Greed and Debt: The True Story of Mitt Romney and Bain Capital
 

Rolling Stone Greed and Debt: The True Story of Mitt Romney and Bain Capital

"'I'm not a Romney guy, because I'm not a Bain guy," says Lenny Patnode, in an Irish pub in the factory town of Pittsfield, Massachusetts. "But I'm not an Obama guy, either. Just so you know."

I feel bad even asking Patnode about Romney. Big and burly, with white hair and the thick forearms of a man who's stocked a shelf or two in his lifetime, he seems to belong to an era before things like leveraged debt even existed. For 38 years, Patnode worked for a company called KB Toys in Pittsfield. He was the longest-serving employee in the company's history, opening some of the firm's first mall stores, making some of its canniest product buys ("Tamagotchi pets," he says, beaming, "and Tech-Decks, too"), traveling all over the world to help build an empire that at its peak included 1,300 stores. "There were times when I worked seven days a week, 16 hours a day," he says. "I opened three stores in two months once."

Then in 2000, right before Romney gave up his ownership stake in Bain Capital, the firm targeted KB Toys. The debacle that followed serves as a prime example of the conflict between the old model of American business, built from the ground up with sweat and industry know-how, and the new globalist model, the Romney model, which uses leverage as a weapon of high-speed conquest.

In a typical private-equity fragging, Bain put up a mere $18 million to acquire KB Toys and got big banks to finance the remaining $302 million it needed. Less than a year and a half after the purchase, Bain decided to give itself a gift known as a "dividend recapitalization." The firm induced KB Toys to redeem $121 million in stock and take out more than $66 million in bank loans ? $83 million of which went directly into the pockets of Bain's owners and investors, including Romney. "The dividend recap is like borrowing someone else's credit card to take out a cash advance, and then leaving them to pay it off," says Heather Slavkin Corzo, who monitors private equity takeovers as the senior legal policy adviser for the AFL-CIO.

Bain ended up earning a return of at least 370 percent on the deal, while KB Toys fell into bankruptcy, saddled with millions in debt. KB's former parent company, Big Lots, alleged in bankruptcy court that Bain's "unjustified" return on the dividend recap was actually "900 percent in a mere 16 months." Patnode, by contrast, was fired in December 2008, after almost four decades on the job. Like other employees, he didn't get a single day's severance."

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They say that Romney wasn't in control of the company at that time in the article. why don't you read the whole thing? He started Bain and was the driving force behind what they became. He did many LBO's before he left and controlled the outcomes, most of which were just like this one.

Why don't you take the point, you are full of shit!

i am making sure that I vote this time around. This time I would like to make a difference. To matter in the future of our great cuntry. It matters man

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Sorry to get your panties in a bunch, however I didn't write the article, and you, obviously are too skeered to read the whole thing.

The website you linked to is only talking about that LBO which I quoted, not the many other LBO's in the article and they base it on a video that blamed Mitt AND Bain, and of course on quotes from Bain executives. This story is about both Mitt AND Bain, and no where does it mention Mitt being at Bain at the time of the KB toys fiasco, they expressly say he had already left.

Might wanna try some fiber in your diet. Maybe switch to decaff while you're at it.

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:smilie_we

ADG

Here's how the article closes:

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.

Seems to me Romney profited, and that's that.

This is what Bain Capital does (or did). They borrowed money to buy stressed companies, sell off what is profitable, attempt to restructure the rest, and collect a huge management fee. It doesn't matter to them if the company survives or not or who losses their job in the process. They make money no matter what.

Sounds like a smart business move for themselves, So it seems they are able to do what is needed in business, If getting rid of the US debt is his goal, Then judging from the past I'm confident Romney will succeed.

Yeah... great! Just like voting republican is a smart move for the very rich... to hell with anyone else who is not fortunate enough to earn the big bucks. :helpme

wow .... companies are people ...

basically, he's Gordon Gekko, except not as cool.

Yes.

For themselves it was indeed.


Judging from the past, the American middle class will thereby be leveraged and treated in precisely the same manner as every other entity that Bain has touched.

Romney is no more about improving the lot of the general public than he was about "helping" the businesses he took over.

Romney is a fucking prick and a liar. That being said I don't think the KB toys thing was entirely his fault or Bains, but Bain sucking all that money out of KB certainly didn't help.


Oh, and Romney said he retired from Bain in 1999. Either lied about this or he lied to the SEC because he was around after 1999.

http://www.salon.com/2012/07/02/when...ey_leave_bain/

Fucking Romney.

There's another definition for a 'globalist' like Romney - they are the super rich, they have no allegiance to any country, no real connections to their communities, their only allegiance is to more wealth.

Thanks much for linking to this story. Someone had mentioned it to me but I'd forgotten to check it out.

Mitt RobMe makes money the old fashioned way. Steals it. And then he hides the booty offshore like any savvy pirate. And there are Americans who think Mitt wants to HELP THEM? JFC.

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Exactly. Money is their drug. Think a junky cares how he gets more junk?

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Yup. Mitt radiates insincerity. He's a blatant snake oil salesman. He was born into the world a handsome millionaire and expanded his fortune not by producing, but by destroying. He's the living embodiment of the wrong path America has taken. He has never produced anything tangible - omly wealth for himself and Bain investors. He hides his tax returns from us because he knows it would give him away. And people would put this scumbag in charge?

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Great post. Thanks for that.

One thing is sure. No matter how much of a mess or success he makes of being President, should he get elected, he will leave office an EXTREMELY richer man.

"Mitt Romney isn't blue or red. He's an archipelago man. That's a big reason that voters have been slow to warm up to him. From LBJ to Bill Clinton to George W. Bush to Sarah Palin, Americans like their politicians to sound like they're from somewhere, to be human symbols of our love affair with small towns, the girl next door, the little pink houses of Mellencamp myth. Most of those mythical American towns grew up around factories ? think chocolate bars from Hershey, baseball bats from Louisville, cereals from Battle Creek. Deep down, what scares voters in both parties the most is the thought that these unique and vital places are vanishing or eroding ? overrun by immigrants or the forces of globalism or both, with giant Walmarts descending like spaceships to replace the corner grocer, the family barber and the local hardware store, and 1,000 cable channels replacing the school dance and the gossip at the local diner.

Obama ran on "change" in 2008, but Mitt Romney represents a far more real and seismic shift in the American landscape. Romney is the frontman and apostle of an economic revolution, in which transactions are manufactured instead of products, wealth is generated without accompanying prosperity, and Cayman Islands partnerships are lovingly erected and nurtured while American communities fall apart. The entire purpose of the business model that Romney helped pioneer is to move money into the archipelago from the places outside it, using massive amounts of taxpayer-subsidized debt to enrich a handful of billionaires. It's a vision of society that's crazy, vicious and almost unbelievably selfish, yet it's running for president, and it has a chance of winning. Perhaps that change is coming whether we like it or not. Perhaps Mitt Romney is the best man to manage the transition. But it seems a little early to vote for that kind of wholesale surrender."