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So, taken over by private equity in 2017... It'll continue to operate... I'm curious what fraction of the creditors are backed by Cornell Capital (PE owner), a

So, taken over by private equity in 2017... It'll continue to operate... I'm curious what fraction of the creditors are backed by Cornell Capital (PE owner), and if they just are using this to wipe out retirement plans/other creditors/dump a bunch of debt, or if they actually messed up.

kurthr 3y ago
So I wonder how much was that the PE didn't feel like they were getting a large enough coupon (2017-19 rates) and wanted a quicker bankruptcy to redeploy their efforts? A rational corp would have refinanced the debt at 2021 rates. https://www.prnewswire.com/news-releases/instant-brands-to-merge-with-cornell-capitals-corelle-brands-300805735.html https://www.prnewswire.com/news-releases/instant-brands-to-m...
jppope 3y ago
That's why my guess was going to be: "financialization" ... buy the company, profit like crazy by selling it assets and taking on debt, cut R&D budgets, cut marketing, provide fat compensation for C-suite and board... bankruptcy ~5 years later after someone else is holding the bag. The playbook is practically as American as baseball these days. Even more so when tax payers get to pay for the bail out. tbh I should probably get with the times and start doing it myself, at some point the music will stop and there won't be any companies left to rob blind...
- another2another 3y ago
  I still weep for Boots the Chemist in the UK that this happened to. They used to be a great British company.
- kristopolous 3y ago
  It's the Jack Welch dance. https://www.simonandschuster.com/books/The-Man-Who-Broke-Capitalism/David-Gelles/9781982176426 https://www.simonandschuster.com/books/The-Man-Who-Broke-Cap...
- dbg31415 3y ago
  "Cornell Capital... Founded in 2013 by Senior Partner Henry Cornell, the former Vice Chairman of Goldman Sachs’ Merchant Banking Division..." https://cornellcapllc.com/ https://cornellcapllc.com/
- OscarCunningham 3y ago
  It seems like the plan of private equity is always to leave creditors holding the bag. So why in the first place do creditors lend to any company at reasonable rates without assurances this won't happen?
  - killingtime74 3y ago
    The rate is the assurance. Charge more if you think the risk is high
  - linuxftw 3y ago
    The creditors are people's 401k's. The debt that gets issued is sold off to 'fund managers' that help enrich their friends. Until there's a law passed preventing retirement plans from forcing you into only a handful of funds, it's never going to stop.
majormajor 3y ago
It got harder for me to find maintenance parts for my first Instant Pot starting a few years ago. Now I guess that was a PE-driven move to push replacements instead of maintenance. The parts they do still sell got de-emphasized on their website and they stopped selling some. See the comments here: https://www.instanthome.com/product/instant-pot/parts/anti-block-shield https://www.instanthome.com/product/instant-pot/parts/anti-b... "Hello Olga. The Duo Evo Plus, steam release valves, are not sold individually at this time. If you have any concerns about yours, please contact our Customer Care team for assistance" In one of them they even provide a link to a supposed "replacement parts" section that doesn't work at all today: https://www.instanthome.com/marketing/9001/instant-replacement-parts?sort_by=created&sort_order=DESC https://www.instanthome.com/marketing/9001/instant-replaceme...
- Scoundreller 3y ago
  dunno how prohibitive they are to reproduce, but usually if a product is popular enough, someone comes along and mass manufactures the replacement parts. Just like car parts. Of course, there are sometimes things you don't want to really mess with of questionable quality. I'm assuming any pressure cooker has a rubber blowoff plug so there's not too much risk of the normal use valve jamming or something. And an electronic pressure cooker might sense over-heat/overpressurization. But if the steam release valve is electronically controlled too... you're now in BMW land
zzzbra 3y ago
do people use PE as a short-hand for Private Equity or is that like just a thing that started on this thread
- mikeiz404 3y ago
  It’s a common short hand. > In the field of finance, the term private equity (PE) refers to investment funds, usually limited partnerships, which invest in and restructure private companies. https://en.m.wikipedia.org/wiki/Private_equity https://en.m.wikipedia.org/wiki/Private_equity
- gen220 3y ago
  It is indeed a common shorthand in finance lingo. Not to be confused with with "Price to Earnings Ratio", although that's usually rendered as "PE ratio".
mortenjorck 3y ago
Wow, this was the first place my mind went when I saw they’d taken out half a billion in credit, and it’s kind of indefensible that the article didn’t mention it at all. Yet another storied business that had perhaps become stagnant, but certainly didn’t need to be sacrificed to vampire private equity. Where does it stop?

