OK, gotta ask. When Bain takes over a company and files bankruptcy...

[Frustratedlady]

who loses? Suppliers, right? Why aren't they screaming from the rooftops? Also, we are losing tax income from the payments they should have made to the suppliers, right, instead of pennies on the dollar? Also, how many times can a company file for bankruptcy?

When they abscond with the assets/cash and give it out as bonuses to the "gang" of Bain guys, why hasn't the court ordered them to give it back? Not that much different from embezzling, is it?

It sounds to me (and I'm not familiar with any of this) like Romney/Bain go into a company, move the money around until the situation is right for closing or moving the company, then give that money out as bonuses that eventually end up in foreign lands to avoid taxes. Do they do that when they ship that company offshore? Do we ever get any tax payments from their shenanigans or are they experts at maneuvering money to avoid taxes and steal from companies and pension plans either legally or illegally?

It just seems that somewhere in there, we are also getting screwed and are paying taxes to make up for their sleight of hand.

[Blue Meany]

1. Workers, companies they owe money to, banks that loaned them money, and US taxpayers

who have to pick up the tab to cover retirement expenses

[msongs]

2. no biggee, losses are all tax write offs - the system is totally gamed nt

[HopeHoops]

3. The only way to make it fair would be if BAIN had to file for bankruptcy. It doesn't work that way.

And it isn't necessarily a bad thing for the suppliers. They get a tax write off on bad debt and from what I've read, Bain worked with the suppliers to make sure they would get said write offs. It offsets profits and some companies rely on that. We've got a REALLY fucked up financial system.

[HeiressofBickworth]

4. Yes, payments made within a certain period are subject to drawback

however, Bain was not paid directly. As I understand the deal, Bain used the assets of a company as collateral on loans. They took the proceeds of the loans to pay themselves. When the company was unable to pay the loans, the lender seized the assets. So Bain was not paid directly by the bankrupt company and therefore wasn't subject to drawback. The loans, being collateralized, were paid out of the company assets. The only loser in the deal was the company. Workers were the biggest losers as their pension funds were part of the collateral seized by the lender.

If it wasn't such a fucked up plan to screw the little guy, one would have to stand in amazement at the mental gymnastics required to come up with such a convoluted plan -- and I'm probably not even describing the plan in its entirety. But be assured, Bain and the lender came out smelling like a rose. They were the ONLY ones to do so.

[japple]

5. Read Matt Taibbi's article in Rolling Stone. It covers most of what you're asking.

http://www.rollingstone.com/politics/news/greed-and-debt-the-true-story-of-mitt-romney-and-bain-capital-20120829

[meow2u3]

6. Bain's business model is organized crime

They ought to be brought up on RICO charges with the way they buy out and bust out businesses.

[lunatica]

7. Think of Bain as using the 'business' tactics of the mafia

Where they go into a perfectly good casino and skim the money off the top for themselves and then use bully tactics on the employees, then they go to the banks to get loans which they give to themselves rather than the business. Then when the business is ruined they just force the business to pay them for 'helping' them run the place and leave the business to face bankruptcy.

That's the 'business' practices of Bain. Only for them it's legal.

[nobunnyclue]

8. Fast exits, scapegoat managers

It's all about the art of the exit strategy.

Very rarely do these companies actually and up in bankruptcy on the PE watch. One notable exception being Chrysler - under Cerberus. They usually go bankrupt shortly after being resold, spun off, etc.

And there is someone from management, a REAL manager who has industry (not finance) credentials, perhaps a hired executive, who ends up taking the fall for the "bad management". The PE will set up a few of its people as officers, but the President is usually someone who the PE firm decides to keep on and elevate after the acquisition. This person will think they are being invited to play with the big boys, and often they make out with a nice piece of the upside, but the reputation risk is almost entirely on them personally in the downside.

[Frustratedlady]

9. Thank you to all who posted explanations. Sounds like a shell game, in part.

What's the chance of Obama and his crew changing these rules (WHEN he gets in for another term) so that the Bain-types can't pull these shenanigans in the future? I should think they have shown they are vultures and, legal or not, incapable to showing any mercy for companies they take over. Just think of all the families they've messed up. This shouldn't be allowed.

Sometimes, I think it's better if you don't know all of this stuff, but we can see what happens when you hide your head in the sand. I just hope it isn't too late to save our country from the 1-2% that would love to take over.