They’ve been doing the same thing to Hospitals for years…
Budget decisions that affect whether people will live or die are hindered by having to pay rent to the company that owns you and is also your landlord.
You owned the building before they showed up with all their money and fake promises.
Well this explains why a bunch of hospitals went bankurpt in MA recently. What a horrible way to make money.
Yup, the CEOs are trying to blame covid, but regarding NE Sinai in Stoughton:
The healthcare company blamed “skyrocketing expenses” related to labor, material costs due to inflation, and lingering effects of the COVID-19 pandemic on its decision to close the hospital. Steward also said that it owed about $50 million in unpaid rent.
What’s ridiculous, is that the hospitals can’t do a rent strike if the landlords also own the hospital.
A bunch of fucking sharks. (Insert unlimited shrimp joke here).
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A hedge fund bought Red Lobster.
Sold all of the ladder (so the hedge fund no longer owns the land).
The people the hedge fund sold the land to jacked the rents (because the hedge fund couldn’t have, since they don’t own the land).
And since the hedge fund still owns Red Lobster, they screwed themselves over.
Right? That’s how this reads.
You might think bankruptcy screws the hedge fund, but it doesn’t. Bankruptcy lets them drop a bunch of debts and obligations caused by sucking all of the money out of the rest of the changes, so they get stuff and don’t have to pay for a big chunk of it before they eventually offload it to some other company.
The whole thing is vulture capitalism.
This is it right here and this scenario was most likely the plan from the outset, they planned on this and orchestrated it.
Isn’t this exactly what happened to Toys R Us as well? Bought up by a hedge fund, saddled with millions of dollars of debt to funnel its value to the hedge fund, then bankrupted and sold off for a pittance, laundering all the profit and wiping the debt away like it was never there. All while putting tons of people out of work.
Aka rise of the planet of the apes
I, for one, welcome our new Dr Zaus overlords.
I love you, Dr Zaius!
Same thing happened (according to the original founders that sold the company) to Mervyn’s in the west coast.
It’s crazy how a corporate entity can own a company, sell off everything that makes it valuable, and then not pay a dime when said company inevitably goes bankrupt.
Welfare, bankruptcy, and avoiding legal obligations are all apparently fine for corporations, but not people.
Yet another reason corporations aren’t people. Unless you’re a fucking vulture like Romney (formerly of Bane [sic] Capital, who bankrupted Toys-R-Us).
They’ve basically siphoned the businesses assets out into cash for themselves, a little bit at a time.
Owning Red Lobster might sound like a cool idea but imagine if you were a hedge fund and you could own the equivalent of the value of Red Lobster in the form of cold hard cash money.
(this hypothetical requires you to abandon all human empathy or long term ethics)
The same thing Mitt Romney did for a living at Bain Capital. Buy a business, strip the assets, declare bankruptcy, profit. Vulture Capitalism.
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Not a little bit at a time. When they sold all land they would have paid out fat dividends and fees due to the huge profit windfall.
A little bit at a time in reference to the entire brand. It might seem like massive amounts, but it was part of it sold then and part of it sold now.
The hedge fund could have easily sold to a “separate” entity, legally, but still have been in cahoots or direct control to fuck the company for profit. I don’t know any of the details here, but the same sort of thing happens all the time. Capitalism is full of white collar crime that is simply allowed to happen.
They are allowed to sell the land to other entities controlled by the hedge fund or their cronies.
Then they’re raising the rent… on themselves.
Which is how they run the business for short term profit. This is confusing, but it’s a thing. It being confusing is half the point, because if all the average Joes out there understood how it all really worked, they’d demand reforms so fast your head would spin. It’s essentially a paper vehicle for transferring non fungible value into money in the bank, and then using chapter 11 protections to bilk the other creditors (sometimes including employees with bounced paychecks). They can then sell the Red Lobster business again (probably at what looks like a huge loss, which they can then write off their taxes, to offset profits from other entities they own). Then they can lease the land to the new business owners. Or they can restructure Red Lobster in some other way that allows them to keep squeezing profit out of it (converting to franchising, then finding suckers to buy the individual locations, for instance).
In this whole process, they’re probably raising food prices while lowering quality of both ingredients and service and deferring essential business expenses (like maintenance and equipment upgrades). Because the money is disappearing into rent and the business looks like it’s struggling.
