The Southern District of New York bankruptcy judge whose notable cases includes the Purdue Pharma restructuring used his parting ruling after two decades on the bench to call on Congress to tighten laws that he says give private equity a “broad free pass” to plunder businesses.
U.S. Bankruptcy Judge Robert Drain allowed a trustee in the bankruptcy for upstate New York grocery store chain Tops Market to proceed with a lawsuit alleging that Morgan Stanley, which had a controlling stake in Tops from 2007 to 2013, and other investors pushed Tops into Chapter 11 proceedings by paying themselves more than $375 million in stock dividends while neglecting to address the chain’s unfunded pension liabilities.
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