Typical Private Equity deal... The buyers take a massive loan in the name of the company they are buying then they use the sudden massive interest payments to explain the declining profits and the need to downsize. Then they find a way to squirrel out of the loans claiming the company sucked and let banks take remaining assets (or losses) and maybe resell the intellectual property to someone else right before that.

[–] [email protected] 6 points 1 month ago (2 children)

So you mean that banks are dumb and give away money for free and then just take the losses and repeat thr process?

[–] clutchtwopointzero 6 points 1 month ago* (last edited 1 month ago) (1 children)

Actually banks take collateral that is normally not what the private equity firms target and that actually seems to work, but the consequence is that hard assets of the firm (offices, buildings, hardware, cash, etc) are essentially given up

[–] starchylemming 15 points 1 month ago (1 children)

so think of your company as a horse

you sell it to someone for a nice price thinking the other one wants to ride the horse just like you did. but they are actually a butcher and make horse sausage out of it.

[–] qevlarr 3 points 1 month ago

Yes and it hurts.

[–] [email protected] 2 points 1 month ago

They're not dumb; this is the "moral hazard" we were warned of during the 2008 GFC.

[–] qevlarr 3 points 1 month ago

True, but we never expected that to happen with our company which was built on entirely different values. I am now committed never to let those vultures anywhere near a company I care about if I can help it, no matter their offer