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Company management decided to borrow money at a bad time. You phrased that in really weird way to make it sound like some sinister external force is making the

Company management decided to borrow money at a bad time. You phrased that in really weird way to make it sound like some sinister external force is making them do things against their will.

ghostbrainalpha 7y ago
If feels sinister because the company didn't need to borrow money. A business that was adequately servicing investors, employees, and customers, has been destroyed because a small group tried to extract more wealth from the company than it could sustain.
- nine_k 7y ago
  It looks almost like fraud, an exploit using an edge condition. * Buy a working company. * Borrow a ton of money, siphon it out. * Bankrupt the company which is liquidated for much less than the amount borrowed. * The lenders are left holding the bag.
ghostbrainalpha 7y ago
If feels sinister because the company didn't need to borrow money. A business that was adequately servicing investors, employees, and customers, has been destroyed because a small group tried to extract more wealth from the company than it could sustain. But I would probably agree with you that just because something feels sinister, doesn't mean that it actually is. And "Toys R Us" would have been destroyed by Amazon within the decade no matter what. Gary Vanderchuck talked about how terribly poor the management was, and their failure to do any significant innovation or participate meaningfully in any of the trends around children's entertainment.
bena 7y ago
It was sinister. Bain, KKR, and Vornado borrowed money to "buy" the company then saddled the debt with the purchased company. So in a way, they did force them. The shareholders and board members prior to the buyout made out like bandits, which is all they wanted. Toys R Us couldn't keep up with the interest payments on loans from Bain and KKR. Not to mention "advisory fees" and whatever bullshit they charged Toys R Us with. That's what put them under. Not lagging sales. Not bad business. Being "bought" by sinister people.

Company management decided to borrow money at a bad time. You phrased that in really weird way to make it sound like some sinister external force is making them do things against their will.

ghostbrainalpha 7y ago

nine_k 7y ago
It looks almost like fraud, an exploit using an edge condition. * Buy a working company. * Borrow a ton of money, siphon it out. * Bankrupt the company which is liquidated for much less than the amount borrowed. * The lenders are left holding the bag.

ghostbrainalpha 7y ago

If feels sinister because the company didn't need to borrow money. A business that was adequately servicing investors, employees, and customers, has been destroyed because a small group tried to extract more wealth from the company than it could sustain. But I would probably agree with you that just because something feels sinister, doesn't mean that it actually is. And "Toys R Us" would have been destroyed by Amazon within the decade no matter what. Gary Vanderchuck talked about how terribly poor the management was, and their failure to do any significant innovation or participate meaningfully in any of the trends around children's entertainment.

bena 7y ago

It was sinister. Bain, KKR, and Vornado borrowed money to "buy" the company then saddled the debt with the purchased company. So in a way, they did force them. The shareholders and board members prior to the buyout made out like bandits, which is all they wanted. Toys R Us couldn't keep up with the interest payments on loans from Bain and KKR. Not to mention "advisory fees" and whatever bullshit they charged Toys R Us with. That's what put them under. Not lagging sales. Not bad business. Being "bought" by sinister people.