DC Tom Posted July 1, 2012 Share Posted July 1, 2012 And another thread heads towards the ditch... Let's be honest. This one started there. Link to comment Share on other sites More sharing options...
tomato can Posted July 1, 2012 Share Posted July 1, 2012 (edited) I know I shouldn't get into this with you because it's a waste of time but did you actually think GM & Chrysler were going to close up shop? Obama should have let them go through the bankruptcy process and let the courts decide the fate of the union pension funds and the bondholders. Regardless, from the article that you linked: "Still, Romney never made day-to-day management decisions at the companies Bain invested in. What's more, Romney left Bain to run the Salt Lake City Winter Olympics in February 1999, three months before Ampad announced the closing of the facility in Holland. Above all, Ampad was something of an outlier. As the New York Times reported last week, Bain invested in more than 40 companies between 1984 and 1999, and only seven eventually went bankrupt.Much more common were the successes, such as Staples and Domino's Pizza, which Bain nursed into the thriving companies we know today. "The jobs created at Bain Capital by companies that we helped start or that we helped manage, those companies today employ well over 100,000 more jobs than those that were lost," Romney told Bloomberg." I give credit to Bain Capital for doing the right thing by those 33 companies that they helped get back on track. Let's talk about KB Toys one of the companies that they bankrupted. Bain purchased KB for 305 million and took them private. Bain put up only 18 million in cash and leveraged the rest of the money against the assests of the company. In 2 years Bain paid itself 85 million in dividends a 372% return on investment. Due to increasing competition from national discount chains such as Wal-Mart and Target and its enormous debt they filed bankruptcy protection in 2004 and closed all 365 stores. I think most people have a problem with them paying themself 85 million to walk this company right into bankruptcy. But leveraging the overwhelming majority of this purchase against the companies assests and getting a 372% return on investment! Who is on the hook for that money that was leveraged? Edited July 1, 2012 by tomato can Link to comment Share on other sites More sharing options...
ExiledInIllinois Posted July 1, 2012 Share Posted July 1, 2012 I give credit to Bain Capital for doing the right thing by those 33 companies that they helped get back on track. Let's talk about KB Toys one of the companies that they bankrupted. Bain purchased KB for 305 million and took them private. Bain put up only 18 million in cash and leveraged the rest of the money against the assests of the company. In 2 years Bain paid itself 85 million in dividends a 372% return on investment. Due to increasing competition from national discount chains such as Wal-Mart and Target and its enormous debt they filed bankruptcy protection in 2004 and closed all 365 stores. I think most people have a problem with them paying themself 85 million to walk this company right into bankruptcy. But leveraging the overwhelming majority of this purchase against the companies assests and getting a 372% return on investment! Who is on the hook for that money that was leveraged? They knew KB Toys was doomed from the get go... They cannibalized them. Remember the video a while back... The kid with the backpack? He was getting beat, dazed and confused... Yet, it looked like someone was trying win his trust and help him... Only thing was that person's accomplice was robbing him... Stealing out of the backpack. That's Bain Capital in a nutshell. The ends don't justify the means. And this is the guy, RomneyMussolini, we want keeping the trains on time?... No thanks, I will walk and be late! Link to comment Share on other sites More sharing options...
Nanker Posted July 1, 2012 Share Posted July 1, 2012 How many people lost their jobs at Solyndra? Link to comment Share on other sites More sharing options...
ExiledInIllinois Posted July 1, 2012 Share Posted July 1, 2012 How many people lost their jobs at Solyndra? How much money did they make? Was it a case of vulture capitalism like Romney engages in? Link to comment Share on other sites More sharing options...
