Judge Jed S. Rakoff of the U.S. District Court for the Southern District of New York (SDNY) recently issued an opinion in In re Nine West LBO Securities Litigation (Opinion) denying motions to dismiss claims against former directors of Jones Group, Inc. (Jones Group) for breach of fiduciary duty and aiding and abetting fiduciary breaches. The claims against the former directors arise out of their approval of an LBO of Jones Group by a PE firm that allegedly accelerated the company’s eventual insolvency. The Opinion has attracted considerable attention, with some commentators suggesting that it delivers a potential death blow to the fundamental PE model if target company boards risk potential liability for agreeing to levered PE transactions. To understand the potential impact and repercussions of the Opinion, this article summarizes the SDNY’s reasoning, provides insights from attorneys about its realistic implications for PE sponsors and outlines practical steps for minimizing the risks highlighted in the Opinion. For further coverage of other SDNY decisions, see “Court Fines Former Apollo Partner $240K for Misallocating Personal Expenses; Places ‘Significant Blame’ on Firm’s Internal Practices” (Jan. 19, 2021); and “SDNY: In Absence of Attorney-Client Relationship, Communications With Consultants Who Happen to Be Attorneys Are Not Protected” (Oct. 8, 2019).