Source: I used to be a business analyst for a VC company.
So, I’m curious: do you feel soiled?
I once worked for a company that I, in retrospect, wish I hadn’t. It wasn’t as bad as a VC firm (in my opinion), but it did leave me feeling… dirty. not so bad that I’ve committed my life to charity, but it certainly has changed and drastically limited the kinds of companies at which I’m willing to apply for jobs.
It was a long time ago and yes.
They actually hired me away from college. I was like 21, it was during the first .com boom. They offered me $76k a year, which seemed like so much money, plus commissions (I got a bounty essentially, if I found them a good opportunity). One of the partners had encountered me in another context and was like “I don’t need people with skills man, I need smart people who wanna learn.” At first I did it part time, for $30 an hour, 'cause I was going to school, but after a month they were like “We need you full time man, you’re gonna make so much money, you don’t need a degree.” They said I was gonna make 5 times my salary off commissions, but I didn’t even come close to that. Some guys I worked with there did, but I didn’t have the predatory instinct for it.
The worst part was the blatant misogyny. It was like some Wolf of Wallstreet shit. Me and the other analysts would be working and the partners would be looking at Russian mail order bride websites or talking about how the senior partner was “gonna hire a bunch of hookers and take 'em out on his speed boat.” No women worked there, and the partners would talk about how “Women’s brains are smaller, and we can’t hire them cause they take longer in the bathroom, so we miss opportunities.”
The next worse part was the enforced caffeination. This job ruined coffee for me to this day. First thing in the morning, the boss would stop by your desk and if you didn’t have a big cup of coffee from the cafe in the lobby, he’d just quietly set caffeine pills in a paper cup by your mouse. This would continue throughout the day… the message was “if you’re not heavily caffeinated during work hours, you’re not sharp enough and we’re gonna miss opportunities.” “Missing opportunities” was an unforgivable sin. There was even one time one of the partners told me he was “keeping my commission from one thing I’d done, to make up for this other opportunity that I’d missed.” I was too young and unconfident to stick up for myself. In retrospect, I think that was a test, and I failed.
Everything was a $$$ dick measuring contest. The partners had a whole pecking order of who was worth more and who was making more money. I’m not sure how they divided income amongst themselves, but there was a lot of “You keep what you kill” going on, but they also had a lot of joint venture entities too. Each partner had their own LLC, then there were two other LLCs, one of which was the entity my paychecks came from, but we ended up doing work on all kinds of stuff. They were into stocks, bonds, derivatives, tech startups, medical startups, real estate and they would create new entities all the time. Who my commissions came from depended on which entity was benefiting off whatever work I was doing.
I’ve been vague about what the work was, because the work was of different varieties, but it was all some variety of research. Like “Watch the financial news and see if there’s day trading opportunities?” or “Are there any new companies doing IPOs this week that we should invest in?” or “Read these 10 startup business plans and tell the partners which ONE they should look at more closely” or “Come with us to this party this medical device company we invested in pre IPO is throwing, to celebrate their IPO. Don’t drink, don’t do the cocaine, don’t bother the strippers (that’s what the partners are there to do), your job is to stay sober, talk to people and “find opportunities” for us.” or “Go to this startup pitch and see tell us if it’s a company you think we should look into.” or “Go out and check out some of these different start ups, take a look at their operations, meet their executives, tell us if you think WE should talk to their executives.” There was also “Here’s a new entity we’re thinking of setting up, to do X thing. Read through the plan and think about ways to isolate risk and maximize profit.”
I was there for about 14 months, and I did all of the above.
If you’ve seen “Enron: The smartest guys in the room.” you’re gonna have a good idea of the kind of culture I’m talking about.
In the end, I got let go because I “missed too many opportunities, so we can’t keep you aboard. You understand.” I think they could also tell I was really unhappy. I was NOT one of the golden boy analysts who went on to become junior partners. I never got rich. Now I do IT consulting and software development. I’m much happier.
In fact, this experience really turned me into much more of an angry socialist than I might have been otherwise. The fact that our society not only lets those guys get away with being who they are and doing what they do… but rewards them for it? Some of the BIGGEST rewards around? That’s a major failing of us as a culture and as a civilization.
