Investors count, working stiffs don’t: Saturday morning, on the front page, the New York Times reported in detail on the past workings of Bain Capital.
We were left with an unfortunate thought. At the New York Times, it almost seems that investors count, while working stiffs possibly don’t.
Here’s how the Times report started:
LUO AND CRESWELL (6/23/12): Cambridge Industries, an automotive plastics supplier whose losses had been building for three consecutive years, finally filed for bankruptcy in May 2000 under a mountain of debt that had ballooned to more than $300 million.Finally, the Times found something to worry about! Forget what happened to looted workers. In several instances, Bain’s investors got a bum deal!
Yet Bain Capital, the private equity firm that controlled the Michigan-based company, continued to religiously collect its $950,000-a-year “advisory fee” in quarterly installments, even to the very end, according to court documents.
In all, Bain garnered more than $10 million in fees from Cambridge over five years, including a $2.25 million payment just for buying the company, according to bankruptcy records and filings with the Securities and Exchange Commission. Meanwhile, Bain’s investors saw their $16 million investment in Cambridge wiped out.
Are we being unfair? That "Creswell" is the same Julie Creswell who hurried past the “underfunding” of the pension funds at GS Steel. Did working stiffs get their pensions looted?
In the lengthy report where she buried this matter, Creswell and/or her editors didn’t much seem to care (see THE DAILY HOWLER, 5/24/12). But suddenly, things seem different when it’s the investor class which finds itself getting tooken! In Saturday’s front-page report, Luo and Creswell went into much more detail about the way that class got treated by Bain at several points of call.
Here at THE HOWLER, we’d still like to know about those “underfunded” pensions at GS Steel. Reuters did a detailed though murky report on this matter in January. David Cay Johnston said there were other instances in the Bain record. (See THE DAILY HOWLER, 1/13/12.)
But to this day, the upper-class American press corps hasn’t bothered to explain what happened. How did Bain walk away with so much cash while workers’ pensions and health care got shorted? To this day, the New York Times doesn’t seem to care.
Is it just our imagination? It sometimes seems that topics get withheld, or stressed, depending on whose ox got gored. You can underfund pensions as much as you want.
Do not shortchange your investors!