when top brass kill a company by borrowing and then paying themselves big pay days.....is that a type of fraud? Thinking about how top brass killed the Twinkie......the top brass are of course not held accountable for loading up the company with debt by the shareholders or the SEC or any other agency.......will you miss the twinkie? I wont....but still they might at least apologize to the shareholders.....Dave
Lookie here what I found on the METAR board......ofw.....In fact, Wall Street hedge funds and private equity firms own Hostess brands, and they took massive bonuses and payouts over the past eight years or so. They dumped the company pensions, unilaterally stopped making pension payments that would have totaled $160 million, and plan to pay themselves with the sale of the liquidated assets of the company. Their current CEO’s main credential for the job is his “expertise in corporate liquidations,” according to the union (he’s also seen his pay triple).This is an object lesson in how management looks at labor relations these days. Workers are expected to take their lumps, and if they protest, management will just blow up the company. And the owners will still make a profit. This is Romneyism and Bainism writ large. AFL-CIO President Rich Trumka reacted today:What’s happening with Hostess Brands is a microcosm of what’s wrong with America, as Bain-style Wall Street vultures make themselves rich by making America poor. Crony capitalism and consistently poor management drove Hostess into the ground, but its workers are paying the price. These workers, who consistently make great products Americans love and have offered multiple concessions, want their company to succeed. They have bravely taken a stand against the corporate race-to-the-bottom. And now they and their communities are suffering the tragedy of a needless layoff. This is wrong. It has to stop. It’s wrecking America."http://news.firedoglake.com/2012/11/16/death-by-twinkie-what......This isn't about what you may think of Hostess snack products. This is about more than 18,000 workers losing their jobs because they were sold to hedge funds who wanted nothing more than to milk the company to justify their >20 % compensation.-fly
What is New Paradigm about Hostess?
Tahmas,that is the future paradigm.......killing companies so hedge funds can succeed.......honestly nothing.....I thought you had destroyed this board with Duma and I would join in.....my bad???Dave
We have been pleasantly on-topic since the election. I think this is a good thing.
Actually Tamhas I agree......and without Tink and Doomed....you might stay on topic....LOLDave
when top brass kill a company by borrowing and then paying themselves big pay days.....is that a type of fraud?Bah!! Humbug!! They put their money up to buy the company. They own it. They can do as they please.Who are the fools who loaned them the money to buy the company? Were the bonds properly rated? Or were they high risk junk bonds?As to the employees who lost their pensions, my sympathy, but they were working for a company that was on its last legs and they knew it. Why did they stay?The hedge fund investments let them keep their jobs longer. If the hedge fund/high risk investors had been unwilling to invest, the company would have been liquidated sooner. Would pension funds have gotten more money or not?The bankruptcy judge from before probably should have been more careful to protect pension funds. But if he rejected the hedge funds plan, people lost their jobs sooner. Which is the priority? Protecting pensions or keeping jobs.The hedge funds saw a way to keep the company alive in some form. They took a risk and for a while were rewarded for it. Nice bonuses in the good times are probably OK. But I suspect they have lost millions in the bankruptcy and I wonder if they will get big bonuses this year?Fridays WSJ had article about work rules. Truck drivers could not load their own trucks. Bread loaders could not load cakes. Extra man was needed to bring product out of the store room and put it on the store shelf.The company had been for sale for some time. There were no takers probably because work rules made the business uncompetitive.It will be interesting to see if buyers of the brands also buy the plants. Buying plants probably means union approval and high costs. So at minimum if they buy equipment, they will probably move it to the closest right to work state.
The workout specialist that the hedge fund brought in to try and negotiate a deal indicated on CNBC last Friday that the hedge fund had put in an additional 30M last December when there was little chance that they would get their money back. He said the teamsters had worked with management to try and keep all the jobs. He had praise for them. All workers and management were going to take haircuts. Guess the bakers union didn't believe Hostess would go under. They were wrong and both they and the 70% of the workers that agreed to concessions are all out of work. Work rules of the type you mention increase the rolls of union workers at the expense of efficiency. In Chicago our McCormick Place Convention Center's work rules resulted in losses of business to Florida and Nevada. The cost to dismantle exhibits was so high that many exhibitors just left the displays rather than dismantle them. You needed an union electrician to plug in an electrical plug. The cost of a can of Coke was $6 a can to bring in to the center. The state had to step in and change the rules and some of the business has been won back.Rob
Bah!! Humbug!! They put their money up to buy the company. They own it. They can do as they please.Paul,I am not talking about the employees being out jobs. I am talking about borrowing money from the bank before bankrupting the company.Dave
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