No. What you described is liquidation. PE is all about maintaining the pretense of a turnaround so that liquidation proceeds can go to management (the PE firm)

No. What you described is liquidation. PE is all about maintaining the pretense of a turnaround so that liquidation proceeds can go to management (the PE firm) rather than to outstanding obligations or investors/shareholders. It's the white-collar equivalent of walking out with the coffee machine and an aeron chair -- so, naturally, 100x worse and 100x less illegal.