In April, Staples' private equity owner, Sycamore Partners, paid itself a $1 billion dividend ahead of a possible IPO for the office supplies giant. It was paid for through a loan that will, as these things go, stay with Staples and add $130 million in annual interest costs. Bloomberg noted the size of the debt-financed dividend to Sycamore "left even seasoned leveraged-buyout experts agog."

The eye-popping figure grabbed headlines, but it is a relative footnote in the history of private equity's checkered relationship with the retail industry. The private equity owners of Payless, Toys R Us, and others have come under scrutiny in bankruptcy cases over allegations they moved money out of those retailers and into their own pockets.

But if Staples is any indication, private equity hasn't been subdued by the court tussles. One reason may be that, as Craig Solomon Ganz, a partner Ballard Spahr, noted, it is difficult to prove in court that a private equity firm knowingly ran a company into the ground while stripping out value for itself.

Read the full article here. Subscription may be required.