News analysis: Mervyn’s settlement a warning

Would the bankrupt department store chain’s accusations of ‘fraudulent conveyance’ on the part of its private equity sponsors have stood up in court?

Portfolio companies collapse all the time, but it’s not every day that GPs then pay a nine figure settlement to creditors when the dust settles.

That’s why it caught a lot of people's attention last week when Mervyn’s collected $166 million from Cerberus Capital Management, Sun Capital Partners and other defenders to settle charges they had fated the department store chain to bankruptcy after purchasing the chain for $1.2

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