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[Vulture capital] TRU/Sears/Tribune Memorial Thread of Asmodee being Embraced

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Posts

  • Capt HowdyCapt Howdy Registered User regular
    Richy wrote: »
    .
    Richy wrote: »
    Mai-Kero wrote: »
    HerrCron wrote: »
    knitdan wrote: »
    I think it’s possible, even likely, that

    1. Bain Capital screwed TRU by saddling it with unsustainable debt service
    And
    2. Toys R Us had a business model that was doomed to failure eventually

    Are both true statements.

    And yet Canadian TRU is doing just fine, by all accounts, putting the lie to the second part of that.

    It's kind of crazy how well retail can still do when run correctly. Best Buy had incredible terrible upper-management for a while, and then imported a hotel CEO that turned the business around dramatically. I worked there for like eight years and saw things get pretty grim, and then saw them start to pump money into the right places, and now they're growing again, despite being the biggest 'Amazon will destroy this company' company in the country. They may have had an advantage in essentially being subsidized by hardware manufacturers, but I'm sure Toys R Us could have done the same with Hasbro/etc.

    I think Toys R Us would have been fine had they done the right things and not be sabotaged internally. Without Toys R Us, we might see some of the tiny hobby shops that sell Amiibos and other collectible toys do a bit better for a while, but I've never lived anywhere where those can last more than a few years.

    Indeed. I find it telling that the two biggest "Internet is killing retail" stories in recent history, Sears and Toys R Us, were both actually victims of predatory capitalism and bad management, and not of the internet at all.

    I think it's kinda both. If an old person has cancer and dies of pneumonia, did they die of the cancer which weakened them, or the pneumonia that took them away?

    Problem is, no one has proven yet that the internet is cancer for TRU and Sears, or why it was for them but not for all the other massive box stores (The Bay, Walmart, etc.).

    The situation is more akin to a doctor claiming an old person dying of pneumonia actually has cancer, and using that as an excuse to pocket billions of dollars in unnecessary cancer treatments while ignoring the pneumonia. Or something. It's starting to get away from me, that one.

    More like a doctor intentionally killing a patient for the life insurance money, but everyone blames the pneumonia the patient had, so the doctor doesn't take any of the heat.

    Steam: kaylesolo1
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  • PolaritiePolaritie Sleepy Registered User regular
    Capt Howdy wrote: »
    Richy wrote: »
    .
    Richy wrote: »
    Mai-Kero wrote: »
    HerrCron wrote: »
    knitdan wrote: »
    I think it’s possible, even likely, that

    1. Bain Capital screwed TRU by saddling it with unsustainable debt service
    And
    2. Toys R Us had a business model that was doomed to failure eventually

    Are both true statements.

    And yet Canadian TRU is doing just fine, by all accounts, putting the lie to the second part of that.

    It's kind of crazy how well retail can still do when run correctly. Best Buy had incredible terrible upper-management for a while, and then imported a hotel CEO that turned the business around dramatically. I worked there for like eight years and saw things get pretty grim, and then saw them start to pump money into the right places, and now they're growing again, despite being the biggest 'Amazon will destroy this company' company in the country. They may have had an advantage in essentially being subsidized by hardware manufacturers, but I'm sure Toys R Us could have done the same with Hasbro/etc.

    I think Toys R Us would have been fine had they done the right things and not be sabotaged internally. Without Toys R Us, we might see some of the tiny hobby shops that sell Amiibos and other collectible toys do a bit better for a while, but I've never lived anywhere where those can last more than a few years.

    Indeed. I find it telling that the two biggest "Internet is killing retail" stories in recent history, Sears and Toys R Us, were both actually victims of predatory capitalism and bad management, and not of the internet at all.

    I think it's kinda both. If an old person has cancer and dies of pneumonia, did they die of the cancer which weakened them, or the pneumonia that took them away?

    Problem is, no one has proven yet that the internet is cancer for TRU and Sears, or why it was for them but not for all the other massive box stores (The Bay, Walmart, etc.).

    The situation is more akin to a doctor claiming an old person dying of pneumonia actually has cancer, and using that as an excuse to pocket billions of dollars in unnecessary cancer treatments while ignoring the pneumonia. Or something. It's starting to get away from me, that one.

    More like a doctor intentionally killing a patient for the life insurance money, but everyone blames the pneumonia the patient had, so the doctor doesn't take any of the heat.

    And the doctor infected them in the first place.

    Steam: Polaritie
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    Switch: SW-5185-4991-5118
    PSN: AbEntropy
  • jungleroomxjungleroomx It's never too many graves, it's always not enough shovels Registered User regular
    Polaritie wrote: »
    Richy wrote: »
    Mai-Kero wrote: »
    HerrCron wrote: »
    knitdan wrote: »
    I think it’s possible, even likely, that

    1. Bain Capital screwed TRU by saddling it with unsustainable debt service
    And
    2. Toys R Us had a business model that was doomed to failure eventually

    Are both true statements.

    And yet Canadian TRU is doing just fine, by all accounts, putting the lie to the second part of that.

    It's kind of crazy how well retail can still do when run correctly. Best Buy had incredible terrible upper-management for a while, and then imported a hotel CEO that turned the business around dramatically. I worked there for like eight years and saw things get pretty grim, and then saw them start to pump money into the right places, and now they're growing again, despite being the biggest 'Amazon will destroy this company' company in the country. They may have had an advantage in essentially being subsidized by hardware manufacturers, but I'm sure Toys R Us could have done the same with Hasbro/etc.

    I think Toys R Us would have been fine had they done the right things and not be sabotaged internally. Without Toys R Us, we might see some of the tiny hobby shops that sell Amiibos and other collectible toys do a bit better for a while, but I've never lived anywhere where those can last more than a few years.

