Debt Loading

Like carbo loading, only for corporations. And much, much worse.

There's a particular scam used by mobsters that you'll see in movies and on TV shows referred to as "busting a joint out." (You can see it at work in both Goodfellas and The Sopranos). Basically, the mob gets its hooks into some business owner, uses their business credit to buy stuff, sells the stuff out the back door at a steep discount and then, rather than paying back the debts, lets the business go under. Debt loading represents the white collar equivalent of busting a joint out.

Under a debt loading scheme, managers or owners purposely run up a company's debt. Then use the cash for their own ends, before eventually filing for bankruptcy. At that point, the money is spent, leaving lenders holding the bag. Bad. Things. Happen. The end.