Who? Easy: banks. Bank debt generally has first call in the event of a liquidation, so if everything goes to hell the assets will be liquidated and banks will b

Who? Easy: banks. Bank debt generally has first call in the event of a liquidation, so if everything goes to hell the assets will be liquidated and banks will be the first to be paid back. They likely don't end up losing a lot, if anything at all. The article makes it seem super obvious that these deals won't work out. But that is actually not the case. Many / most PE deals actually do work out, and end up making the sponsors a lot of money. And why would banks allow this? Because private equity are huge profit drivers. They use lots of debt. They also acquire many companies, so there is an ongoing relationship.