    Indeed. I find it telling that the two biggest "Internet is killing retail" stories in recent history, Sears and Toys R Us, were both actually victims of predatory capitalism and bad management, and not of the internet at all.

    I think it's kinda both. If an old person has cancer and dies of pneumonia, did they die of the cancer which weakened them, or the pneumonia that took them away?

    I wasn't aware increasing profits constituted illness.

    Profits for who?

  • Hahnsoo1Hahnsoo1 Make Ready. We Hunt.Registered User regular
    Richy wrote: »
    .
    Richy wrote: »
    Mai-Kero wrote: »
    HerrCron wrote: »
    knitdan wrote: »
    I think it’s possible, even likely, that

    1. Bain Capital screwed TRU by saddling it with unsustainable debt service
    And
    2. Toys R Us had a business model that was doomed to failure eventually

    Are both true statements.

    And yet Canadian TRU is doing just fine, by all accounts, putting the lie to the second part of that.

    It's kind of crazy how well retail can still do when run correctly. Best Buy had incredible terrible upper-management for a while, and then imported a hotel CEO that turned the business around dramatically. I worked there for like eight years and saw things get pretty grim, and then saw them start to pump money into the right places, and now they're growing again, despite being the biggest 'Amazon will destroy this company' company in the country. They may have had an advantage in essentially being subsidized by hardware manufacturers, but I'm sure Toys R Us could have done the same with Hasbro/etc.

    I think Toys R Us would have been fine had they done the right things and not be sabotaged internally. Without Toys R Us, we might see some of the tiny hobby shops that sell Amiibos and other collectible toys do a bit better for a while, but I've never lived anywhere where those can last more than a few years.

    Indeed. I find it telling that the two biggest "Internet is killing retail" stories in recent history, Sears and Toys R Us, were both actually victims of predatory capitalism and bad management, and not of the internet at all.

    I think it's kinda both. If an old person has cancer and dies of pneumonia, did they die of the cancer which weakened them, or the pneumonia that took them away?

    Problem is, no one has proven yet that the internet is cancer for TRU and Sears, or why it was for them but not for all the other massive box stores (The Bay, Walmart, etc.).

    The situation is more akin to a doctor claiming an old person dying of pneumonia actually has cancer, and using that as an excuse to pocket billions of dollars in unnecessary cancer treatments while ignoring the pneumonia. Or something. It's starting to get away from me, that one.
    I think the conventional wisdom attitude among the public of "Oh, they simply couldn't compete with Amazon." is why private equity is going to get away with this. Just like the conventional wisdom attitude of "Oh, health care is just expensive" is why similar companies are going to get away with raising the prices of drugs in the US a hundredfold compared, when the drugs are FAR cheaper in neighboring countries and the recent past, Shkreli notwithstanding (Hey, they have their martyr now!).

    No one is paying attention to the leveraged buyout and the debt, among the conversations I've had at work, until I've explained it. It's not well-known.

    8i1dt37buh2m.png
  • ArbitraryDescriptorArbitraryDescriptor changed Registered User regular
    edited March 2018
    So what’s going to happen to all the TRU real estate? I can’t think of any retailer that fits in stores that big that currently has an appetite/need for these locations...

    Convert to office space?

    The local TRU's previous location was turned into a Pottery Barn type thing. Furniture stores, "Pier Ones", shoe stores, basically any of the specialty chains fighting against Target/Walmarts could make decent use of the newer TRU layouts and locations.

    But I really hope "VR laser tags" is the correct answer.

    ArbitraryDescriptor on
  • NobodyNobody Registered User regular
    At one point we had an entertainment center near me that had laser tag, go-karts, mini golf, a massive arcade including VR, and a movie theater.

    All of it was stripped out to add more screens to the movie theater except for the arcade which was reduced to about a fifth of its size with standard Dave and Busters fare.

  • AngelHedgieAngelHedgie Registered User regular
    Hahnsoo1 wrote: »
    Richy wrote: »
    .
    Richy wrote: »
    Mai-Kero wrote: »
    HerrCron wrote: »
    knitdan wrote: »
    I think it’s possible, even likely, that

    1. Bain Capital screwed TRU by saddling it with unsustainable debt service
    And
    2. Toys R Us had a business model that was doomed to failure eventually

    Are both true statements.

    And yet Canadian TRU is doing just fine, by all accounts, putting the lie to the second part of that.

    It's kind of crazy how well retail can still do when run correctly. Best Buy had incredible terrible upper-management for a while, and then imported a hotel CEO that turned the business around dramatically. I worked there for like eight years and saw things get pretty grim, and then saw them start to pump money into the right places, and now they're growing again, despite being the biggest 'Amazon will destroy this company' company in the country. They may have had an advantage in essentially being subsidized by hardware manufacturers, but I'm sure Toys R Us could have done the same with Hasbro/etc.

    I think Toys R Us would have been fine had they done the right things and not be sabotaged internally. Without Toys R Us, we might see some of the tiny hobby shops that sell Amiibos and other collectible toys do a bit better for a while, but I've never lived anywhere where those can last more than a few years.

    Indeed. I find it telling that the two biggest "Internet is killing retail" stories in recent history, Sears and Toys R Us, were both actually victims of predatory capitalism and bad management, and not of the internet at all.

    I think it's kinda both. If an old person has cancer and dies of pneumonia, did they die of the cancer which weakened them, or the pneumonia that took them away?

    Problem is, no one has proven yet that the internet is cancer for TRU and Sears, or why it was for them but not for all the other massive box stores (The Bay, Walmart, etc.).

