by jldavid47 » Thu May 12, 2011 9:45 pm
The fraud and larceny goes even deeper. Here's an example.
My wife started working for a company in the steel rack business in 2004. The company had been in business for close to 100 years and, at the time, was an American subsidiary of a larger Australian company. It was a good, steady and profitable (if unexciting) business. A couple of years later they were sold to a private equity firm. At the time I told my wife that she had better hope there isn't even the slightest downturn in their business because it would signal the end. Of course, the PE firm went through the usual drill: They drained the company of its cash and leveraged it up to its eyeballs. Sure enough, the economic downturn hit them in the 2nd half of 2008 and the company went from turning a profit to bankruptcy in less than 9 months! The creditors were screwed, the employees were screwed, but the PE guys pocketed millions in cash. None of them are in jail either.
The fraud and larceny goes even deeper. Here's an example.
My wife started working for a company in the steel rack business in 2004. The company had been in business for close to 100 years and, at the time, was an American subsidiary of a larger Australian company. It was a good, steady and profitable (if unexciting) business. A couple of years later they were sold to a private equity firm. At the time I told my wife that she had better hope there isn't even the slightest downturn in their business because it would signal the end. Of course, the PE firm went through the usual drill: They drained the company of its cash and leveraged it up to its eyeballs. Sure enough, the economic downturn hit them in the 2nd half of 2008 and the company went from turning a profit to bankruptcy in less than 9 months! The creditors were screwed, the employees were screwed, but the PE guys pocketed millions in cash. None of them are in jail either.