Leveraged Dividend Recapitalizations | Practical Law

Leveraged Dividend Recapitalizations | Practical Law

A Practice Note examining leveraged dividend recapitalizations (including debt-financed stock dividends and stock redemption or repurchase transactions) used as an exit strategy for private equity sponsors to achieve partial liquidity in portfolio company investments. This Note explains the key structuring and tax considerations, the issues and potential risks in these transactions, and requirements under applicable Delaware law.

Leveraged Dividend Recapitalizations

Practical Law Practice Note 0-506-7108 (Approx. 21 pages)

Leveraged Dividend Recapitalizations

by Douglas P. Warner, Michael E. Weisser and Joshua E. Peck, Weil, Gotshal & Manges LLP with Practical Law Corporate and Securities
MaintainedDelaware, USA (National/Federal)
A Practice Note examining leveraged dividend recapitalizations (including debt-financed stock dividends and stock redemption or repurchase transactions) used as an exit strategy for private equity sponsors to achieve partial liquidity in portfolio company investments. This Note explains the key structuring and tax considerations, the issues and potential risks in these transactions, and requirements under applicable Delaware law.