    The situation is more akin to a doctor claiming an old person dying of pneumonia actually has cancer, and using that as an excuse to pocket billions of dollars in unnecessary cancer treatments while ignoring the pneumonia. Or something. It's starting to get away from me, that one.
    I think the conventional wisdom attitude among the public of "Oh, they simply couldn't compete with Amazon." is why private equity is going to get away with this. Just like the conventional wisdom attitude of "Oh, health care is just expensive" is why similar companies are going to get away with raising the prices of drugs in the US a hundredfold compared, when the drugs are FAR cheaper in neighboring countries and the recent past, Shkreli notwithstanding (Hey, they have their martyr now!).

    No one is paying attention to the leveraged buyout and the debt, among the conversations I've had at work, until I've explained it. It's not well-known.

    Which is why we need to push back. Look at how much people here have acknowledged the LBO issue once it's explained.

    XBL: Nox Aeternum / PSN: NoxAeternum / NN:NoxAeternum / Steam: noxaeternum
  • PaladinPaladin Registered User regular
    Is the only solution government?

    Marty: The future, it's where you're going?
    Doc: That's right, twenty five years into the future. I've always dreamed on seeing the future, looking beyond my years, seeing the progress of mankind. I'll also be able to see who wins the next twenty-five world series.
  • BolthornBolthorn Registered User regular
    Most of the buildings will end up as either seasonal Halloween store locations or furniture stores that have their huge going out of business sale right after they have their huge grand opening sale. Mostly they will be empty. We had a giant sporting goods store move from one giant huge location to another less than a mile away in the last year. The old store will remain empty until Halloween I'm sure. Oh wait, no, this past year the Halloween store was in a shut down H.H. Gregg store. And instead of anything moving into those spaces that already exist, more are being built. I'm kind of glad we moved a little farther away from the whole thing.

  • Capt HowdyCapt Howdy Registered User regular
    Paladin wrote: »
    Is the only solution government?

    Sort of. Leveraged buyouts need rules so those doing the buying don't profit from intentionally tanking the company they bought.

    Steam: kaylesolo1
    3DS: 1521-4165-5907
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    WiiU: KayleSolo
  • PaladinPaladin Registered User regular
    Capt Howdy wrote: »
    Paladin wrote: »
    Is the only solution government?

    Sort of. Leveraged buyouts need rules so those doing the buying don't profit from intentionally tanking the company they bought.

    I just don't see it happening unless an essential service gets taken out. Government doesn't respond that well to public outcry.

    Marty: The future, it's where you're going?
    Doc: That's right, twenty five years into the future. I've always dreamed on seeing the future, looking beyond my years, seeing the progress of mankind. I'll also be able to see who wins the next twenty-five world series.
  • SleepSleep Registered User regular
    Paladin wrote: »
    Is the only solution government?

    Yes

    The rich certainly aren't going to be shamed into not looting the economy at the expense of others, and they certainly aren't going to do it out of the niceness of their hearts.

    Government regulation of leveraged buyouts, or a strengthening of the safety net so as to make sure the folks the rich are fuckin out of jobs are taken care of is really the only solution here.

    Neither will happen.

  • Capt HowdyCapt Howdy Registered User regular
    Paladin wrote: »
    Capt Howdy wrote: »
    Paladin wrote: »
    Is the only solution government?

    Sort of. Leveraged buyouts need rules so those doing the buying don't profit from intentionally tanking the company they bought.

    I just don't see it happening unless an essential service gets taken out. Government doesn't respond that well to public outcry.

    It actually almost happened with Trump's tax plan. But he left a real estate loop hole for himself that the other companies can take advantage of. But it did *almost* happen.

    Steam: kaylesolo1
    3DS: 1521-4165-5907
    PS3: KayleSolo
    Live: Kayle Solo
    WiiU: KayleSolo
  • PaladinPaladin Registered User regular
    Sleep wrote: »
    Paladin wrote: »
    Is the only solution government?

    Yes

    The rich certainly aren't going to be shamed into not looting the economy at the expense of others, and they certainly aren't going to do it out of the niceness of their hearts.

    Government regulation of leveraged buyouts, or a strengthening of the safety net so as to make sure the folks the rich are fuckin out of jobs are taken care of is really the only solution here.

    Neither will happen.

    If there was a capitalist way to eat their lunch I'd see a viable option

    Marty: The future, it's where you're going?
    Doc: That's right, twenty five years into the future. I've always dreamed on seeing the future, looking beyond my years, seeing the progress of mankind. I'll also be able to see who wins the next twenty-five world series.
  • MatevMatev Cero Miedo Registered User regular
    Paladin wrote: »
    Sleep wrote: »
    Paladin wrote: »
    Is the only solution government?

    Yes

    The rich certainly aren't going to be shamed into not looting the economy at the expense of others, and they certainly aren't going to do it out of the niceness of their hearts.

    Government regulation of leveraged buyouts, or a strengthening of the safety net so as to make sure the folks the rich are fuckin out of jobs are taken care of is really the only solution here.

    Neither will happen.

    If there was a capitalist way to eat their lunch I'd see a viable option

    Well, I prefer Sleep’s line of thought personally. But if for some reason we can’t stop/ban LBOs, then flip the bankruptcy law for corps. You have to pay non-executive employee severance, health, and pensions (preferably until they gain new employment) first, moving up the chain until you’re out of cash, so that by the time you get to the banks, you have to pay out of your own pocket to avoid getting nailed. Suddenly looting looks a lot less profitable when you don’t have a company and a bank to hide behind.

    "Go down, kick ass, and set yourselves up as gods, that's our Prime Directive!"
    Hail Hydra
  • Trajan45Trajan45 Registered User regular
    edited March 2018
    I skipped to the back here so maybe it was already talked about, but what does Bain Capitol get out of these kinds of moves (buying company's and saddling them with debt)?

