It's not risk free for the companies involved. Limited liability protects private assets which is the original motivator behind all of this. And yes, there could be alot of book cooking going on to extracting liquidity. Over here, we call them locusts, not PE and externalizing risk is kind of their job.

This is the general leap, wealthy dynasties do. They scale up from a regular (family) business that provides services (eg. the clinic) to eventually transition into investors with lesser or indirect motivation of providing services/goods.