“ In 2004, Wasserstein & Company bought the thriving mail-order fruit retailer Harry and David. The following year, Wasserstein and other investors took out more than a hundred million in dividends, paid for with borrowed money—covering their original investment plus a 23% profit—and charged Harry and David millions in “management fees.” Last year, Harry and David defaulted on its debt and dumped its pension obligations. In other words, Wasserstein failed to improve the company’s performance, failed to meet its obligations to creditors, screwed its workers, and still made a profit.
James Surowiecki, Private inequity
I deal with some of these issues in my job, but I had no idea private equity had gotten this predatory. A must read, but be prepared to be pissed.
Quote tagged as: finance james_surowiecki ows private_equity new_yorker
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