    Trajan45 on
    Origin ID\ Steam ID: Warder45
  • MatevMatev Cero Miedo Registered User regular
    edited March 2018
    Trajan45 wrote: »
    I skipped to the back here so maybe it was already talked about, but what does Bain Capitol get out of these kinds of moves (buying company's and saddling them with debt)?

    They service the bare minimum of the debt (which they used to buy the company to begin with), skim the profits, then when they go bankrupt, sell the component parts of the company off to pay off the bank loan that way, and don’t get punished for it.

    Matev on
    "Go down, kick ass, and set yourselves up as gods, that's our Prime Directive!"
    Hail Hydra
  • SleepSleep Registered User regular
    Matev wrote: »
    Trajan45 wrote: »
    I skipped to the back here so maybe it was already talked about, but what does Bain Capitol get out of these kinds of moves (buying company's and saddling them with debt)?

    They service the bare minimum of the debt (which they used to buy the company to begin with), skim the profits, then when they go bankrupt, sell the component parts of the company off to pay off the bank loan that way, and don’t get punished for it.

    All the while paying their Bain capitol employees as the c level positions in the company for a giant salary with bonuses if I'm not mistaken.

  • PaladinPaladin Registered User regular
    Matev wrote: »
    Paladin wrote: »
    Sleep wrote: »
    Paladin wrote: »
    Is the only solution government?

    Yes

    The rich certainly aren't going to be shamed into not looting the economy at the expense of others, and they certainly aren't going to do it out of the niceness of their hearts.

    Government regulation of leveraged buyouts, or a strengthening of the safety net so as to make sure the folks the rich are fuckin out of jobs are taken care of is really the only solution here.

    Neither will happen.

    If there was a capitalist way to eat their lunch I'd see a viable option

    Well, I prefer Sleep’s line of thought personally. But if for some reason we can’t stop/ban LBOs, then flip the bankruptcy law for corps. You have to pay non-executive employee severance, health, and pensions (preferably until they gain new employment) first, moving up the chain until you’re out of cash, so that by the time you get to the banks, you have to pay out of your own pocket to avoid getting nailed. Suddenly looting looks a lot less profitable when you don’t have a company and a bank to hide behind.

    Wouldn't employers just fire everybody prior to filing?

    Marty: The future, it's where you're going?
    Doc: That's right, twenty five years into the future. I've always dreamed on seeing the future, looking beyond my years, seeing the progress of mankind. I'll also be able to see who wins the next twenty-five world series.
  • SleepSleep Registered User regular
    Paladin wrote: »
    Matev wrote: »
    Paladin wrote: »
    Sleep wrote: »
    Paladin wrote: »
    Is the only solution government?

    Yes

    The rich certainly aren't going to be shamed into not looting the economy at the expense of others, and they certainly aren't going to do it out of the niceness of their hearts.

    Government regulation of leveraged buyouts, or a strengthening of the safety net so as to make sure the folks the rich are fuckin out of jobs are taken care of is really the only solution here.

    Neither will happen.

    If there was a capitalist way to eat their lunch I'd see a viable option

    Well, I prefer Sleep’s line of thought personally. But if for some reason we can’t stop/ban LBOs, then flip the bankruptcy law for corps. You have to pay non-executive employee severance, health, and pensions (preferably until they gain new employment) first, moving up the chain until you’re out of cash, so that by the time you get to the banks, you have to pay out of your own pocket to avoid getting nailed. Suddenly looting looks a lot less profitable when you don’t have a company and a bank to hide behind.

    Wouldn't employers just fire everybody prior to filing?

    Yes, they should just flat not be able to do this.

    If a capitalist or capital firm like bain wants to take out a loan to buy a business the simply shouldn't be able to shift the debt burden to the thing they just bought. They should be on the hook for the money they borrowed to buy the company, even if that company they just bought fails miserably. They shouldn't be able to buy the company, shift the debt to them, run it into the ground to line their pockets, declare bankruptcy for the company they just ran into the ground, then pay off a fraction of the debt they took on to buy the company in the first place.

    It's just a thing we shouldn't allow people to do.

  • milskimilski Poyo! Registered User regular
    Trajan45 wrote: »
    I skipped to the back here so maybe it was already talked about, but what does Bain Capitol get out of these kinds of moves (buying company's and saddling them with debt)?

    My understanding is essentially this:
    1. Bain buys TRU with lots of debt.
    2. Bain puts this debt on TRU's books, and it becomes first priority of payment in front of existing TRU debt.
    3. Bain makes the minimum payments on this debt, while the rest of the profit is paid out as executive compensation. (Maybe make some noise about Ch.11 bankruptcy to make this compensation seem justified to tuen the company around).
    4. Bain makes TRU declare banktuptcy, selling off all TRU assets and getting golden parachutes.
    5. Bain's leverage buyout debt is paid off with the sale, leaving those creditors happy. Smaller creditors and employees are not likely to be paid out.

    Effectively, Bain and the bank agreed to split up the profits for a few years then throw away the corpse, fucking over other creditors in the process at minimal risk.

    I ate an engineer
  • milskimilski Poyo! Registered User regular
    Paladin wrote: »
    Matev wrote: »
    Paladin wrote: »
    Sleep wrote: »
    Paladin wrote: »
    Is the only solution government?

    Yes

    The rich certainly aren't going to be shamed into not looting the economy at the expense of others, and they certainly aren't going to do it out of the niceness of their hearts.

    Government regulation of leveraged buyouts, or a strengthening of the safety net so as to make sure the folks the rich are fuckin out of jobs are taken care of is really the only solution here.

    Neither will happen.