tomato can Posted July 1, 2012 Share Posted July 1, 2012 They knew KB Toys was doomed from the get go... They cannibalized them. Remember the video a while back... The kid with the backpack? He was getting beat, dazed and confused... Yet, it looked like someone was trying win his trust and help him... Only thing was that person's accomplice was robbing him... Stealing out of the backpack. That's Bain Capital in a nutshell. The ends don't justify the means. And this is the guy, RomneyMussolini, we want keeping the trains on time?... No thanks, I will walk and be late! KB wasn't doomed from the start but they most certainly cannibalized them. See KB went through a restructuring in 1996. They closed unprofitable stores and increased profits and got themselves back on very good footing. Bain purchased them with only 6% cash of value and shortly there after take out dividends at over 400% of their investment. Saddling KB with that much debt and taking out astronomical dividends they had no choice but to go bankrupt. Bain took a company that had been restructed and was making profit and raided it of its cash. There is no way around this. Mitt was sitting on the board of that company. Leveraging 94% of the purchase against the companies assests, then walking them right into bankruptcy, and leaving someone else holding a bag of crap is criminal. Everything they did after acquiring KB was just egregious! Should be unconstitutional! Link to comment Share on other sites More sharing options...
Nanker Posted July 1, 2012 Share Posted July 1, 2012 How much money did they make? Was it a case of vulture capitalism like Romney engages in? About $500 million of US taxpayer's money. That's significant. Though this wasn't "vulture" capitalism - it was more like Das Kapitalism. Link to comment Share on other sites More sharing options...
Rob's House Posted July 1, 2012 Share Posted July 1, 2012 How much money did they make? Was it a case of vulture capitalism like Romney engages in? Vulture Capitalism - When investors streamline a failing company saving many, but not all, jobs that would have been eliminated when the company went under. Link to comment Share on other sites More sharing options...
/dev/null Posted July 1, 2012 Share Posted July 1, 2012 How much money did they make? Was it a case of vulture capitalism like Romney engages in? Vulture Capitalism I got another term for you. Crony Capitalism As in, donate money to The People's Party who when in office directs taxpayer money back towards your failing business But hey, if you want to hate on rich corporate types that get a big bonus: http://finance.yahoo.com/news/bankruptcy-judge-approves-solyndra-bonuses-221852650.html Link to comment Share on other sites More sharing options...
Doc Posted July 1, 2012 Share Posted July 1, 2012 I give credit to Bain Capital for doing the right thing by those 33 companies that they helped get back on track. Let's talk about KB Toys one of the companies that they bankrupted. Bain purchased KB for 305 million and took them private. Bain put up only 18 million in cash and leveraged the rest of the money against the assests of the company. In 2 years Bain paid itself 85 million in dividends a 372% return on investment. Due to increasing competition from national discount chains such as Wal-Mart and Target and its enormous debt they filed bankruptcy protection in 2004 and closed all 365 stores. I think most people have a problem with them paying themself 85 million to walk this company right into bankruptcy. But leveraging the overwhelming majority of this purchase against the companies assests and getting a 372% return on investment! Who is on the hook for that money that was leveraged? My guess would be KB Toys' creditors. And again, when did Romney leave Bain? About $500 million of US taxpayer's money. That's significant. Though this wasn't "vulture" capitalism - it was more like Das Kapitalism. Unfortunately, Solyndra is one of 3 companies that Barry wasted taxpayers' money on. Not to mention the Volt is stalled and his $500M green jobs training program is being investigated. If only Barry could point to more success stories than failures. Link to comment Share on other sites More sharing options...
OCinBuffalo Posted July 1, 2012 Share Posted July 1, 2012 KB wasn't doomed from the start but they most certainly cannibalized them. See KB went through a restructuring in 1996. They closed unprofitable stores and increased profits and got themselves back on very good footing. Bain purchased them with only 6% cash of value and shortly there after take out dividends at over 400% of their investment. Saddling KB with that much debt and taking out astronomical dividends they had no choice but to go bankrupt. Bain took a company that had been restructed and was making profit and raided it of its cash. There is no way around this. Mitt was sitting on the board of that company. Leveraging 94% of the purchase against the companies assests, then walking them right into bankruptcy, and leaving someone else holding a bag of crap is criminal. Everything they did after acquiring KB was just egregious! Should be unconstitutional! You cited Walmart, Toys R US, and whatever other competition out there...yet you cannot conceive that busting KB out was the best plan? Would it have been better to declare bankruptcy now...or declare it 2 years from now? What difference does that make? KB was most likely going down no matter what. With the competition they had with their huge selections and low prices, and, KB's positioning as the tiny, "mall toy store" who has to pay mall rent prices? Yeah, it's a pretty easy call that KB was going down. The only question was: when? Better to buy it now, do what Bain did, and get something out of it....rather than waste 2-3 years trying to be efficient and effective in a broken business model. Who exactly is left "holding the bag" in an LBO again? Link to comment Share on other sites More sharing options...