kurthr 3y ago

So I wonder how much was that the PE didn't feel like they were getting a large enough coupon (2017-19 rates) and wanted a quicker bankruptcy to redeploy their efforts? A rational corp would have refinanced the debt at 2021 rates. https://www.prnewswire.com/news-releases/instant-brands-to-merge-with-cornell-capitals-corelle-brands-300805735.html https://www.prnewswire.com/news-releases/instant-brands-to-m...

jppope 3y ago

That's why my guess was going to be: "financialization" ... buy the company, profit like crazy by selling it assets and taking on debt, cut R&D budgets, cut marketing, provide fat compensation for C-suite and board... bankruptcy ~5 years later after someone else is holding the bag. The playbook is practically as American as baseball these days. Even more so when tax payers get to pay for the bail out. tbh I should probably get with the times and start doing it myself, at some point the music will stop and there won't be any companies left to rob blind...

another2another 3y ago
I still weep for Boots the Chemist in the UK that this happened to. They used to be a great British company.
kristopolous 3y ago
It's the Jack Welch dance. https://www.simonandschuster.com/books/The-Man-Who-Broke-Capitalism/David-Gelles/9781982176426 https://www.simonandschuster.com/books/The-Man-Who-Broke-Cap...
dbg31415 3y ago
"Cornell Capital... Founded in 2013 by Senior Partner Henry Cornell, the former Vice Chairman of Goldman Sachs’ Merchant Banking Division..." https://cornellcapllc.com/ https://cornellcapllc.com/
OscarCunningham 3y ago
It seems like the plan of private equity is always to leave creditors holding the bag. So why in the first place do creditors lend to any company at reasonable rates without assurances this won't happen?
- killingtime74 3y ago
  The rate is the assurance. Charge more if you think the risk is high
- linuxftw 3y ago
  The creditors are people's 401k's. The debt that gets issued is sold off to 'fund managers' that help enrich their friends. Until there's a law passed preventing retirement plans from forcing you into only a handful of funds, it's never going to stop.

majormajor 3y ago

It got harder for me to find maintenance parts for my first Instant Pot starting a few years ago. Now I guess that was a PE-driven move to push replacements instead of maintenance. The parts they do still sell got de-emphasized on their website and they stopped selling some. See the comments here: https://www.instanthome.com/product/instant-pot/parts/anti-block-shield https://www.instanthome.com/product/instant-pot/parts/anti-b... "Hello Olga. The Duo Evo Plus, steam release valves, are not sold individually at this time. If you have any concerns about yours, please contact our Customer Care team for assistance" In one of them they even provide a link to a supposed "replacement parts" section that doesn't work at all today: https://www.instanthome.com/marketing/9001/instant-replacement-parts?sort_by=created&sort_order=DESC https://www.instanthome.com/marketing/9001/instant-replaceme...

Scoundreller 3y ago
dunno how prohibitive they are to reproduce, but usually if a product is popular enough, someone comes along and mass manufactures the replacement parts. Just like car parts. Of course, there are sometimes things you don't want to really mess with of questionable quality. I'm assuming any pressure cooker has a rubber blowoff plug so there's not too much risk of the normal use valve jamming or something. And an electronic pressure cooker might sense over-heat/overpressurization. But if the steam release valve is electronically controlled too... you're now in BMW land

zzzbra 3y ago

do people use PE as a short-hand for Private Equity or is that like just a thing that started on this thread

mikeiz404 3y ago
It’s a common short hand. > In the field of finance, the term private equity (PE) refers to investment funds, usually limited partnerships, which invest in and restructure private companies. https://en.m.wikipedia.org/wiki/Private_equity https://en.m.wikipedia.org/wiki/Private_equity
gen220 3y ago
It is indeed a common shorthand in finance lingo. Not to be confused with with "Price to Earnings Ratio", although that's usually rendered as "PE ratio".

mortenjorck 3y ago

Wow, this was the first place my mind went when I saw they’d taken out half a billion in credit, and it’s kind of indefensible that the article didn’t mention it at all. Yet another storied business that had perhaps become stagnant, but certainly didn’t need to be sacrificed to vampire private equity. Where does it stop?