    If there was a capitalist way to eat their lunch I'd see a viable option

    Well, I prefer Sleep’s line of thought personally. But if for some reason we can’t stop/ban LBOs, then flip the bankruptcy law for corps. You have to pay non-executive employee severance, health, and pensions (preferably until they gain new employment) first, moving up the chain until you’re out of cash, so that by the time you get to the banks, you have to pay out of your own pocket to avoid getting nailed. Suddenly looting looks a lot less profitable when you don’t have a company and a bank to hide behind.

    Wouldn't employers just fire everybody prior to filing?

    "Firing employees to avoid legally mandated compensation" is pretty easy to prove, especially with a purge.

    I ate an engineer
  • Trajan45Trajan45 Registered User regular
    Sleep wrote: »
    Matev wrote: »
    Trajan45 wrote: »
    I skipped to the back here so maybe it was already talked about, but what does Bain Capitol get out of these kinds of moves (buying company's and saddling them with debt)?

    They service the bare minimum of the debt (which they used to buy the company to begin with), skim the profits, then when they go bankrupt, sell the component parts of the company off to pay off the bank loan that way, and don’t get punished for it.

    All the while paying their Bain capitol employees as the c level positions in the company for a giant salary with bonuses if I'm not mistaken.

    I guess that makes sense. It just seems strange, they'd have to drop 1 billion of their own money on this. Did they think they could skim 1b from a declining toy store? It only makes sense if folks in Bain Capitol also sit on the boards of the banks they get the loans from or as mentioned, put all their own people in high paying leadership positions.

    Origin ID\ Steam ID: Warder45
  • SleepSleep Registered User regular
    edited March 2018
    Trajan45 wrote: »
    Sleep wrote: »
    Matev wrote: »
    Trajan45 wrote: »
    I skipped to the back here so maybe it was already talked about, but what does Bain Capitol get out of these kinds of moves (buying company's and saddling them with debt)?

    They service the bare minimum of the debt (which they used to buy the company to begin with), skim the profits, then when they go bankrupt, sell the component parts of the company off to pay off the bank loan that way, and don’t get punished for it.

    All the while paying their Bain capitol employees as the c level positions in the company for a giant salary with bonuses if I'm not mistaken.

    I guess that makes sense. It just seems strange, they'd have to drop 1 billion of their own money on this. Did they think they could skim 1b from a declining toy store? It only makes sense if folks in Bain Capitol also sit on the boards of the banks they get the loans from or as mentioned, put all their own people in high paying leadership positions.

    Leveraged buyout... They dropped little if any of their own money on this

    Sleep on
  • milskimilski Poyo! Registered User regular
    edited March 2018
    Trajan45 wrote: »
    Sleep wrote: »
    Matev wrote: »
    Trajan45 wrote: »
    I skipped to the back here so maybe it was already talked about, but what does Bain Capitol get out of these kinds of moves (buying company's and saddling them with debt)?

    They service the bare minimum of the debt (which they used to buy the company to begin with), skim the profits, then when they go bankrupt, sell the component parts of the company off to pay off the bank loan that way, and don’t get punished for it.

    All the while paying their Bain capitol employees as the c level positions in the company for a giant salary with bonuses if I'm not mistaken.

    I guess that makes sense. It just seems strange, they'd have to drop 1 billion of their own money on this. Did they think they could skim 1b from a declining toy store? It only makes sense if folks in Bain Capitol also sit on the boards of the banks they get the loans from or as mentioned, put all their own people in high paying leadership positions.

    Profits were $400m/year

    milski on
    I ate an engineer
  • PaladinPaladin Registered User regular
    Sleep wrote: »
    Paladin wrote: »
    Matev wrote: »
    Paladin wrote: »
    Sleep wrote: »
    Paladin wrote: »
    Is the only solution government?

    Yes

    The rich certainly aren't going to be shamed into not looting the economy at the expense of others, and they certainly aren't going to do it out of the niceness of their hearts.

    Government regulation of leveraged buyouts, or a strengthening of the safety net so as to make sure the folks the rich are fuckin out of jobs are taken care of is really the only solution here.

    Neither will happen.

    If there was a capitalist way to eat their lunch I'd see a viable option

    Well, I prefer Sleep’s line of thought personally. But if for some reason we can’t stop/ban LBOs, then flip the bankruptcy law for corps. You have to pay non-executive employee severance, health, and pensions (preferably until they gain new employment) first, moving up the chain until you’re out of cash, so that by the time you get to the banks, you have to pay out of your own pocket to avoid getting nailed. Suddenly looting looks a lot less profitable when you don’t have a company and a bank to hide behind.

    Wouldn't employers just fire everybody prior to filing?

    Yes, they should just flat not be able to do this.

    If a capitalist or capital firm like bain wants to take out a loan to buy a business the simply shouldn't be able to shift the debt burden to the thing they just bought. They should be on the hook for the money they borrowed to buy the company, even if that company they just bought fails miserably. They shouldn't be able to buy the company, shift the debt to them, run it into the ground to line their pockets, declare bankruptcy for the company they just ran into the ground, then pay off a fraction of the debt they took on to buy the company in the first place.

    It's just a thing we shouldn't allow people to do.

    The problem is Hollywood would fight against this. No industry is for this.

    Also these companies could just gig economy everything.

    We need a billionaire who is really into toys

    Marty: The future, it's where you're going?
    Doc: That's right, twenty five years into the future. I've always dreamed on seeing the future, looking beyond my years, seeing the progress of mankind. I'll also be able to see who wins the next twenty-five world series.
  • CelestialBadgerCelestialBadger Registered User regular
    Sleep wrote: »
    Paladin wrote: »
    Matev wrote: »
    Paladin wrote: »
    Sleep wrote: »
    Paladin wrote: »
    Is the only solution government?

