This house would require private equity firms to assume the entirety of the debt obligations assumed during leveraged buyouts
Most private equity firms acquire companies through Leveraged Buyouts (LBOs) which involves borrowing a large proportion of the money needed to purchase a company and paying it off through the income generated by the company's operations. The debt obligations are typically forced onto the company being acquired, meaning the private equity firm itself is not liable for any potential default and its credit worthiness is unaffected.