Dirty Secret Behind Bain Capital Profits Under Mitt Romney 

I have the misfortune of working for a company acquired by Bain Capital in 2007.They overpaid for this food distribution company-£1.2billion(all borrowed!).Since then the customer service has declined,4 out of 10 new customers are lost,15 year old desktop computers!-running Windows 2003!,three different operating systems-a total lack of investment.Meanwhile at least £600 million has been taken out of the company servicing the debt incurred when Bain bought the company-money that should have been invested in IT systems etc.Plus a total collapse of employee morale-what Bain practice is in reality just another form of asset-stripping and carpet bagging-no entrepreneurial flair here-a disgrace!!!!!.Many employees reckon our company could be bust by mid-2015-under the weight of leveraged debt Thanks Mr Romney!!

I'm a vc employee and I've used this video to explain to my folks how the business works. You're fukin amazing at clarifying stuff for average folks, Mr cenk

So this is how all private equity firms work? Never a jot of real investment in a company’s success or failure, all gain and never loss? Amazing.

He didn't complain about the management fee. He specifically said "And then there's management fees, of course" because that's just natural.

If religion is a pursuit for truth and justice, TYT is my religion. You people have opend my eyes in so many ways. TY Turks

... what this country needs right now is a leader who understands how to turn things around for the better … a leader that doesn't just say nice words ... someone who has a track record of success ... with nothing to hide ... willing to show all his records ... who may not be perfect but we certainly don't have to guess at who he is or what his true intentions are.

I do not fault Romney for any of these transactions discussed in this video. What Bain Capital did was simple, they looked for failing companies, bought them, loaded them up with debt, brought them to bankruptcy and made money all along the way. Not only is this legal but it helps foster a competitive innovative economy. The key here is that the reason Bain invested: the companies were failing. In a capitalist system, failing firms must fail. People, I promise, it is not as bad as it seems.

Umm in not a republican. On the contrary, I am a democrat. The good news is that it looks better for Obama, who may not be the best but he's better than the alternative, and not good for Mitt Romney, who we dont want in office by all means.

Thank you TYT. This video needs to be seen by millions.

A fee for investing in a company? Surely, that's not investing, that's just giving their own money back to them....

So when Bain takes a loan out on behalf of the bought out company, why would anyone give a loan to them? People know Bain has a history of leaving bought out companies with all the debt, so why would anyone keep lending them money? Don't they see that "Bain Capital" is the owner of the company that is trying to take out a loan?

One problem here, Cenk. If you take out dividends in a company, the money will be split between the shareholders acccording to % of ownership. If Bain didn't have a stake in the company they can not recieve dividends. They can of course have some deals about fees on the dividends, but in general dividends are shared by the shareholders.

When Obama ran for Senate before he became president he walked in my towns July 4th parade, no one could take their eyes off of him. He is the most charismatic, and perhaps the most impressive, politician I have ever seen. That said, I don't agree with many of his economic and fiscal policies - but that's all.

Take note that Cenk is only covering a private equity strategy called leverage buyouts. There are many other methods that private equity firms utilize in order to profit that don't have nearly as many fees involved. For example, other strategies include venture capital, mezzanine capital, growth capital, and distressed investments. Point is that Cenk is covering a very small part of private equity.

Simple rule everybody when dealing with financial institutions: They don't lose money, They don't care who else loses but they do not lose money.

I don't understand why companies are being blamed. It is the government's job to make a system without loopholes. Greed is human nature.

I can see why people feel angry/bad for people that lose their job in a takeover, turnover or merger but there's nothing illegal about it … and thousands of Americans have laid off people in the past couple of years in their own self-interest of saving their companies … if we criticize Romney for doing this we are also criticizing the many Americans we know & love for doing the same thing to save their company … life is hard & we can't always guarantee job security …

It makes perfect sense what I said. He shipped plenty of those jobs overseas, not helping our economy and he pocketed millions selling the companies and laying off their workers. So you think that laying off workers and sending jobs overseas actually helps and Romney pocketing millions for himself? You want someone like that as President?