    Yes

    The rich certainly aren't going to be shamed into not looting the economy at the expense of others, and they certainly aren't going to do it out of the niceness of their hearts.

    Government regulation of leveraged buyouts, or a strengthening of the safety net so as to make sure the folks the rich are fuckin out of jobs are taken care of is really the only solution here.

    Neither will happen.

    If there was a capitalist way to eat their lunch I'd see a viable option

    Well, I prefer Sleep’s line of thought personally. But if for some reason we can’t stop/ban LBOs, then flip the bankruptcy law for corps. You have to pay non-executive employee severance, health, and pensions (preferably until they gain new employment) first, moving up the chain until you’re out of cash, so that by the time you get to the banks, you have to pay out of your own pocket to avoid getting nailed. Suddenly looting looks a lot less profitable when you don’t have a company and a bank to hide behind.

    Wouldn't employers just fire everybody prior to filing?

    Yes, they should just flat not be able to do this.

    If a capitalist or capital firm like bain wants to take out a loan to buy a business the simply shouldn't be able to shift the debt burden to the thing they just bought. They should be on the hook for the money they borrowed to buy the company, even if that company they just bought fails miserably. They shouldn't be able to buy the company, shift the debt to them, run it into the ground to line their pockets, declare bankruptcy for the company they just ran into the ground, then pay off a fraction of the debt they took on to buy the company in the first place.

    It's just a thing we shouldn't allow people to do.

    Right, that should be fraud.

  • ArbitraryDescriptorArbitraryDescriptor changed Registered User regular
    edited March 2018
    Paladin wrote: »
    Capt Howdy wrote: »
    Paladin wrote: »
    Is the only solution government?

    Sort of. Leveraged buyouts need rules so those doing the buying don't profit from intentionally tanking the company they bought.

    I just don't see it happening unless an essential service gets taken out. Government doesn't respond that well to public outcry.

    They tend to react to massive spikes in unemployment though:
    As a result, delinquent payments on shopping centers and other commercial real estate have spiked, as high as one-quarter of all loans in some parts of the country. A hundred thousand retail jobs were lost from October 2016 to April 2017; in June, 1,000 stores closed in a week. And this will get worse: Only $100 million in retail debt came due this year, but there’s $1.9 billion next year and $5 billion on average due between 2019 and 2025. That threatens the retail sales and cashiers who make up 6 percent of the entire U.S. workforce, a total of 8 million jobs. These workers are not confined to any one region; the entire country will share in the pain.

    Before all that happens, I'm kind of hoping the simultaneous collapse of iHeartMedia radio monopoly, for the same reason, will raise a red flag. Thought it too will probably be dismissed as "the Internet did it"

    (And I'm not sure you could unfuck what's already coming with legislation?)

    ArbitraryDescriptor on
  • SleepSleep Registered User regular
    Paladin wrote: »
    Capt Howdy wrote: »
    Paladin wrote: »
    Is the only solution government?

    Sort of. Leveraged buyouts need rules so those doing the buying don't profit from intentionally tanking the company they bought.

    I just don't see it happening unless an essential service gets taken out. Government doesn't respond that well to public outcry.

    They tend to react to massive spikes in unemployment though:
    As a result, delinquent payments on shopping centers and other commercial real estate have spiked, as high as one-quarter of all loans in some parts of the country. A hundred thousand retail jobs were lost from October 2016 to April 2017; in June, 1,000 stores closed in a week. And this will get worse: Only $100 million in retail debt came due this year, but there’s $1.9 billion next year and $5 billion on average due between 2019 and 2025. That threatens the retail sales and cashiers who make up 6 percent of the entire U.S. workforce, a total of 8 million jobs. These workers are not confined to any one region; the entire country will share in the pain.

    Before all that happens, I'm kind of hoping the simultaneous collapse of iHeartMedia radio monopoly, for the same reason, will raise a red flag. Thought it too will probably be dismissed as "the Internet did it"

    (And I'm not sure you could unfuck what's already coming with legislation?)

    You could unfuck it by taxing the shit out of the rich folks doing this looting, using that money to expand safety nets, and move towards a less employed populace without a more starving populace.

    However that too will not happen.

    Legislation of one form or another could definitely unfuck a lot of this. Either by stopping it from happening, or by making it so that it doesn't hurt as much when it does happen.

  • tbloxhamtbloxham Registered User regular
    Sleep wrote: »
    Paladin wrote: »
    Is the only solution government?

    Yes

    The rich certainly aren't going to be shamed into not looting the economy at the expense of others, and they certainly aren't going to do it out of the niceness of their hearts.

    Government regulation of leveraged buyouts, or a strengthening of the safety net so as to make sure the folks the rich are fuckin out of jobs are taken care of is really the only solution here.

    Neither will happen.

    Yeah, the big issue here is that lets imagine you travel back in time and arrive just after Toy's R Us gets bought by Bain capitol. You are a VERY persuasive person in terms of shaping consumer behaviour, and you have the power to effect the shopping preferences of lets say, 30% of Toy's R Us customers and you want to save the company. What do you do?

    If you make them enthusiastic about toys r us, and you double their purchashes, then Toys R Us brings in an extra 60 million a year in profits. Bain pockets the money. Toys R Us fails in a couple of years anyway due to no investment
    If you make them hate Bain capitol, and they no longer make purchases, then Toys R Us brings in 60 million less each year in profits. Bain bails out a few years earlier and Toys R Us fails.

    From the moment Bain took over, TRU was nothing but a corpse, and there was nothing any reasonable modification of consumer behaviour could have done about that. Which means this is nothing to do with consumer choice or "voting with your dollars" and can only be handled by government regulation.

    Leveraged buyouts are like high frequency trading. Sure, money is made, but it DOES NOT make the economy better, more responsive, or more efficient.

