above: the mortgage lender gets the house, become an REO [real-estate owned] on the bank balance sheet.)
2. If you own a company and the company goes bankrupt with bonds (loans) outstanding, the recourse is that the bondholders get control of the company before the shareholders get anything. (This is analogous to the mortgage situation above: the mortgage lender gets the house, become an REO [real-estate owned] on the bank balance sheet.)