This is what happens when a society cares more about money over actual "value". You can easily have people that learn how to play the "game of money" while leaching value from the rest of society. Money was meant to be a tool to facilitate the exchange of value, not a means to an end.

...thats not the point of the video, 1) doctors don't take on a patient and injure them further to get more money out of them. 2) Banks don't charge people fees for foreclosing on their house. 3) Restaurants don't charge and additional fee for buying their food, or make you pay more if you sit too long or leave to early. 4) Attorney's don't stack the deck against their clients to draw out more time in court and thus more money. Your thinking is flawed and one dimensional.

I think people's problem with large companies is the fact that they participate in unfair business, not that they have money. Bain Capitol went around buying up companies, keeping some and destroying others. It wasn't because Bain was more useful to our society and the businesses it bought were useless, but because Bain had the money to do whatever the fuck they wanted. If you can buy a company, liquidate it, and make money, why wouldn't you? Problem is, now there are unemployed.

How about when he volunteered years of service to his church at his own cost? How about when he served as president of the 2002 winter Olympics and gave all his salary to charity? How about when he served as Massachusetts governor and did not accept a salary? How about when he donated his inheritance to a university? There you go. Now tell me of any other politician who has shown such an example of giving.

In the 90s Bain Capital made millions getting in on the cigarette market in Russia, at the time an "emerging" market. The country was so economically depressed that Mitt knew the underage cigarette smoking would skyrocket knowing merchants were too strapped to not sell to them to kids. Since then, lung cancer as spiked, and 35% of all underage kids in Moscow now smoke cigarettes. Romney's out for blood. you could see it in the way he moved his body around like a chained dog.

One thing i dont understand - If many of Bain Capitals business buyouts turned into bankruptcies, how did they get further clients? Surely no one would want to be managed by a company with such a bad track record...

A "bust out" is a common tactic in the organized crime world, wherein a business' assets and lines of credit are exploited and exhausted to the point of bankruptcy.

Bains MAIN GOAL was for these companies to go Bankrupt. It was their business plan. It was quick and an easy way to make money. They had no intention of actually "saving companies" and creating more jobs(their track record shows that), it was too much work and just easier to charge for taking over a failing business, take a loan out in their name, pocket some of the cash then sit back, do nothing and let the bank take without owing a penny of the balance.

The issue is the risk is removed from Bain by the profiteering Executive officers from Bain and the failed companies.

Also dismantling and selling does not mean the business is necessarily ineffective at generating profit. It's more profitable to dismantle and sell a company that many people want regardless of revenue generation.

No problem! Simple, if I was one of the people who lost my job, car, etc. I would be extremely upset. I should mention that I do feel badly for these people and that what happened to many of them was unfair. Keep in mind the reason Bain chose the companies they invested in - they were all economically failing. Please realize, giving money to already doomed companies is far more detrimental and unethical than taking them out of business. I would be happy to explain further if you would like.

To your points: 1) Obama was given the NDAA bill originally from congress without including american citizens, however, he asked congress to go back and include american citizens in the bill. He signed the bill on New Years Eve night to try to squeeze it by the media and therefore the people. Look for yourself if you don't believe me. 2) There are many instances. Yemen, Afghanistan. The military classifies people who are within distance of a suspected militant to be a "militant" or terrorist.

Given the arguments Republicans normally make about the poor, saying that they can be dismissed for reasons of personal responsibility and claiming that we shouldn't help them, it's not hard to see how Romney would treat *people.* His party is the party of capitalists, not people.

Leveraged buyout - A HOUSE MORTGAGE with a downpayment. There is NOTHING wrong with it. Fees - there is NOTHING wrong with fees, every single transaction requires work to be done and none of it is trivial, all of it requires plenty of complex steps, lawyers, accountants, plenty of rules from gov't, paperwork... If a bank gives a loan to Bain and Bain does NOT REPAY, so it loses the loan, who is paying? The actual problem is that GOVERNMENT is paying, because gov't secured the fucking loans.

"keep in mind who Romney cares about". Good luck to you finding a politician who doesn't care about himself.

There's a movie coming out in which Bain buys out a private security firm and tries to pull these financial shenanigans on it. However the bought out company gets wise of this and with some off-the-books deals with an espionage group sues the crap out of Bain saving the company. I think it is called "The Dark Knight Rises", the private security firm in the film is sometimes unofficially called the Dark Knight.