3rdnlng Posted July 1, 2012 Author Share Posted July 1, 2012 KB wasn't doomed from the start but they most certainly cannibalized them. See KB went through a restructuring in 1996. They closed unprofitable stores and increased profits and got themselves back on very good footing. Bain purchased them with only 6% cash of value and shortly there after take out dividends at over 400% of their investment. Saddling KB with that much debt and taking out astronomical dividends they had no choice but to go bankrupt. Bain took a company that had been restructed and was making profit and raided it of its cash. There is no way around this. Mitt was sitting on the board of that company. Leveraging 94% of the purchase against the companies assests, then walking them right into bankruptcy, and leaving someone else holding a bag of crap is criminal. Everything they did after acquiring KB was just egregious! Should be unconstitutional! They were still going strong enough in 2007 when GE Commercial Credit lent them 200 million. I wonder if GE looked into their finances before lending them that money? Maybe they just did what the DOE did when the Omama administration needed a photo-op and approved the 535 million loan guarantee for Solyndra. Link to comment Share on other sites More sharing options...
Adam Posted July 1, 2012 Share Posted July 1, 2012 I cringed when I read that subject Link to comment Share on other sites More sharing options...
tomato can Posted July 2, 2012 Share Posted July 2, 2012 My guess would be KB Toys' creditors. And again, when did Romney leave Bain? And who do you think the creditors were? I know Mitt was gone from Bain when they purchased KB. My point was that while he was there they engaged in these types of things. Link to comment Share on other sites More sharing options...
tomato can Posted July 2, 2012 Share Posted July 2, 2012 (edited) You cited Walmart, Toys R US, and whatever other competition out there...yet you cannot conceive that busting KB out was the best plan? I wont concede that busting them was the best plan. When Bain made the purchase they were a profitable company. I will concede with the competition that was out there they needed to get creative and change the way they did business in order keep some of their market share and remain profitable. We will never know that outcome because Bain made sure of that by cannablizing that company and saddeling it with enormous debt. Would it have been better to declare bankruptcy now...or declare it 2 years from now? What difference does that make? KB was most likely going down no matter what. With the competition they had with their huge selections and low prices, and, KB's positioning as the tiny, "mall toy store" who has to pay mall rent prices? Yeah, it's a pretty easy call that KB was going down. Again lots of companies make changes to ensure they remain viable. They same could have possibly been done with KB. Real Estate people for companies like KB are good at negotiating rent with the malls. The tiny mall stores like KB are usually about 700 square foot. At $10 a square foot that $7,000 a month rent. Because sales at times run high and $10 a square foot is very reasonable there is usually a breakpoint in the terms of the lease. Once the retailer is above that breakpoint they pay the landlord a couple of percent of the sales. Payroll is not much of a problem, aside from the manager the sales people are part timers and made minimum wage. The only question was: when? Better to buy it now, do what Bain did, and get something out of it....rather than waste 2-3 years trying to be efficient and effective in a broken business model. Who exactly is left "holding the bag" in an LBO again? That is crap. A company that is turning profit is not a broken business model. Yes there were challenges that lied ahead. What Bain did was unconscionable. They got a 372% return on investment. Some investment bank was left holding the bag, the malls lost a rent paying national tenant, and people lost jobs. Bain came in like a theif in the night and made a ridiculous profit. There were a lot more losers than winners. They were still going strong enough in 2007 when GE Commercial Credit lent them 200 million. I wonder if GE looked into their finances before lending them that money? Maybe they just did what the DOE did when the Omama administration needed a photo-op and approved the 535 million loan guarantee for Solyndra. Strong enough Bain put them into bankruptcy in 2004. Another company took them over out of bankputcy in 2005. The company was in such bad shape and credit markets were so tight that GE through them a life line. A short time after that GE quickly changed the terms of that life line that they knew KB would not be able to meet. The company was done after that. Complete liquidation and out of business. This was a company that was around for many years and was a good thriving business until these people destroyed it. The Solyndra deal was a bunch of crap also. I can assure of this you won't find one single post from me singing the praises of a politician. Edited July 2, 2012 by tomato can Link to comment Share on other sites More sharing options...
