Kaiser Steel Runs Out Of Appeals
Kaiser Steel Resources won't be able to recover $162 million it paid out to shareholders in a 1984 leveraged buyout. Kaiser had claimed that it's entitled to the money because the LBO was a "fraudulent conveyance" of the company and the payout caused its insolvency. But on June 22, the Supreme Court refused to hear Kaiser's appeal of a ruling that had rejected thatargument.
Going private was Kaiser's downfall. Burdened by excessive debt, it filed for bankruptcy protection in 1987. The company sued Wall Street firms that sold their Kaiser stock in the LBO, arguing that the firms should have known the deal would fail. The Supreme Court, though, agreed with the lower court thatthe payments could not berecovered.