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Old March 27, 2018, 09:52   #1
Nihonto Chicken
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Remington Bankruptcy

FWIW, link below to a perspective on the Remington bankruptcy filing. No personal assurance of validity of this view (web site is liberal, though often very good at exposing banking misdeeds).

https://www.nakedcapitalism.com/2018...ankruptcy.html

The money quote:

"What causes a company to file for bankruptcy protection isn’t declining sales or thin profits but debt (and sometimes other obligations) that it can no longer handle. A PE firm could invest equity in the company to pay down this debt burden, and it could invest equity to improve the company’s operations. But that’s a not its job. Its job is to load up the company with debt, extract cash, and then “exit” via a profitable sale either to another company with deep pockets or to the public via an IPO.

When those two potential exits are blocked, the company is left to bleed out. And once the last drop of liquidity is gone, the company files for bankruptcy protection. This is the increasingly common third exit for PE firms from their LBOs."
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Old April 03, 2018, 09:03   #2
bubbagump
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Quote:
Originally Posted by Nihonto Chicken View Post
FWIW, link below to a perspective on the Remington bankruptcy filing. No personal assurance of validity of this view (web site is liberal, though often very good at exposing banking misdeeds).

https://www.nakedcapitalism.com/2018...ankruptcy.html

The money quote:

"What causes a company to file for bankruptcy protection isn’t declining sales or thin profits but debt (and sometimes other obligations) that it can no longer handle. A PE firm could invest equity in the company to pay down this debt burden, and it could invest equity to improve the company’s operations. But that’s a not its job. Its job is to load up the company with debt, extract cash, and then “exit” via a profitable sale either to another company with deep pockets or to the public via an IPO.

When those two potential exits are blocked, the company is left to bleed out. And once the last drop of liquidity is gone, the company files for bankruptcy protection. This is the increasingly common third exit for PE firms from their LBOs."
The very business model of Bain Capital. Toys R us, Guitar Center, they likely only missed Remington because cerberus got to 'em first.
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