Kutak Rock partner Mitch Woolery authored the article, “Should We Ask Van Helsing to Help with the Private Equity Vampire?” for the Fall 2019 issue of Preferred Returns.

The article reports that according to U.S. Senator Elizabeth Warren and others, private equity (PE) firms are “vampires” because they engage in “bleeding the company dry and walking away enriched even as the company succumbs.” Critics allege PE firms suck millions of dollars from its victims through management fees and other payments, and that once bankruptcy is filed, PE walks away with its cash, stiffing supplies, customers and employees.

According to the article, in the proposed “Stop Wall Street Looting Act” (the “Looting Act”), Sen. Warren and her co-sponsors propose exposing certain private equity groups to unlimited liability. This article addresses the issues of limited and unlimited liability and then specifically applies the Looting Act’s remedy of unlimited liability to the Toys-R-Us bankruptcy. Mr. Woolery concludes that the unlimited liability remedy would not have saved Toys-R-Us, and the jobs probably would have been lost in any event.

Mitch Woolery is one of the leaders of the firm’s national Mergers & Acquisitions group and is a member of the national tax groups. He serves as lead counsel to public and private companies, private equity groups and investors in numerous complex multimillion-dollar mergers, acquisitions, recapitalizations and financings.

Should We Ask Van Helsing to Help with the Private Equity Vampire?