    "That is cool" - Abraham Lincoln
  • ArbitraryDescriptorArbitraryDescriptor changed Registered User regular
    edited March 2018
    Sleep wrote: »
    Paladin wrote: »
    Capt Howdy wrote: »
    Paladin wrote: »
    Is the only solution government?

    Sort of. Leveraged buyouts need rules so those doing the buying don't profit from intentionally tanking the company they bought.

    I just don't see it happening unless an essential service gets taken out. Government doesn't respond that well to public outcry.

    They tend to react to massive spikes in unemployment though:
    As a result, delinquent payments on shopping centers and other commercial real estate have spiked, as high as one-quarter of all loans in some parts of the country. A hundred thousand retail jobs were lost from October 2016 to April 2017; in June, 1,000 stores closed in a week. And this will get worse: Only $100 million in retail debt came due this year, but there’s $1.9 billion next year and $5 billion on average due between 2019 and 2025. That threatens the retail sales and cashiers who make up 6 percent of the entire U.S. workforce, a total of 8 million jobs. These workers are not confined to any one region; the entire country will share in the pain.

    Before all that happens, I'm kind of hoping the simultaneous collapse of iHeartMedia radio monopoly, for the same reason, will raise a red flag. Thought it too will probably be dismissed as "the Internet did it"

    (And I'm not sure you could unfuck what's already coming with legislation?)

    You could unfuck it by taxing the shit out of the rich folks doing this looting, using that money to expand safety nets, and move towards a less employed populace without a more starving populace.

    However that too will not happen.

    Legislation of one form or another could definitely unfuck a lot of this. Either by stopping it from happening, or by making it so that it doesn't hurt as much when it does happen.

    It seems like that would just accelerate the collapse as you'll be raising the minimum profitability threshold and removing the only reason they're still dragging the corpse around. Ex: One of the factors of TRU folding is that interest rates went up, so it wasn't worth it to Bain to refinance the debt and milk it for a few more years.

    The companies that are already fucked like this are just waiting to die. You'd need something like TARP to clear their debt; which would, of course, feed the vultures, but it would let the company continue. Bailing out the companies and not offenders is going to be a tough needle to thread after people saw how the survivng banks laughed off the mortgage collapse after they were bailed out.

    ArbitraryDescriptor on
  • SleepSleep Registered User regular
    Sleep wrote: »
    Paladin wrote: »
    Capt Howdy wrote: »
    Paladin wrote: »
    Is the only solution government?

    Sort of. Leveraged buyouts need rules so those doing the buying don't profit from intentionally tanking the company they bought.

    I just don't see it happening unless an essential service gets taken out. Government doesn't respond that well to public outcry.

    They tend to react to massive spikes in unemployment though:
    As a result, delinquent payments on shopping centers and other commercial real estate have spiked, as high as one-quarter of all loans in some parts of the country. A hundred thousand retail jobs were lost from October 2016 to April 2017; in June, 1,000 stores closed in a week. And this will get worse: Only $100 million in retail debt came due this year, but there’s $1.9 billion next year and $5 billion on average due between 2019 and 2025. That threatens the retail sales and cashiers who make up 6 percent of the entire U.S. workforce, a total of 8 million jobs. These workers are not confined to any one region; the entire country will share in the pain.

    Before all that happens, I'm kind of hoping the simultaneous collapse of iHeartMedia radio monopoly, for the same reason, will raise a red flag. Thought it too will probably be dismissed as "the Internet did it"

    (And I'm not sure you could unfuck what's already coming with legislation?)

    You could unfuck it by taxing the shit out of the rich folks doing this looting, using that money to expand safety nets, and move towards a less employed populace without a more starving populace.

    However that too will not happen.

    Legislation of one form or another could definitely unfuck a lot of this. Either by stopping it from happening, or by making it so that it doesn't hurt as much when it does happen.

    It seems like that would just accelerate the collapse as you'll be raising the minimum profitability threshold and removing the only reason they're still dragging the corpse around. Ex: One of the factors of TRU folding is that interest rates went up, so it wasn't worth it to Bain to refinance the debt and milk it for a few more years.

    The companies that are already fucked like this are just waiting to die. You'd need something like TARP to clear their debt; which would, of course, feed the vultures, but it would let the company continue. Bailing out the companies and not offenders is going to be a tough needle to thread after people saw how the survivng banks laughed off the mortgage collapse after they were bailed out.

    which is why, also making leveraged buyouts illegal would really help.

  • CelestialBadgerCelestialBadger Registered User regular
    Taxing the rich in general would not unfuck this particular abuse, because not all of them use it.

  • ArbitraryDescriptorArbitraryDescriptor changed Registered User regular
    edited March 2018
    Sleep wrote: »
    Paladin wrote: »
    Matev wrote: »
    Paladin wrote: »
    Sleep wrote: »
    Paladin wrote: »
    Is the only solution government?

    Yes

    The rich certainly aren't going to be shamed into not looting the economy at the expense of others, and they certainly aren't going to do it out of the niceness of their hearts.

    Government regulation of leveraged buyouts, or a strengthening of the safety net so as to make sure the folks the rich are fuckin out of jobs are taken care of is really the only solution here.

    Neither will happen.

    If there was a capitalist way to eat their lunch I'd see a viable option

    Well, I prefer Sleep’s line of thought personally. But if for some reason we can’t stop/ban LBOs, then flip the bankruptcy law for corps. You have to pay non-executive employee severance, health, and pensions (preferably until they gain new employment) first, moving up the chain until you’re out of cash, so that by the time you get to the banks, you have to pay out of your own pocket to avoid getting nailed. Suddenly looting looks a lot less profitable when you don’t have a company and a bank to hide behind.

    Wouldn't employers just fire everybody prior to filing?

