Basically, the company had to pay for its own buyout when private equity firms KKL, Vornado, and Bain bought the company for $6.6 billion, mostly with loans.
Because the company then had to pay off those extreme loans, they were forced to sell off their assets and property, which they leased back from the very private equity firms that now owned them.
The same thing happened more recently with Red Lobster and JoAnn Fabrics.
TIL: stock buybacks were considered insider trading before Reagan made them legal
Is there anything that Reagan hasn’t fucked?
Did you know companies can take out loans to buy their own stock to raise the value.
Pretty much nothing in “the economy” works like it does in theory. It’s always way more complex so the people with the most power and money can squeeze more exploitation out of it. I really like how this guy explains it
https://www.facebook.com/reel/976701137942045
https://www.youtube.com/shorts/1LcJjd6Wosw
He’s got a whole series on Private Equity
This is like me taking out a loan to buy a car and then expecting the car to make the payment.
And since all the debt is on the company and not the people/organization who bought the company, they don’t suffer any of the repercussions of defaulting on the loans. Why this isn’t illegal is beyond me.
It was illegal, then Reagan changed that.
Because of course it was Reagan.
Elementary my dear billwashere, in one word: money.
People don’t notice the leeches, so noone cries out. This enables said private equity leeches to
bribe politiciansmake considerable donations to various political action committees. And believe it or not, politicians like money.Well, you wouldn’t want those politicians to be poor?
Oh deary me, no, poor politicians would be susceptible to bribes
They told US TARGET killed Geoffrery!!!
What will really shift your thinking is finding out that they have done this to almost all the hospitals in the United States, which is part of the reason healthcare costs have skyrocketed.
Hospitals need more to pay their leases, health insurers need to pay more to feed the hospitals machine, premiums go way up/more services restricted/more cost share (copay etc)
If you think it’s shitty that consumers can’t own anything anymore, they stole your wellbeing services while you were bitching about how little is still on Netflix these days
This is enough reasoning to say that capitalism is the single greatest enemy of mankind. The search for endless profit will kill everyone.
Careful now, they’re about to classify criticism of capitalism terrorism.
Yeah?
Isn’t that the entire thing that private equity firms do? Buy up companies, sell all their assets to the private equity firm, then have them lease it all back for insane amount until it’s bankrupt.
Makes a whole lot of short term profits, destroys the company and it’s employees. No fucks given
Private equity firms are a cancer (amongst many cancers) on humanity
They killed Karstadt this way, V&D, and I bet a bunch of other department stores too.
It wasn’t always this bad. It started out as a way to improve local businesses. The problem is the internet and all the hype
Ummm private equity firms have been evilly destroying companies since the early eighties at least.
This was back in the 70’s
I hate to tell you this but private equity has been a problem long before the Internet went mainstream. I think venture capital firms we’re a product of a post-WWII world trying to capture as much wealth as possible during reconstruction. I’d have to check some sources to be sure of that and I’m really not motivated enough to do it.
For a while they brought down prices and improved service
It only was like that for a short time though
Don’t see how the internet plays a role in firms purchasing stuff then gutting them for profit.
Local business owners are better at their jobs since they have a tremendous amount of resources at their disposal
The fact that they can buy a company by going into debt and immediately transfer the debt to the company is fucking insane. Maybe we need to figure out how we as individuals can do that and just fucking crash the lending industry entirely? Can I make my house buy itself for me and then “whoopsie, the house can’t pay the bills, guess it will file for bankruptcy and hand me a big ol’ stack of cash”.
Can I make my house buy itself for me and then “whoopsie, the house can’t pay the bills, guess it will file for bankruptcy and hand me a big ol’ stack of cash”.
2008 called…
That’s how landlords work.
Take loan, buy houses, house has to pay back loan via rent, rent is paid for by renter.
Landlord gets house for free, everything paid by renter.
And the same thing happens to banks for people with mortgages.
the same happens to most mortgages, namely income goes to the lender and you get a house.
But, you get the equity, and you own the house when (if) you pay off the loan. Renters get nothing.
They will never, ever give us equal rules willingly. The only way that’s going to happen is if we build a new financial system, immune to their Pinkertons and police.
You will not build a new financial system without structures of power. The best we can do is to understand the structures of power and how to combat them.
Structures of power… You mean “guillotines”?
You never change things by fighting the existing reality. To change something, build a new model that makes the existing model obsolete.
— Buckminster Fuller
I’m not going to say exactly what it would take, but it rhymes with Bolotov Cocktail
I couldn’t possible know what you mean, but that sounds delicious.
I use fireball in mine. So the revolution will smell like cinnamon.
Justice often is.
The actions taken by private equity companies seem very similar to those taken by organized crime syndicates when THEY take over a business
Odd, don’t you think?
Like in Goodfellas, cannibalizing their own community. Embezzle and steal everything you can, then torch the place for the insurance.
But in Goodfellas, the owner of the restaurant approaches the mafia and asks Paulie to “be a partner”, so he can get Tommy to stop terrorizing the place AND running up tabs he has no intention of paying.
Imagine some short mafia type with a Napoleon complex walking around the Toys R Us aisles, knocking merchandise off the shelves while harassing kids and their mothers.
I betcha the equity firms approach with a silk tongue and Wall St technobabble jabberwocky. I know those CEO business types, the read their CEO magazines chock full of pseudoscience articles like, for example, determining a personality type via their handwriting style, the hooks and curves of their calligraphy. Corporate astrology, just as gullible to fancy jargon as the proverbial Man Down The Street.
Capitalism is organized crime
DOGE used this same model on the US government.
Capitalism is not rational
Time to kill private equity……with crippling regulation and accountability of course
Nah just make the rich people pay their taxes. Then they won’t have money for stupid shit like this
One of the reasons they have so much money is the financial trickery that private equity employs
Not when you live in a country where private equity basically owns the government.
Also pensions, airlines, and restaurants.
And fucking hospitals
Leveraged buyout is insane and should be so very very illegal.
Let them leverage but they have to pay it back. None of this transfer the loan shit.
All we really need is to make sure the people investing in and making these decisions get financially destroyed
Rumours of Geoffrey’s death where exaggeratedSame for William Shatner.
It looks like he’s flashing us.
I don’t know I went into one recently and it is. A shadow of its former self. Looks like it is going out of business.
Well, yeah but its not yet dead.
To be fair most retail is dying, no one has money for niceties (as a lot work in retail or paid like they do)
A victim of the good ol leveraged buyout which should be fucking illegal right alongside stock buybacks.