3rdnlng Posted July 2, 2012 Author Share Posted July 2, 2012 I wont concede that busting them was the best plan. When Bain made the purchase they were a profitable company. I will concede with the competition that was out there they needed to get creative and change the way they did business in order keep some of their market share and remain profitable. We will never know that outcome because Bain made sure of that by cannablizing that company and saddeling it with enormous debt. Again lots of companies make changes to ensure they remain viable. They same could have possibly been done with KB. Real Estate people for companies like KB are good at negotiating rent with the malls. The tiny mall stores like KB are usually about 700 square foot. At $10 a square foot that $7,000 a month rent. Because sales at times run high and $10 a square foot is very reasonable there is usually a breakpoint in the terms of the lease. Once the retailer is above that breakpoint they pay the landlord a couple of percent of the sales. Payroll is not much of a problem, aside from the manager the sales people are part timers and made minimum wage. That is crap. A company that is turning profit is not a broken business model. Yes there were challenges that lied ahead. What Bain did was unconscionable. They got a 372% return on investment. Some investment bank was left holding the bag, the malls lost a rent paying national tenant, and people lost jobs. Bain came in like a theif in the night and made a ridiculous profit. There were a lot more losers than winners. Strong enough Bain put them into bankruptcy in 2004. Another company took them over out of bankputcy in 2005. The company was in such bad shape and credit markets were so tight that GE through them a life line. A short time after that GE quickly changed the terms of that life line that they knew KB would not be able to meet. The company was done after that. Complete liquidation and out of business. This was a company that was around for many years and was a good thriving business until these people destroyed it. The Solyndra deal was a bunch of crap also. I can assure of this you won't find one single post from me singing the praises of a politician. That's just plain wrong. KB's stores were not much larger than a two car garage? Rent per s/f is figured monthly? Ha! Rent in a mall is about $10 a s/f? This is a subject that you shouldn't have commented on. In addition, what makes you think GE Capital is going to "through" them a lifeline because they felt sorry for them because they were in such bad shape? Then GE is going to change the terms shortly thereafter so it puts KB out of business, thus making their note virtually worthless? It is obvious you don't know what you are talking about. It's also possible that you just posted drunk as hell to come up with schit like this. Link to comment Share on other sites More sharing options...
Doc Posted July 2, 2012 Share Posted July 2, 2012 And who do you think the creditors were? As long as it wasn't the government/taxpayers, I don't care. I know Mitt was gone from Bain when they purchased KB. My point was that while he was there they engaged in these types of things. So far I've only heard of the companies that went belly-up well after Romney left Bain. Perhaps the real problem was his departure? Link to comment Share on other sites More sharing options...