    Yes, they should just flat not be able to do this.

    If a capitalist or capital firm like bain wants to take out a loan to buy a business the simply shouldn't be able to shift the debt burden to the thing they just bought. They should be on the hook for the money they borrowed to buy the company, even if that company they just bought fails miserably. They shouldn't be able to buy the company, shift the debt to them, run it into the ground to line their pockets, declare bankruptcy for the company they just ran into the ground, then pay off a fraction of the debt they took on to buy the company in the first place.

    It's just a thing we shouldn't allow people to do.

    Right, that should be fraud.

    Except it isn't "fraud," per se, as no one is being deceived. It's really no different than a car loan, except people work for and depend on your car. And since it's privately owned there's no fiduciary duty to run it well. The problem is that those being fucked are being fucked right to their face, but they have no say in it.

    Its more like reckless endangerment. If I sell off the smoke detectors and my kids' car seats, that's what I'm guilty of. That law exists because they can't stop me from doing it. So either a new fiscal context of those laws, or there needs to be some law respecting a fiduciary duty to employees if your company is at least this big. Example: Treat employee compensation/benefits as a first tier debt obligation.

    None of this "we can't pay out your accrued leave because bankruptcy, and JP Morgan wants their money." Now you pay that shit first. And I think that would give employees standing to challenge financial mismanagement just like a normal investor.

    ArbitraryDescriptor on
  • FryFry Registered User regular
    My experiences with TRU at various locations across the country over the years were definitely more in the "giant scary box" vein. They were often located on the outskirts of town, with giant empty parking lots that looked sad. I have a pretty vivid memory of picking up the eighty dollar ticket for Final Fantasy III off the wall o' tickets as a young lad. *sniffle*

    At least one location I can think of had an "adult toy" store at the far end of the parking lot. An amusing juxtaposition to be sure, but that couldn't have been good for TRU's business. :P

  • Giggles_FunsworthGiggles_Funsworth Blight on Discourse Bay Area SprawlRegistered User regular
    Sleep wrote: »
    Paladin wrote: »
    Capt Howdy wrote: »
    Paladin wrote: »
    Is the only solution government?

    Sort of. Leveraged buyouts need rules so those doing the buying don't profit from intentionally tanking the company they bought.

    I just don't see it happening unless an essential service gets taken out. Government doesn't respond that well to public outcry.

    They tend to react to massive spikes in unemployment though:
    As a result, delinquent payments on shopping centers and other commercial real estate have spiked, as high as one-quarter of all loans in some parts of the country. A hundred thousand retail jobs were lost from October 2016 to April 2017; in June, 1,000 stores closed in a week. And this will get worse: Only $100 million in retail debt came due this year, but there’s $1.9 billion next year and $5 billion on average due between 2019 and 2025. That threatens the retail sales and cashiers who make up 6 percent of the entire U.S. workforce, a total of 8 million jobs. These workers are not confined to any one region; the entire country will share in the pain.

    Before all that happens, I'm kind of hoping the simultaneous collapse of iHeartMedia radio monopoly, for the same reason, will raise a red flag. Thought it too will probably be dismissed as "the Internet did it"

    (And I'm not sure you could unfuck what's already coming with legislation?)

    You could unfuck it by taxing the shit out of the rich folks doing this looting, using that money to expand safety nets, and move towards a less employed populace without a more starving populace.

    However that too will not happen.

    Legislation of one form or another could definitely unfuck a lot of this. Either by stopping it from happening, or by making it so that it doesn't hurt as much when it does happen.

    It seems like that would just accelerate the collapse as you'll be raising the minimum profitability threshold and removing the only reason they're still dragging the corpse around. Ex: One of the factors of TRU folding is that interest rates went up, so it wasn't worth it to Bain to refinance the debt and milk it for a few more years.

    The companies that are already fucked like this are just waiting to die. You'd need something like TARP to clear their debt; which would, of course, feed the vultures, but it would let the company continue. Bailing out the companies and not offenders is going to be a tough needle to thread after people saw how the survivng banks laughed off the mortgage collapse after they were bailed out.

    Tax them at the rate of their gain from the leveraged buyouts and subsidize the businesses they fucked with the proceeds. Nobody would be harmed by the demise of these financial companies and the banks deserve to take it on the nose when they go bankrupt.

  • Knight_Knight_ Dead Dead Dead Registered User regular
    the problem is that the bank gets paid first, so the bank has no risk, they get some interest payments and get the principal back when it craters. they are then happy to work with bain on this scheme the next go around, and the next one, and the next one.

    if the bank didn't get paid first, they wouldn't be willing to go along with the scheme because they only get the principal back if it's actually paid back.

    aeNqQM9.jpg
  • RT800RT800 Registered User regular
    How exactly were they skimming profits?

    I though most of the money went toward paying the debt.

  • milskimilski Poyo! Registered User regular
    RT800 wrote: »
    How exactly were they skimming profits?

    I though most of the money went toward paying the debt.

    "Most" of $400M/year is still up to $200M a year for themselves.

    I ate an engineer
  • tbloxhamtbloxham Registered User regular
    Knight_ wrote: »
    the problem is that the bank gets paid first, so the bank has no risk, they get some interest payments and get the principal back when it craters. they are then happy to work with bain on this scheme the next go around, and the next one, and the next one.

    if the bank didn't get paid first, they wouldn't be willing to go along with the scheme because they only get the principal back if it's actually paid back.

    I think the main problem is that the big debt from the bank gets paid before any other obligations. US bankruptcy law should be reformed so that you get repaid according to the fraction of the debt you hold. So everyone gets something. That way the bank would be unwilling to loan to someone who they thought was going to do this.

    "That is cool" - Abraham Lincoln
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