Abstract

The recent global financial crisis and economic recession has generated renewed inquiry into and debate over optimal regulation of financial sectors. One such topic of interest concerns how to define, monitor, and regulate the responsibilities of private equity investors. Waves of private equity acquisitions have occurred since the 1980s. The more negative aspects of private equity investment are now under renewed scrutiny. The topic has wide scope, including the recent GM and Chrysler situations. A recent lawsuit by Mervyn’s LLC, a retail department chain operating mostly in California, filed against its private equity owners highlights some of the complex issues in this topic area. The paper examines the Mervyn’s situation based on public information; and places the lawsuit in the broader scope of the topic area. The paper examines the Chrysler situation based on public information; and reports the changes in Chrysler ownership.