11 MAY 2010
The contested draft EU hedge funds and private equity law has hit another snag as MEPs quarrel over whether private equity takeovers should be stripping their target companies' assets from the ground up.
A vote on the draft Alternative Investment Funds Managers Directive has been postponed as the European Parliament's economics committee (ECON) and the legal affairs committee (JURI) disagree on how much scope private equity firms should have in company takeovers.
In essence, the ECON committee is seeking to restrict so-called 'asset stripping' in private equity takeovers to ensure the long-term health of companies, while JURI wants to leave current rules in the draft directive as they are.
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