new york has recently had arraylist see article about uh... being and at the
time that mit romney used to write and uh... it was pretty complicated in terms
of uh...
a double a lot of different companies have they might be money et-cetera
so i want a simple fight for you guys can break it down so that everybody can
understand it because oftentimes been capital
would make money
even their investors lost money or the companies that they had bought
went under
and that's confusing why are they make money when everybody else lost money
well let me show you
so far as i was talking about how bain capital used to make why they have many
many different ways let me show you won his feats i'll get into fees a little
bit more later
but basically we charge a fee for whatever they did including even buying
the company
the same way they made money is percentage of investors' money
so the best one common saving in in a pretty good track record of getting my
money back to their masters
so they say twenty two percent a year money whether we luv
or game
and now looked investors agreed to it so
being in charge it as long as a great so they made money in that way even if they
lose money to get at least two percent of the whole catch
and a percentage of profits i'm top of that
if we make money for you so for example if the above india limited dollars which
of course they wouldn't exist to small
over the sega simplicity
they take two dollars out of it right away and put in their pocket
and that have on the hundred and the remaining ninety eight dollars
they may ten percent
well then they would also get the percentage of those profits decoration
ten to twenty percent
and then
they would invest in the business themselves from time to time that's
actually a good fit
because i kiss you invested in whatever project you're doing so you have been
sent to make sure that it goes well
so it's not that
dividends this is a huge problem
this is where they take money out of a company because they put debt onto a
company on explain that a little bit more later
fees and dividends are your biggest problems and by the way also made up
money in a secret way
which is that when they took dead out of a company
and then they paid it back your loans then they wouldn't have to pay income
tax on so they also
took advantage of the tax code
to make a little bit of extra money
so let's talk about these a little bit more what kind of fees they charge for
the summer gets a little comical
you charge that feet to the company
four plying the company
because there was an controlling interest in term of the hell daylight
its lowest rate in their pocket
they would also force of a fee for managing the company
that if the if they invested more money in the company
they have a fee if they took more money out of the company they have a fee of p
bought smaller companies for the larger company
and finally they have a fee for selling the company
so now after dating and all those fees out
if investors made a couple of months of the company itself
uh... all sorts of product
great if they didn't
who cares
in fact let's show you a couple of examples right first lines of someone's
g_s_ industries
and a purchaser for eight point three million dollars that's why they're
called leveraged buyouts
put in a point three million dollars and then the
get a lot more loans on top to be able to buy the company from the original
owner
and the after they got all those loans
they pay themselves a dividend of thirty three point nine million dollars
in fact he can get a dead of a hug and twenty five million dollars
so he respect interesting part about demonstrate
because wasn't it done and twenty five million dollars
from the bank to put into the company
that was your company what you would do is you an investment company maybe you
buy plans to hire more workers
so that that company can make more money down the road
but oftentimes that's not what they did
being would take about thirty four million about
money and put it in their pocket
anne geyer demand money on this now the company goes bankrupt who cares
i put in a point three i mean thirty three point nine
for them it doesn't matter at all in fact what habitat yes industries
they went bankrupt
that everybody that work there they lost their jobs
so if you had a pension their sad day for you if that was your job sat there
for you
if you're an investor sad day for you but being makes money either way
and this scam is rediculous where they go to a bank is ok you'd give me money
for the company although it is really coming apart of my pocket
even a larger text cambridge industries birthday
now we're gonna break the setting the more so they declared bankruptcy in may
of two thousand and this is a company that being bought they manage
so they'll attaching a three hundred million dollars in debt so they've got
to be a mid deck got screwed
uh... they got fifteen point seven million dollars from outside investors
those investors screwed their laws all their money
even then put in money two point two million dollars
and so they lost that too
that all you saw was that a cease and they look sometimes this is off
sometimes they go down everybody lost
that's capitalism for
that's what i would say right
but that's not all
now let's take another uh... looked at a and other slider
so what happened at bankruptcy
well
here comes the fees
being collected two point two five million dollars
as a transaction fee for when they first bought the company
but we know you just saw that there ought original investment was two point
two million dollars
so how do you like that financial trickery
although why i'm investing discover your soup one two billion dollars
okay now my fee for addressing this company
two point two five million dollars
story or you have an incident brubeck in immediately don't care what i was in the
government
that there is more probably break but so more feats nine hundred fifty thousand
dollars a year in quarterly
at advisory fees
their in bankruptcy
they're not pain anybody they're still paying bain capital these advisory fees
but wait a minute
how good compared by serbian if you would bankrupt
and why are you paying the consultants who drove you into bankruptcy well
you've got all these creditors who are getting screwed
now here's one of my favorites
this be convinced the company
to do a restructuring of the debt
so that
they could get seventeen million dollars out
now in order to do that
they had to pay an early
withdrawal
prepayment penalty
of course debate
two billion dollars
so forget the seventeen million that's money that whether companies that
data paid two million dollars to pay tomorrow
now if you pay your debt late that's another fee
if you pay your debt early
that's a two million dollar fee
matter what you do d_p_p_ vp
by the end
being darted over ten million dollars
in five years
i remember their original mess of only two point two million dollars so they
made the transfer of it so what i'm on the company let's take a look
investors lost fifteen point seven million dollars become a gas shutdown
and employees lost all their jobs this is what they'd capital mit romney calls
sad day for you
is it a sad day for that
no let's take a look at that
they lost a two point two million investment
but they made ten million dollars in phoenix
so they had and dean of
seven point eight million dollars
well everybody else got screwed
all the employees all the investors everybody lost everything except somehow
magically in that failure of bankruptcy
baying hoon
was managing it probably be managing a brags about managing it
draw danzig
and may seven point eight million dollars doing
now baby lose money in all there
ip companies and oftentimes they made tremendous profits for their investors
and sometimes accompanies would go into bankruptcy in the lessons you make money
anyway
but no matter what happens
the company does well the company goes bankrupt
bain makes a tremendous amount of money disney rigged the system in their favor
if you think about voting for met running for president nine easy to keep
that in mind i allot of you might look at that go all that smart yellow credit
to him for
uh... having suckers investors company having this sucker banks giving a bit
the the loans that they want to put in their pockets and sarah
keep in mind who mit romney tears
because a lot of self
if you think that once he becomes president all the sudden he's not to
worry about his bottom line
and he's not gonna operate on exactly this way
and that if you lose your job who cares they've been trying to get back
that is contributors give 'em enough money to win the election to buy the
election okay that's what he cares about
is this
his supporters make mine does he make bank
that's what he cares about
usually can cite your bottom line
and remember this is the central thing the mit romney is running his campaign
on what a success he was at bain capital one
how he knows business
but the business he knows
isn't about creating jobs let alone here in america
it's about how to make money
while scoring everyone else so
that you think that's good
in our president there you go and will permit run
and maybe you think is an investor sometimes in my work out for you know
sometimes you might destroy anyone put money into being capital
that's a different ball game
the guy who was running our country things go in the u cares about this is a
lot of my no matter who else gets hurt
i don't think that's good for our country