Basically, the company had to pay for its own buyout when private equity firms KKL, Vornado, and Bain bought the company for $6.6 billion, mostly with loans.
Because the company then had to pay off those extreme loans, they were forced to sell off their assets and property, which they leased back from the very private equity firms that now owned them.
The same thing happened more recently with Red Lobster and JoAnn Fabrics.
TIL: stock buybacks were considered insider trading before Reagan made them legal
Is there anything that Reagan hasn’t fucked?
Whatever he didn’t got fucked by Clinton.
He did not. Have. Sexual relations. With that. Policy.
I watch the YouTube channel “Company Man” that does a bunch of interesting business stories. 95% of the “Decline of (brand)” or “Rise and Fall of (brand)” videos are because of leveraged buyouts.
A group of idiots borrow billions of dollars, throw the unrecoverable debt onto the books, slowly killing the company, and then it’s dead.
Who loans this money? How does that work? I understand the rest of it about being a bastard who collects millions in salary and bonuses while driving a company into the ground. I just don’t understand where the money comes from, or why.
What will really shift your thinking is finding out that they have done this to almost all the hospitals in the United States, which is part of the reason healthcare costs have skyrocketed.
Hospitals need more to pay their leases, health insurers need to pay more to feed the hospitals machine, premiums go way up/more services restricted/more cost share (copay etc)
If you think it’s shitty that consumers can’t own anything anymore, they stole your wellbeing services while you were bitching about how little is still on Netflix these days
This is enough reasoning to say that capitalism is the single greatest enemy of mankind. The search for endless profit will kill everyone.
Capitalism is a great system as long as it’s regulated. It’s been more and more destructive and caused catastrophic shifts in wealth distribution since deregulation started with Reagan
Careful now, they’re about to classify criticism of capitalism terrorism.
Nono its the best system. All others have failed. You cant have the American dream without capitalism.
/LIES FROM FASCISTS
And now they want access to 401Ks
It isn’t the only company to die this way. Sears was cellar boxed the same as toys r us. It was what was intended for gamestop but the whole wallstreetbets thing happened and prevented it.
And the same thing is happening to hospitals all over the US, which should fucking terrify you.
DOGE used this same model on the US government.
Capitalism is not rational
Is this why the one in my area has been closed, but hasn’t been turned into something else? It even still has the signage.
No, that’s because no one has turned it to anything else. So the owners collect a tax write off until they can sell it or lease it. The ones in my area have been long since torn down or remodeled into something else. It took 20 years for all the Kmarts around me to disappear. Large assets like these take time to move and are expensive to acquire. Very few companies are going to jump on them, especially since more often then not, a new building is cheaper then a remodel on a 30 year old one.
Time to kill private equity……with crippling regulation and accountability of course
Not when you live in a country where private equity basically owns the government.
Nah just make the rich people pay their taxes. Then they won’t have money for stupid shit like this
One of the reasons they have so much money is the financial trickery that private equity employs
