That's true when the debt is taken it is taken by the company (at the direction of the acquiring firm)... and maybe the bigger issue is that banks should be a whole lot more judicious in extending that debt. But some firms have found a heck of a loophole in buying a company, running an extremely high debt line, paying the acquiring firm (themselves) handsomely and then innocently whistling when the business collapses and a bunch of real economic value is erased.

Doing that to a company isn't an activity that should be rewarded since you're destroying, rather than creating, economic value. It is absolutely an exploit or flaw in our system and no more than one person should have been able to get away with it.

Do you think non-recourse mortgage (the dominant type in USA) also should be banned? VC finds a bank that borrows them money to buy X, with X as collateral. It is exactly the same. The mass selloff of assets and absurd cost-cutting is caused by new owners not giving a damn about the future of acquired company, its workers nor clients - it has nothing to do with leveraged buyout itself.