Transakcje lewarowane a ustawowe mechanizmy ochrony praw wierzycieli finansowych

Abstract

A leveraged transaction is a legal phenomenon in which a corporation (the ‘target’) becomes encumbered with debt incurred in order to fund a payout to its shareholders. The essence of a leveraged transaction is the substitution of debt in place of the corporation’s equity, ie the inverse of a debt to equity swap. A leveraged transaction increases the target’s indebtedness without changing its assets, resulting in a higher debt-to-assets leverage ratio of the corporation. Leveraged transactions amplify the insolvency risk of their targets. Following the transaction, the corporation has the same asset base which can be used to generate cash flows, but at the same time it has larger debts which burden it with additional financial costs. Thus, the statistical dispersion of the corporation’s financial results is increased, which entails two mutually coupled consequences: on the one hand, the probability that the shareholders achieve higher rates of return on investment increases, but on the other hand the probability that the corporation will lose its solvency also increases. The dissertation focuses on external costs (negative externalities) suffered by existing creditors of corporations undergoing leveraged transactions. The statutory legal mechanisms for minimizing those externalities are analyzed from an law & economics perspective.