Sale leaseback transactions are often marketed as win-win situations — unlocking capital while allowing companies to retain operational control of critical assets. But beneath the surface, these structures can carry significant and sometimes underestimated risks. This panel will take a hard look at the “dark side” of sale leasebacks, exploring how transactions that appear overly rosy at inception can later become the focal point of financial distress and legal battles. The panelists will examine the operational ramifications of sale leasebacks, including constraints on flexibility, long-term cost burdens, and impacts on liquidity and capital adequacy. The discussion also will address litigation risks, particularly claims tied to solvency, ability to pay debts, and allegations of fraudulent conveyance or improper capitalization. As sale leasebacks continue to gain traction — especially in capital-intensive and distressed environments — the panelists will explore why this structure remains attractive and how it is reflected on a company’s financial statements from an accounting and disclosure perspective.
Learning Objectives:
- Attendees will evaluate the operational and financial implications of sale leaseback transactions, including their effects on liquidity, capital adequacy, and long-term cost structure.
- Attendees will analyze the potential restructuring and litigation risks associated with sale leasebacks, including solvency challenges, fraudulent conveyance claims, and disputes over capitalization.
- Attendees will assess how sale leasebacks are structured and presented in financial statements, including key accounting and disclosure considerations that may affect stakeholder interpretation and risk assessment.