Active investors, LBOs, and the privatization of bankruptcy.

The text discusses the impact of leveraged buyouts (LBOs) on corporate control transactions in the U.S. economy, highlighting the role of active investors in monitoring management and driving strategic direction. It explores the benefits and controversies surrounding LBOs, emphasizing the real increases in productivity and value for shareholders. The text also delves into the use of high leverage in LBOs, the privatization of bankruptcy, and the potential benefits of removing tax-induced biases towards debt. Overall, the text provides insights into the evolving organizational forms and incentives in corporate finance, emphasizing the need for further research and policy considerations in this area. [Extracted from the article]