No no no, Bain would take the loan out under the companies name say "ABC Enterprises", not "Bain Capital", pocket a %, then under business forclosure/bankruptcy provisions Bain wasn't responsible for the extra money owed. The bank would simply take over the company and shut it down then sell the property then hit "ABC Enterprises" with a credit score. Bain did this DOZENS of times. It made them millions, thousands lost jobs and pensions and Bain got off scott free. It's not like Chapter 11

Since all of these things are voluntary, how come businesses were dumb enough to hire Bain Capital if it hadn't meant a net relief on their bankruptcy? The fact that Bain Capital is successful is proof that they must have done a good job. Do you think Bain would destroy their reputation by fucking up on purpose? Every time their client end up with a bigger debt or a smaller profit than they otherwise would, Bain Capital loses reputation.

I know why I'd vote for Obama-because he is the best choice. You vote for Paul will be a wasted vote. What is evil about Obama? getting Bin Laden? Getting our troops OUT of Iraq? Healthcare reform? A jobs bill? Wall Street reform? Maybe if more people of this nation supported the President (instead of calling him an "evil")-then we'd actually see more done.

Something I really don't understand about Cenk's first example. If they took out a loan of 125 mil from the bank to purchase the company for 8.3 mil, and gave themselves 33.9 mil from that laon, they still owe the bank 82.2 mil? What am I missing, isn't this an 82.2 mil loss for bain capital if the company went bankrupt, since they owned it?

When fox is wrong about things its funny, when TYT is wrong about things its rageworthy.

So, apparently, we're supposed to be more concerned with what Romney does with our money than what Obama does with ours.

2) People have been killed because they are in proximity in a militant. 3)/4) We are still there and are going to be there for many more years. 5) It doesn't matter if he didn't start using contractors, he continues using them. It's his decision. He's the commander in chief.

in Romney's defense: if Mitt doesn't care about Mitt, who will? It's a tough job, but somebody's gotta do it

Atheism is a belief system in the same way that sitting at home is a transportation system

Let me say this, if Willard was a very good business man, he would have at least a cool BILLION by now and not just 247 million. He's has had the money, the investment opportunities, the tax accountants, the write-offs, the loopholes, the friends in high places and the off-shore accounts to be worth FAR more in the last three decades. Not impressed.

No, you both have very interesting points. Let me help. 1) Many economists agree that shipping jobs overseas is not bad, in fact it often is healthy, for the American economy (especially if the jobs are low skill). Plenty is written on this matter should you be interested. I do not admire Mr. Romney as a politician but I certainly do admire him as a businessman - and you should too. Also, remember that Bain Capital, while it did destroy many jobs, created significantly more jobs.

The vast majority of Bain Capital's money came from restructing and investing into companies as they grow. Then selling them at a profit. Kind of like flipping a house. I'm sure they took home consulting fees too for that matter. Bain invested in failing companies and would try and restructure and flip them. Every party was a willing partner... The banks signed off, Bain signed off and the failling companies CEO signed off. Everybody involved were for these deals. Take of the tin foil hat

this reminds me of the controversy about high-yield bonds and leveraged buy outs of the 80s... but then it ended up with milken sentenced to 10 years, now romney is running for president!! we're really going backwards...

But what about the banks? If they are loaning money to Bain and then the company goes bankrupt, doesn't that mean the banks don't get their loan paid back? Why would the banks loan the money if they know there is a good chance they won't get paid back?

As I said: "the rejection of belief in the existence of deities" and "the position that there are no deities" are different from each other. The latter represents a belief. (The former not) As long as an atheist refrain from making any statements about the existence of deity, that's perfectly NOT a belief. However, once he starts to claim that there is no deity, he's making a claim that is not scientifically falsifiable (you cannot prove/disprove the existence of God) which makes it a belief.

The guy's first example is not right. Bain would still owe money back to the bank they originally borrowed form. So when he say's "it doesn't matter if they go bankrupt", he's just completely wrong. Bain DID NOT want these companies to go bankrupt b/c Bain would still owe the original $125 million back to the bank! This guy is neither a good journalist or an economist. He's a bitter bitter man.

