Buying a company with borrowed funds and using the company's cash flows or assets to repay the loan is known as a Leveraged Buy Out (LBO) [0]. It was very trend

Buying a company with borrowed funds and using the company's cash flows or assets to repay the loan is known as a Leveraged Buy Out (LBO) [0]. It was very trendy in the 1980s but has recently made a comeback. A good book to read on one of the most notorious examples of an LBO is Barbarians at the Gate [1][2] which dealt with the takeover of RJR Nabisco, a large American food and tobacco company. For lighter fare, re-watch the 1990 movie Pretty Woman [3][4] but this time ignore the fluffy romance and focus on Richard Gere's character, Edward Lewis, as he goes about negotiating the LBO of a shipbuilding company. Edward Lewis was modeled on a real-life LBO guy, Reginald Lewis, who bought Beatrice International Foods from Beatrice Companies in 1987 in an LBO worth $985 million [5]. [0] https://en.wikipedia.org/wiki/Leveraged_buy_out https://en.wikipedia.org/wiki/Leveraged_buy_out [1] https://en.wikipedia.org/wiki/Barbarians_at_the_Gate:_The_Fall_of_RJR_Nabisco https://en.wikipedia.org/wiki/Barbarians_at_the_Gate:_The_Fa... [2] http://amzn.com/0061655554 http://amzn.com/0061655554 [3] https://en.wikipedia.org/wiki/Pretty_Woman https://en.wikipedia.org/wiki/Pretty_Woman [4] http://www.imdb.com/title/tt0100405/ http://www.imdb.com/title/tt0100405/ [5] https://en.wikipedia.org/wiki/Reginald_Lewis https://en.wikipedia.org/wiki/Reginald_Lewis