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It seems middle America, including Independents, understand the story of lay-offs;

And it seems they also understand the story of Bain Capital too.  And most folks don't like the unhappy-endings from far-too-many of those tragic Bain tales ...


Obama's attacks on Romney's Bain Capital past may be paying off, new poll suggests  

by Jonathan Lemire, New York Daily News -- June 9, 2012

[...]
Nearly half of likely voters in 12 battleground states buy into the Obama team’s claims that private equity does not translate into new jobs, according to a new poll.

Forty-seven percent of those surveyed believe that the work done by firms like Bain hurts workers, as opposed to 38% who say it helps the economy, according to data released by Purple Strategies, a non-partisan research group.

The voters who seem the most skeptical that Romney’s time at Bain could help him restart the sluggish economy hail from some of November’s biggest prizes, including Ohio, Florida, Pennsylvania and Wisconsin.
[...]


Speaking of Romney bedtime stories ... have you heard the old Capitalist favorite of "When Bain met KB"?

Just gather round, as we turn that page ...


KB Toys had a bright future once, and then they met the Leverage Buyout experts from Bain.

By putting up $18 million of their investor's money, the CEOs at Bain gained direct access to $300 million of KB Toys' well-established assets

... to dispose of as the new Bain "Directors" saw fit.


INSIDE THE WORLD OF PRIVATE EQUITY

posted at scribd.com

[...]

The Bain Buyout of KB Toys

In December 2000, at the height of the busy Christmas shopping season, Bain Capital purchased KB Toys in a highly leveraged buyout worth $300 million. Bain invested only $18.1 million of its own money and financed the rest with bank loans and other assorted I.O.U.s.

The early 2000s were a tough time for toy retailers, and competition was fierce from bulk discount sellers like Wal-Mart and Target. Yet in April of 2002, KB Toys’ new owners implemented a dividend recap -- a second mortgage of sorts -- to pay Bain and several KB Toys executives a special dividend of $120 million.

KB Toys employees and creditors, on the other hand, were about to face some serious financial challenges. In January 2004, KB Toys filed for bankruptcy protection. The new year started off with announcements that at least 30 percent of stores would close and nearly a third of the workforce would lose their jobs. Employees, creditors, and the communities KB Toys served waited to learn where the cuts would take place. In the end, nearly 600 stores closed and 4,000 employees received pink slips. Big Lots, from whom Bain had purchased KB Toys, had to reveal to its shareholders that not only had it not received payment on the $45 million note, but that it was also left holding the bag on store leases that KB Toys defaulted on as it closed stores nationwide. As of the close of 2006, some landlords were still waiting for payment of old rents.

In an action to recover the note and other damages, Big Lots alleged that Bain Capital’s 2002 dividend recap led to the company’s bankruptcy, characterizing the practice as an “unjustified return on [their] investment in excess of … 900 percent in a mere 16 months.” Bain Capital and KB Toys executives cited the difficulty of competing with the discount stores as the cause of the company’s woes. The Delaware state court dismissed Big Lots case, finding that Big Lots was limited to bankruptcy proceedings to enforce this claim.

KB Toys emerged from bankruptcy in 2005 when a new owner -- another private equity
firm -- invested $20 million. For the 4,000 former KB Toys employees who lost their jobs, it was a harsh lesson in the game of private equity buyouts.


The Employees of KB Toys once upon a time, had a bright future too, and then they met the Pink-Slip experts from Bain.

Knowing how to rubber-stamp 1000's of Layoffs during Corporate take-overs, hardly seems to qualify one to claim that "They know how to create jobs" ... now does it?


How Bain Capital Could Sink Mitt Romney

by Kerri Shannon, Associate Editor, Money Morning -- Jan 10, 2012

[...]
Comments

by KatieAnnieOakley -- January 12, 2012

My husband worked in the corporate offices of KB Toy Stores in Pittsfield, Massachusetts. It was run very much like a family; everyone knew everyone else. It was generally a fun place to work

In 1999, KB was poised to be taken public or sold; it was owned at that time by Consolidated Stores. It was considered, in market-speak, to be a "Cash Cow". Consolidated notified KB Toy Stores employees it was going to offer either an IPO or direct sale in April 2000; employees, including us, were amassing cash to make it an employee-owned company. Instead, the IPO / sale ended up being "delayed…".

Late that year, the new CEO of KB Toy Stores, along with Bain Capital bought KB via an LBO (leveraged buyout). This means Bain borrowed against the assets of KB -- in order to purchase it! Then, less than two years later in 2002, the new KB Toy Stores "Directors" (most of whom were placed by Bain Capital) "authorized" an 83 million dollar "stock redemption" in order to "repay" Bain -- and another 34 million dollars to "bonus" themselves! The CEO of KB Toys alone got over 18 million!

Less than two years after that major drain of company assets, and now buried under massive debt, in January 2004 KB filed for Bankruptcy. Bain said it was because of "market competition from Walmart", etc. -- but that is not the case; KB Toy Stores were mall-based; K-mart and Toys R' Us had been in business and their competition for dozens of years. They didn't "compete" in the same markets as Walmart.

Bain crippled KB Toys to the point of having to declare another Bankruptcy, this second time a liquidation Bankruptcy -- and by early 2009, that was the end of KB Toys.
[...]


It seems middle America, including Independents, understand the story of lay-offs;

And it seems they also understand the story of Bain Capital too.  And most folks don't much like the unhappy-endings from far-too-many Bain Capital take-over tales ...


Because in Bain-land, NOT everyone lives happily ever after ...


Only the Kings of Bain-land hills, most days ... ever have anything to smile about, at the end of yet another sad Bain Capital tale.




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