you see this in the UK water companies

PE buys some operation, loads it up with debt and then pays dividends to itself directly from that borrowed money (via a chain of subsidiaries)

it continues doing this until the company debt situation becomes unsustainable, then dumps the company on clueless investors (e.g. state pension funds)

paying dividends from debt is illegal, but apparently not if you launder it through enough subsidiaries in different countries

this is essentially exploiting a design flaw in capitalism