do and why that is damaging for communities. She mentioned them turning companies into spare parts and discarding what is not valuable, that is what happens at the end. What PE does first is load healthy companies up with debt by borrowing millions and even billions of dollars. The PE firms pay themselves fees for a variety of "services" that they provide for the now debt ridden companies, management fees, financing fees, advisory fees that can run into the many hundreds of millions of dollars, that money goes from the companies to the PE firms. To deal with paying out the fees, companies reduce expenses, inventory expenses, employee expenses, delay payments to vendors. If the companies are lucky, they somehow survive as a healthy entity and get sold off for big money, with the PE firm getting an enormous chunk of that. If they are unlucky they get sold off, carrying pieces of the debt with them to the buying company. If they are really unlucky, they land in bankruptcy court, where contracts and obligations can be voided, then they either close after struggling for years or they get sold off for what ever a buyer will pay for them.

I can understand why she doesn't go into the full detail about what PE companies do, but I wish she would say that they load companies up with debt and take out millions in fees right off the bat, then then continue to suck companies dry.

If I were to vote in a presidential
primary today, I would vote for: Joe Biden

Capt. America

(2,477 posts)

6. I love her. I'm currently 51% Buttigieg and 49% Warren.

Reply to BeyondGeography (Original post)

Fri Jul 19, 2019, 02:04 AM

Jul 2019

If I were to vote in a presidential
primary today, I would vote for: Undecided

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