Wow. I’m really sorry about that, but I’m glad things turned out better for you. Did you consider completing your degree?
I actually never got around to it.
Wow
The exact details are complicated but the general idea is simple. Three different things tend to happen in setups like this.
First, one company can own multiple shell companies, it can borrow in one of the shell companies and funnel that to one of the other shell companies, and walk away with money after declaring bankruptcy.
Second, a company can take out a large loan and then pay some of the bosses, promising to pay back the loan knowing that they never will.
Third, a company can use multiple shell companies to create just the right tax setup such that most of those companies don’t have any taxable income even though combined they definitely would.
They sold the land to themselves
And so raised rents on themselves.
They’re killing the company so they can feast on the carcass. I get it; it’s not like it was a thriving chain with a lot of prospects for future growth. I just think the title of the article implied something different than what’s really happening.
Ah, take out a loan, pay ourselves, declare bankruptcy, walk away. Classic.
Fuck the banks giving these voltures loans to pull this shit.
We all end up paying for this with fees and loan costs.
as long as it’s anybody but them
Ah yes, a tale as old as when this country started fucking letting companies do that in the first place.
Alll the way to healthcare
Jesus. And chapter 11 protection means they erase debts, so this shit is free money but cheddar biscuits are sacrificed forever on this blood altar. I just want to talk to them.
I just want to talk to them.
But why do you need the golf club, xentoxis? What are you about to do?
Drive the point home
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Actually, a Thai seafood producer bought Red Lobster and made it sell products like shrimp at a loss so it could move more product, allegedly. Patrick Boyle does a good dive into it: https://youtu.be/BEDFNcsC0JI
Both are true. The land sale did great short term benefit, terrible 5 year turnout as the fun dries up and they can’t afford rent at a lot of locations as easily. Then the seafood producer put the squeeze on em.
I hate it when the fun dries up, but at least it lasted 5 years.
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As soon as a hedge fund buys a company it’s over. Run for the hills. I hope it doesn’t happen to anyone.
Absolutely insane this is legal
If it’s a legitimate hostile takeover, the market has ways of shutting things down. /s
Private equity firms and only planning a quarter out.
Original article if anyone wants to read it: https://www.axios.com/2024/05/20/red-lobster-bankruptcy-filed
Also we should post the source along with the picture more often.
No I heard it’s endless shrimp that did it
Probably a gambit to remind people that Red Lobster exists and trying to pump the brand back up before offloading it or an attempt at a loss leader strategy hoping they would make up any loss on the shrimp in drinks and extras.
It could actually be both; the equity group bought it, sold the land to itself (a subsidiary), used rent to extract money from the business as it was going down. Then they sold the business to a Thai company that sourced their shrimp, with Red Lobster buying at a loss. Once the financials got too bad, they had Red Lobster file chapter 11 so its debts were written off, but the equity group & Thai company get to hold on to the money they got through the process. I can’t verify this is exactly what happened, though, take what I’m saying with a grain of salt.
That is indeed a major chunk of it. The Thai group said they wouldn’t change or fuck with suppliers, no worries. Then they said, nope, you have to buy all your shrimp from us. Then they said, let’s have an endless shrimp promotion.
So what you’re saying is that millennials killed red lobster? /s
Red Lobster was canceled because of woke.
1:50,000,000 lobsters are split color gynandromorphs and the GOP doesn’t like that something could be two sexes one bit so they cancelled Red Lobster.
Private equity strikes again: https://youtu.be/z5PLEZiSZVw
What a shame. Red Lobster, while not a great restaurant, was a fun restaurant, and a good place to get affordable luxury seafood.
It still boggles my mind how lobster went from so bad you couldn’t even serve it to prisoners to a luxury food item.
What the fuck is wrong with our species??
If you were served a slurry of rotting, partially cooked lobster and lobster shell, you would probably still think it’s gross.
Turns out it’s better boiled, broiled, and served with tons of butter.
Y’know that’s fair. I guess I didn’t really think about how it was served.
And with the way humans have been documented on they way they treat prisoners it shouldn’t be so shocking to me.
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Someone needs to bail out these poor hedge funds 😭
Hedge funds are crazy and I am not smart enough to figure out the actual legality of them, however they seem like something that should be illegal.
