ABSTRACT
The misuse of leveraged buy outs (LBOs) in the 1980s is probably best illustrated by Robert Campeau who borrowed nearly 10 billion-that’s 10 with nine zeros-from professional, experienced financiers, with no apparent strategically-based business plan to enable repayment. The blatant abuse of the financial system underlying this transaction is evidenced by the roughly $1 billion that went to lawyers, accountants, and investment bankers for the “invaluable services” in closing this megadeal-services that convinced future creditors that Campeau’s $10 billion loan was indeed credible.
