Questions About Barbarians at the Gate: The Fall of RJR Nabisco

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Seems that leveraged buy-outs are usually bad for society. Greed at RJR Nabisco and Anchor Hocking (Glass House) destroyed Lancaster while making Wall St dirty rich. Recently KKR agreed on buy-out of WebMD. Are there no law or SEC regulation to stop this? [admittedly not strictly a book question]

Dan Walker I'm not familiar with the Anchor Hocking LBO, however from Barbarians it does not appear to me that LBOs are bad for society. An undervalued stock inc…moreI'm not familiar with the Anchor Hocking LBO, however from Barbarians it does not appear to me that LBOs are bad for society. An undervalued stock increased approximately 70% in value in about 2 months: nearly $2B in checks were mailed to residents of Winston-Salem after it was all done. Need to do some more research, but the last article I read in the 90s on the RJR Nabisco buyout maintained that KKR would make only an average return on its buyout. If there is anything wrong with LBOs, IMO it would be that so much money is concentrated in such a small place - Wall Street. However, SEC regs only make things worse by creating barriers to entry for competitors.(less)

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