But apparently I'm not a rich person so that kind of accounting doesn't apply to me.
In fact most banks will go as high as 80%, especially if the house can rent for the mortgage payment.
And they will definitely do that deal if you’re willing to pay 10% interest.
As I understand it, this works by rounding up potential loans, approaching the board of the company and getting them to sign over ownership of the company for a pittance in return for the shareholders being paid out by the company using the loans you brought in. This feels more like an emergent property of the system (specifically, contract law and how publicly traded companies operate) than how the system is intended to function.
Intuitively this shouldn't be possible as it's acting against the company's own self-interest despite being in the interest of the shareholders (and the buyer), but I think "the company's interest" in practice is defined by "the owners' interest" (and the owners in this case are the shareholders, who sell the company). I guess corporations aren't people after all.
But of course your view is what's reflected in law: the corporation exists to generate profit for its shareholders, so if killing and selling it for scrap (whether directly or by proxy in a leveraged buyout ending in a firesale) provides more benefit to its shareholders than keeping it operating at a small profit, that's the logical decision. The corporation is not really "a person", it's a vehicle for its stakeholders (or shareholders). A stable service puttering along without making big profits or losses is considered the bad ending.
Or maybe they are too much like people. Right now there's a bunch of things that I should be doing, that would be in my best interest - continue with my TODO list, or do some exercises. Instead, I'm browsing HN. This shouldn't be possible, but it is, because I'm a human - what I want to do, what's in my best interest, and what I actually do are three different things, and rarely aligned.
(Ironically, in humans this is usually called an issue with executive functioning, whereas in companies, it's the reverse.)
"Lenders that also include Bank of America, Barclays and Mitsubishi UFJ Financial Group committed to provide $13 billion of debt financing for the deal. Their losses would amount to $500 million or more if the debt were to be sold now, according to Bloomberg calculations."
