• Liability is clear, but how much will be paid?
• Future of acquisition finance hangs in the balance
Private equity specialists disagree on whether the credit squeeze will mean the end of covenant-lite loans. But they agree on one thing: the potential for litigation from failed commitments is huge.
"There are lots of deals hanging around the shop," says one leveraged finance partner in New York. "Some of them look like potential train wrecks."
An impasse has been reached on many big deals (banks are reported to have committed more than $300 billion to private buyouts). Partners arriving back from their holidays in the US say many deals are...