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I also read that the hedge fund that bought Red Lobster sold the land the restaurants are built on and then leased it back to the restaurants at an elevated ren

I also read that the hedge fund that bought Red Lobster sold the land the restaurants are built on and then leased it back to the restaurants at an elevated rent. It was how they financed the 2014 acquisition by spinning all the real estate assets to a separate entity per Forbes. Straight up corporate cannibalism. So Golden Gate Capital gutted it, dumped it, and then jacked up the rent... Gordon Gecko would be proud.

danans 2y ago
> I also read that the hedge fund that bought Red Lobster sold the land the restaurants are built on and then leased it back to the restaurants at an elevated rent. How can they decide how much rent to charge if they no longer own the land? Do they just act as a property manager between the new landowner and the the restaurant? > So Golden Gate Capital gutted it, dumped it, and then jacked up the rent... Gordon Gecko would be proud. I can totally see that happening, but I'd argue they wouldn't have done it to a strong brand, which has a lot of value. Red Lobster wasn't a strong brand. If the brand were strong it wouldn't have been sold in the first place. PE and hedge funds look for weak businesses that they can then gut. They have a lot of leverage in those situations. I doubt the hedge funds lost money on the bankruptcy.