Corporate destroyers are not heroes
Froma Harrop
Saturday, May 26, 2012
... even among those intent on making it big, people with a conscience will not cross certain lines. Bain blew across them. There seemed little it wouldn't do for a buck. That makes the prospect of a President Romney overseeing the laws that keep destructive "investing" practices legal and incredibly lucrative worrisome.
I don't see how buying a company, piling on $420 million of extra debt, immediately pulling tens of millions out of the business to pay off investors — all the while slashing the workers' pay — and then leaving the wounded patient to die in liquidation nine years later can be deemed honorable. This is what Bain did to American Pad & Paper as it turned a $5 million investment into a $100 million take.
Bain also stiffed Ampad's unsecured creditors, including a pension fund for some of its workers. These lenders got back two-tenths of a penny for every dollar Bain owed them.
Bain used a similar strategy at GS Technologies, a steel maker. There it parlayed an $8 million investment into $16 million. When the company went bankrupt, the federal Pension Benefits Guarantee Corp. had to spend $44 million bailing out its underfunded pension plan. And workers saw their pensions slashed by up to $400 a month ...
http://www.sunjournal.com/news/columns-analysis/2012/05/26/froma-harrop-corporate-destroyers-are-not-heroes/1200580
