Leveraged buyouts are not like mortgages
pluralistic.net
pluralistic.net
The author mentions red lobster but that wasn't PE that ran them into the ground it was a fishing company that bought them from PE.
They also seem to think PE only goes after public companies when that seems to be by far the exception.
This is just a poorly researched rage bait rant.
If you want something to complain about in PE look at tax treatments.
No, it wasn't PE that ran them into the ground. But PE didn't buy Red Lobster to even attempt to salvage the business. It was far more akin to "how much can we bleed out of this before it dies".
> Golden Gate Capital was Red Lobster's parent company after it was acquired from Darden Restaurants on July 28, 2014.[7] Seafood supplier Thai Union acquired a 25 percent stake in the company in 2016 for a reported $575 million, and in 2020 purchased the remaining portion from GGC.[8]
>In 2024, Red Lobster closed many of its restaurants[9] and then filed for Chapter 11 bankruptcy protection [...]
4 years is quite a bit of time before they actually went bankrupt, and that's not including the 4 extra years before that when they sold a 25% stake. Pinning the bankruptcy on the PE firm makes little sense here.
They're the fungi of the financial world and their role is to extract as much value as possible from the existing business.
Sure it's really annoying if you're a customer, but it's a godsend if you're a business owner looking to get out.
Who are these firms? Why would they be extending massive amounts of unsecured credit to those PE bought-out firms?