Plough and Jimmy, The theory is that if the business has unused...

Plough and Jimmy,

The theory is that if the business has unused carried forward losses and the new owner turns the business around and it becomes profitable, generally they won’t pay tax on these profits until the previous losses are used. When the new owner keeps of making losses, the precious losses are no of us, it just continues to be a money pit.

No idea why those who keep lending to prop up the losses see in this business though, but in my experience it is quite common for someone who has been successful in business end up squandering their wealth trying to run a business in a different field to their proven expertise.