Sen. Elizabeth Warren: How Private Equity Gutted Local Malls: Joann Fabrics, Red Lobster, Claire's, and More.

[marmar]

[UpInArms]

1. Sucked them dry and loaded them with debt

As long as this is allowed to happen, eventually there will be nowhere to go but the company store

[erronis]

4. And we know who will want his name on that company store.

Branding and a cut of every transaction.

[hlthe2b]

2. They are doing the same to independently owned medical, veterinary, and dental clinics...

Buying them up and you will have no options except to pay exorbitant prices that insurance will likely not cover fully or without a major deductible. And, even if professional staff (physicians, veterinarians, dentists) do not agree with the corporation's enforced diagnostic and treatment standard policies, they will have little choice except to quit.

[Permanut]

3. Vulture capitalism.

[WSHazel]

5. That video is just untrue

1) It is really hard to make money on a company that goes bankrupt. The PE firms actually lost money on Toys R Us as defined by not recovering all of the investment they made into the company.
2) If a big box toy store was such a good idea, they would be everywhere. It is fair to criticize Bain and KKR for investing in the deal in the first place, but they are not the reason the company went under.
3) What would be the incentive of any business owner to invest in their own business if the government outlawed pooled funds from buying or investing in a company?

While I generally agree with her, Senator Warren gets on my nerves with these attacks on PE firms. PE firms are a big net positive for the economy, and for employees. PE firms spread ownership much further down the org chart than family businesses, who generally share almost no ownership with employees. It is worth noting that Warren has never proposed an alternative owner for private businesses.

[erronis]

6. You have a very exceptional viewpoint.