January 2018
The "Devil's Dictionary" is a quick-reference guide for commercial lenders and other restructuring professionals. In this series, we highlight many of the buzz words found in the Dictionary and used in today's bankruptcy arena.

LEVERAGED BUY-OUT (LBOs): A transaction in which the buyer of a debtor gains control of the debtor by purchasing the equity of the debtor with borrowed funds, securing the loan by granting the lender a lien on the assets of the debtor. Leveraged buy-outs are often attacked in bankruptcy as fraudulent transfers based on the theory that the debtor did not receive reasonably equivalent value in exchange for the creation of the lien on the debtor’s assets to secure the loan.

Bankruptcy Code § 548(a). See also Fraudulent Transfer, Reasonably Equivalent Value.

The "Devil's Dictionary" is an excellent reference tool that reflects the collective wisdom of its four authors, Brett Anders, Jim Bird, David Ferguson, Dan Flanigan, and digital editor, Christopher Ward, who have a combined total of more than 130 years working in the forefront of real estate and other commercial finance, loan enforcement, financial restructuring and bankruptcy law.