If the technology downturn marked the downfall of many a reckless venture capitalist, it's clear that the crisis following the Great Buyout Boom of 2005 to 2007 has been immensely damaging to private equity. Riding an unprecedented liquidity wave underpinning the leveraged buyout markets, many of PE's smartest investors took ever-bolder strokes with ever-larger risks. And their trusted limited partners, buoyed by lucrative distributions, bought into the bravado that not a few high-priced LBOs hinted at, many of them pouring heaps of money into war chests but also throwing side bets as co-investors.

No surprise then that outsized ambitions have turned to outsized disappointments. Much handwringing has transpired as values plummet and equity evaporates. The pace of defaults and bankruptcies has quickened. And absent financing, exits have all but vanished.

Yet, as our Private Equity Deals of the Year illustrate, it isn't all black and white, nor red, all over. As usual, we're not just looking at the biggest or most profitable deals; we're searching for the most significant. Too much debt was a common theme, but by no means the only one. Noteworthy buyouts over the past 12 months cover the gamut, from crushing losses to embarrassing lapses in due diligence to heartbreaking industry ills to happiness postponed to -- yes! -- even a few profitable exits.

David Carey's reassessment of Cerberus Capital Management LP's grand hopes for Chrysler LLC (see "Car chase") focuses on a deal that was almost as epic in scale and ambition as it was in the sheer amount of capital pumped into the carmaker -- though the egos behind all this were no less gargantuan. But Cerberus was not the only skilled turnaround maven that met its comeuppance in the financial turmoil and economic recession.

Financial services wiz J. Christopher Flowers had the pedigree that once placed him among the most successful rescuers of troubled banks, but he faltered in his efforts at Germany's Hypo Real Estate Holding AG (see "Second time around"). TPG Capital, no slouch when it comes to distressed investing, bet on aluminum maker Aleris International Inc. (see "The risks of derisking") but did not anticipate the steep collapse in prices, compounded by excessive debt. Another turnaround specialist, Sun Capital Partners Inc., whose name has figured behind many a Chapter 11 filing of late, took another hit when auto parts supplier Mark IV Industries Inc. (see "Road to perdition") rolled into bankruptcy in April.

In perhaps the year's most unusual turn in bankruptcy restructurings, Microsoft Corp. co-founder Paul Allen found himself and Charter Communications Inc. noteholders in a crossover group expecting to play a crucial role post-bankruptcy (see "Crossover appeal"). Bizarre as the situation may seem, SemGroup LP, backed by joint venture partners Carlyle Group and Riverstone Holdings LLC demonstrates the consequences of unqualified trust (see "Fatal attraction").

The dramatic -- albeit limited -- comeback of the go-shop clause (see "Go shop till you drop") in private equity take-privates was also significant in at least two instances. And the tale of four newspapers, the Chicago Tribune, the Star Tribune and two Philadelphia newspapers, encapsulates all that's bedeviled the newspaper industry in recent years (see "Transactions from hell").

It wasn't all doom and gloom. Patience has paid off for TPG's Newbridge Capital affiliate, which if all goes well finally stands to reap impressive gains from its investment in China's Shenzhen Development Bank Co. Ltd. (see "Hard-won from start to finish"), a sign that LBO firms' continued interest in Asia's growth markets isn't altogether unjustified. Initial public offerings were also rare, but solar equipment maker GT Solar International Inc. (see "Bright light"), owned by GFI Energy Ventures LLC and Oaktree Capital Management LP, was an exception.

How private equity folks and their portfolio companies will fare in this recession only time will tell. If the past 12 months are any indication, there will be more pain and paltry profits, if at all. Private equity investors may ultimately turn adversity into opportunity, as they've been shown to do in times of distress, but somehow their wizardry in profiting from them appears to greatly exceed their capacity to learn from them. So much for smarts.