How does this not have more views

That is just what Holding companies do. They have always done this. Though, there wasn't anybody really outsourcing jobs to 3rd world countries in massive proportions until Bain Capital pioneered the movement in the late 1990's.

Nonsense, the United States economy creates and destroys thousands if not millions of jobs every year - and has been doing so for decades. Generally, it is not intelligent to give money to failing companies (yes, there are exceptions). The large majority of Romney's investments increased efficiency and - some - perhaps even liquidity. Remember, short selling is legal and helpful. You have a very agreeable opinion but in many cases it undermines how our economy functions.

Like he said, if you like that kind of business practice fine. If you think Mitt is the man for having the balls to send businesses and workers home packing fine. But, the question is, do you want this kind of guy to be your next president? I sure don't!

They get bailed out because they have convinced people that their system is the best one, and most people don't have any idea of what a better system would be. When people don't have any other ideas they stick with what there is. Even if it means doing something they know is wrong, they do it because they don't have any alternatives they believe in.

So these companies got put under and forced to pay large amount of fees are just stupid? They don't think for themselves? If Bain is charging them these fees, they can go to someone else for money, why taking the money from Bain? These companies go under because they don't have a good business, and investors protect themselves by charging a fee or high interests. Bain or any investment companies make money with a successful investment, not putting them under.

I hadn't heard that. Do you have evidence & sources?

if you don't have greed, you don't have profit... am i wrong?

Every company would and should only look after their own company. The problem is the system right now that allows what Bain does.

Bain's strategy is highly reminiscent of Enron's, except they only do finance and don't create anything.

there's no risk for Bain, that causes capitalism to break down.

No, most of the debt incurred goes on the books of the company that was bought, not the management/holding company. Once in a while the bank will insist that the holding company guarantee the loan but since the loan is based on the assets and profit of the purchased company it's rare, especially if the holding company has a track record of doing these types of deals. I'll have to read the article, but my guess is the bank got their money back from Bain selling a lot of the assets.

Deceit is infinite and laws are limited.

Has anyone asked why the banks would loan the money in these instances? Why the tax code has those loopholes in it? Why the companies were so weak that they could not govern themselves? Why these companies' governance would sacrifice the shareholders, investors, and employees by selling to Bain? It seems that there is a long line of fiduciaries not doing their jobs very well long before and after Bain steps in.

It's what Bain did to a LOT of people (and similar to what Mitt's done to many voters in the GOP, including those who went Santorum, Grinch, and especially Paul) that has us so ticked off. Watch the video again and put the sound on.

the problem i see with voting for mitt romney is that he does not care about the ameircan people, he just wants his money

Neither of the parties should be trusted. It';s just that one party is the lesser of 2 evils.

I would say "nothing", but it's improper to bite the hand that feeds you.

Well, it depends. These deals can be structured in many ways without actually risking any of your own money. I worked for a firm that would restructure companies. For every 3 dollars saved they would take a dollar. Some companies went on to prosper, some went bankrupt. Either way, they made a ton of money. I don't know how these deals were structured but when a company is in trouble, they will reach out for any branch to keep them from drowning.

Bain owns some of the most AWESOME places by the balls: Guitar Center, Sports Authority, Staples, Dominos, Sealy (the best spring matresses out there), and some other decent/crappy corporations.

The entire point of running a business is to make a profit, it the most profits are made by dismantling a business and selling parts of it on the auction, then that is what must be done, it means the business is inefficient, somebody else is doing what it does better, because otherwise, if it was efficient and producing good profit, it would not be dismantled. It's not 'running it into ground', it's extracting the profit from business in the most efficient way that is available.

Cank talking with the TV = SUPER GOOFY Blitzerized version of Cenk xD

one of my favourite TYT clips!! thumbs up for Cenk for explaining a relatively complicated thing in laymen's terms...

I think a better analogy than "Mitt/Bain looking how to screw everyone over as long as he makes money" would be the casino: they don't care who wins and loses because the laws of large numbers plus the vigorish guarantees that they will make money.

excelllent video TYT

did they get sued? The fact that they could walk away with all that money while screwing everyone else doesn't sound right to me.

