I'm going to try to do a series of blog entries about the failures of Capitalism. Today's entry is on "Buyout firms".
What they do is find a company in distress, borrow money, buy out the company, then offload the debt to the company. Meanwhile, they will try to spruce up its image and sell it for a quick profit, the new owners inheriting the debt.
Simmons, a mattress manufacturing company, switched hands many times during its 133 years. Equity firms have made over $750 million off of it over the years.
Simmons now owes $1.3 billion (compared to $164 million in 1991).
Workers suffer, from layoffs. Investors lose their investments. Meanwhile, the 'owners' make off quite handsomely.
What they do is find a company in distress, borrow money, buy out the company, then offload the debt to the company. Meanwhile, they will try to spruce up its image and sell it for a quick profit, the new owners inheriting the debt.
Simmons, a mattress manufacturing company, switched hands many times during its 133 years. Equity firms have made over $750 million off of it over the years.
Simmons now owes $1.3 billion (compared to $164 million in 1991).
Workers suffer, from layoffs. Investors lose their investments. Meanwhile, the 'owners' make off quite handsomely.
