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Yes, I did. Sale-leasebacks are common and perfectly reasonable business strategies. Generally speaking lease liabilities have a lower cost of capital than ot
by johngladtj 2y ago
Yes, I did.
Sale-leasebacks are common and perfectly reasonable business strategies.
Generally speaking lease liabilities have a lower cost of capital than other types of debt, so making such a deal can help the company.
None of the decisions described in the post are either unusual or unreasonable from a management team trying to save a troubled company. They were just unsuccessful.
- fasteo 2y ago>>> from a management team trying to save a troubled company. They were just unsuccessful. My take is that they were not there to save the company, but to extract all its assets and let it go.
- johngladtj 2y agoSometimes that's the best option.
- rondini 2y agoFor who? Was that the best option for the employees who relied on the income? Or the customers who enjoyed the food? There are plenty of actions that are rational from an economics standpoint as long as you don't care about any of the externalities such as human dignity.
- johngladtj 2y agoEmployees have a contractual claim, one that is above shareholders and most other creditors, nothing more nothing less. By all accounts they are being made whole, and can go off and get another job. Employees have no more of a right to sell their labor to red lobster than any other of their suppliers has a right to sell their products. Ultimately a company exists, and should exist, solely for it's shareholders. Anything else leads to waste, grift and mismanagement.