09-01-2012, 04:48 PM
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Confirmed User
Industry Role:
Join Date: Feb 2004
Location: Tobacco Road
Posts: 1,568
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Quote:
The video King of Bain: When Mitt Romney Came to Town, claims that "Romney and Bain bought the 80-year-old company in 2000, loaded KB Toys with millions in debt, then used the money to repurchase Bain stock. The debt was too staggering. By 2004, 365 stores had closed." The clear implication is that Romney and Bain were responsible for the toy company's demise.
Bain Capital bought KB Toys in 2000, after Romney retired. He wouldn't have been involved in financial decisions, though he would have profited from them. The company did choose to take on debt, buy stock and pay investors a dividend, even as the toy store chain struggled to find its niche in a volatile industry.
But toy industry analysts agree that far more than debt drove KB Toys into bankruptcy court. It was a troubled company before Bain bought it, and Bain wasn't able to fix it. Did more debt hurt? Probably. But to blame Romney and Bain for the chain's downfall is to ignore critical facts that would give a different impression. We rate this claim Mostly False.
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http://www.politifact.com/truth-o-me...emise-kb-toys/ |
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