OCinBuffalo Posted July 2, 2012 Share Posted July 2, 2012 (edited) I wont concede that busting them was the best plan. When Bain made the purchase they were a profitable company. I will concede with the competition that was out there they needed to get creative and change the way they did business in order keep some of their market share and remain profitable. We will never know that outcome because Bain made sure of that by cannablizing that company and saddeling it with enormous debt. I said conceive...as in...understand that there's more than one way to think of this, not concede. It does not matter what we know: the only thing that matters is Bain assessed the client, and took their shot accordingly. That's business. Somebody had to agree to the sale of KB = stockholders. If they made a bad call, that's on them, not Bain. You're upset because somebody did a 6% cash LBO...as though that doesn't happen, for a lot less, every day? Grow up. Again lots of companies make changes to ensure they remain viable. They same could have possibly been done with KB. Real Estate people for companies like KB are good at negotiating rent with the malls. The tiny mall stores like KB are usually about 700 square foot. At $10 a square foot that $7,000 a month rent. Because sales at times run high and $10 a square foot is very reasonable there is usually a breakpoint in the terms of the lease. Once the retailer is above that breakpoint they pay the landlord a couple of percent of the sales. Payroll is not much of a problem, aside from the manager the sales people are part timers and made minimum wage. Let's see...should we believe you....or industry analysts? "KB was for many years in a precarious position because of where it was in the industry. It wasn't able to compete on price," said Sean McGowan a senior leisure and lifestyle analyst for Needham & Co. "... If you layer on financial strain, that could push it to the breaking point." "Their business model was obsolete," he said. "The world had changed. KB had not changed." Small mall toy stores, such as KB's, couldn't carry enough inventory — or stay tidy. But mall rents were high, and leases long, limiting KB's ability to shift to compete with its larger rivals. Meanwhile, Target, Walmart and Toys "R" Us could carry far more toys and heavily discount the hottest merchandise. "Knowing all these facts, why is the consumer going to go in there? Is it the higher prices or the old toys?" Silver said. :lol: What about Bain's role? "To me, it's almost irrelevant," Silver said. "You take a business model that doesn't work, it doesn't matter how much money you have, or how much debt you have." You have been defeated...by Politifact. Yes, that rating says "mostly false". Thanks for playing. Now, if you want to start laying money on stuff like this, please, come back any time. Dude you are new here, so I'll just tell you: I had this link 2 posts ago. I just wanted to see how you'd go about FAILing. The good news is: you proved you can think for yourself, and I appreciate you actually putting in the effort. So, that's something. At least you didn't respond by pasting in something tenuously related from wiki.... That is crap. A company that is turning profit is not a broken business model. Yes there were challenges that lied ahead. What Bain did was unconscionable. They got a 372% return on investment. Some investment bank was left holding the bag, the malls lost a rent paying national tenant, and people lost jobs. Bain came in like a theif in the night and made a ridiculous profit. There were a lot more losers than winners. What Bain did is do what they get paid to do. Somebody got a good bonus for finding and executing on that deal. If that was me, I'd do the same thing...or I'd get fired. You may not like it, but that is irrelevant. Nobody says you have to do this job. You can do whatever it is you do. But, if I execute an offer letter that says "evaluate businesses and then advise on what to do with them", then that's what I am doing. It all depends on that evaluation. Companies like KB are no different than Old Yeller. Keeping them in business just prolongs the inevitable, and causes MORE pain in the long run. The first thing my Policy professor said on day one of class: "At every monthly executive officer meeting, we must first consider whether we should stay in this business, or in business in general". CLEARLY, the KB executive suite must have missed that day. This is textbook stuff, as in, KB makes a fine case study for what not to do. If I was a Policy professor, I'd use KB in my class. But you are telling us to ignore it, and instead are calling it a "healthy company"? If it was healthy, the stockholders never would have agreed to Bain's offer....but they did, didn't they? Edit: Why didn't the execs at KB do right by their stockholders, and, as soon as it became clear that Toys R Us and Walmart weren't going away, and that they were in trouble, SELL their company to one of them? That's what I would have done. That's what gets you the next job as a CEO...because you have proven that you know the game, and play it properly. Strong enough Bain put them into bankruptcy in 2004. Another company took them over out of bankputcy in 2005. The company was in such bad shape and credit markets were so tight that GE through them a life line. A short time after that GE quickly changed the terms of that life line that they knew KB would not be able to meet. The company was done after that. Complete liquidation and out of business. This was a company that was around for many years and was a good thriving business until these people destroyed it. The Solyndra deal was a bunch of crap also. I can assure of this you won't find one single post from me singing the praises of a politician. This simply factually incorrect. It's a lie. See Politifact. Well, not a total lie, just "mostly false". The only question that remains: will you continue to believe the mostly false? Or, will you wise up? Edited July 2, 2012 by OCinBuffalo Link to comment Share on other sites More sharing options...
DC Tom Posted July 2, 2012 Share Posted July 2, 2012 The only question that remains: will you continue to believe the mostly false? Or, will you wise up? Are we taking bets? Link to comment Share on other sites More sharing options...
OCinBuffalo Posted July 2, 2012 Share Posted July 2, 2012 Are we taking bets? Boy I hope so. Link to comment Share on other sites More sharing options...
Recommended Posts