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They took a huge loan, bought the company and funneled its "profits" to the loan and now it's bankrupt? How is that legal?
by revelation 10y ago
They took a huge loan, bought the company and funneled its "profits" to the loan and now it's bankrupt? How is that legal?
- mbag 10y agoAll animals are equal but some animals are more equal than others...
- jessaustin 10y agoThat is the basis of the private equity industry. Sometimes there's more cashflow than they expected so the firm doesn't go belly-up before they can peddle it, but that's not because PE dudes are any good at running a business. It's just as common to get less cashflow than they expected, and have the whole thing collapse without paying them. In a previous life I got a close-up view of Carlyle attempting this with a former Verizon business, only to discover that Verizon can put short pants on crooked business execs. That office tower was stacked to the ceilings with deadwood. Equal parts fascinating and horrifying.
- smcl 10y ago"... only to discover that Verizon can put short pants on crooked business execs" This phrase interests me - what does it mean? Like they can dress them down, or make them look foolish?
- jessaustin 10y agoIt means that compared to Verizon crooked execs, Carlyle crooked execs were like children, who were new to the game of being crooked executives. (Traditionally it was children who wore short pants.)
- smcl 10y agoWow ok, thanks :) I hadn't considered that
- wbl 10y agoEveryone buying the stock knew what the leverage was.