This sounds like taking out a second mortgage on someone else's house.

I don't care what your narrow bubble of perception sees some people as, Atheism is literally defined, every, to reject a belief system. That's the ABSENCE of belief. You don't even have an argument here, this is just the one and only meaning of the word.

true it is legal, but putting companies out of business or sending jobs over seas really is NOT good for the country is it.

Sources & evidence not names. Can you point to a website or a publication? Not having a go at you mate just never heard this before and I'm interested to see the figures.

They controlled it, but were not liable if it went bankrupt.

Also, Bain hasn't been very successful, you can see all their deals on their website. If Bain is making money in every deals, then a lot of more people will be going into this business.

If you haven't seen this video yet by TYT, watch it. He explains what is in the NDAA and why it shouldn't have been passed. It's a very good video. It's called "Obama Signs NDAA, ACLU Disgusted" on youtube. I can't posts links. They do a follow up video about a couple days after that called "NDAA & Obama: Defenders Are Wrong - Here's Why "

Economy that produces wealth, it produces products and services, and you are right, it's supposed to produce a surplus so that those who produce the wealth don't consume all of it, but can exchange it for products and services that other people produce - that's what trade is for, it's not for printing money and exchanging it for real goods. USA has 54 Billion USD per month trade deficit, had it for 20 years now, it's extremely unproductive and it lives on foreign charity. Gov't consumes

How is that legal? Screw the presidential run, they should bring criminal charges against him.

I meant, I was saying that atheism is also a "belief" (at least for most of them). yes, you may be an atheist because truth is more important for you than comforting yourself, but if you start preaching your atheism to others, it becomes a belief because in some sense you are trying to vindicate your conviction by trying to make others see the 'truth' like you.

Atheist is not a religion but it's still a belief system.

I have to admit, I didn't blame him much for his time at Bain before, but this DOES sound kind of like scam....He really does sound like a corporate raider. Sounds like a scary guy.

Bain Capital is to normal business as Destructive Excavation is to Creative Destruction.

wow, mitt romney running for president is causing harm to bain capital at the moment.

He didn't even mention Republicans......

Exactly. Rather than comforting yourself, the important thing is whether or not your beliefs are true. Pay attention, 'beliefs'? :-)

buying heavily indebted companies, then delaying filing of insolvency while profiting from what equity is left, is a criminal act, well at least in germany; in the u.s. the market is more 'free' it seems.

They have invested in over 350 companies generating over $100 billion dollars more per year in the economy. Of course SOME of the 350 companies will fall that is capitalism. But to slander the whole company because of a few mistakes is ridiculous. That is like saying Polo Ralph Lauren is the ugliest clothing brand in the whole world because of a few bad designs throughout the years.

Just to give an example, since you mentioned secular USA, you know most prominent founding fathers didn't believe any religion but they believe in a deity, right. That's why I'm saying that religions are totally separate issue than believing in the existence of a deity.

I have been trying to figure out what banks get out of this scheme because it seems like their loans wouldn't get paid back and so it would be horrible for them. I think I might have figured it out. If banks make a bad loan, they can just write it off on their taxes. So it might still hurt them a little bit, but they probably get much more money in other ways by working with companies like Bain.

I never called you a joke and I don't know what you're talking about "getting paid off". I wondered what your comment "I'm the one getting paid" was about. I think you're confusing this conversation with another. You came out of the box with what I initially thought was your favorable comparison of Bush to Obama, which is not your typical syndicalist line. It wasn't until your last reply that you revealed your politics.

Power point on an ugly wall, it's like I'm back in college.

Burden of proof lies with the claim maker. Saying "you can't disprove it" is not a valid argument, if you can't prove it.

You still prove my point. Profit over people. Mitt is not a great choice, a country is not a business the purpose of the people is not to line your wallet. Ever heard of business ethics? Mitts behavior may be wonderful in terms of the purpose of a business but in terms of ethics his behavior is appalling. Even if a country was supposed to be run like a business would you trust an unethical person to make sure you get paid and can feed your family?