Tuesday, October 8, 2019

Denka Executives Dishonor Cancer Victims

The Guardian reported:

Residents of Reserve, Louisiana aimed to present evidence to Denka that its plant’s toxic emissions are responsible for high rates of cancer in their town.

Lydia Gerard and Robert Taylor never came close to losing their composure, even when it became clear that that their 7,000-mile journey from the southern United States to Japan was about to come to nought.

Denied even the courtesy of a brief meeting – in a country fabled for its levels of civility – with representatives of a Japanese company they blame for spewing a toxic chemical into the air above their home town, they listened patiently as uniformed guards repeatedly told them to turn around and leave – immediately.
Denka executives dishonored their visitors from Cancer Town, USA, as they pursue medical ventures.

Denka's President prioritized private equity underwriting (PEU) over basic courtesy.

That's not sound social development.  It's the way of the word-twisting greed and leverage boys. 

Saturday, October 5, 2019

Soft Pedaling Deluxe Entertainment Bankruptcy

Forbes reported in 2005:

Through his main investment vehicle, MacAndrews & Forbes Holdings and its subsidiary DX III Holdings, Perelman has bought Deluxe Film, one of the world's largest replicators of film for the global movie industry, for some $745 million. 
Under MacAndrews and Forbes Deluxe's debt grew to almost $1.3 billion.  Moody's downgraded Deluxe's debt in August and estimated leverage to be around 12x.  

On October 3rd Deluxe entered Chapter 11 bankruptcy.  Deluxe's press release omitted the word bankruptcy altogether. 

All parties involved determined that the best way to implement the debt-for-equity exchange is through a controlled, efficient Court-supervised process, and today the Company took steps to start that process. "We have been working to put Deluxe in a strong financial position, and these steps are the best and most efficient way to finalize and implement the comprehensive financial restructuring,"
MacAndrews and Forbes did not include Deluxe's bankruptcy news on their website.

Frances Townsend is Executive Vice President, Worldwide Government, Legal and Business Affairs for MacAndrews and Forbes.  She omitted the hospital with the highest death toll after Hurricane Katrina.  Carlyle Group affiliate LifeCare Hospitals had 26 deaths after Katrina made landfall. 

Whitewashing remains alive and well and the PEU boys are particularly adept at it. 

Thursday, October 3, 2019

Politicians Red and Blue Cater to PEU

Bloomberg had two stories on federal laws that helped private equity underwriters (PEU).  The first dealt their latest massive lobbying push to preserve PEU preferred taxation, the billionaire tax break known as carried interest.

As Republicans set out to overhaul the federal tax code in 2017, the private equity world leveraged its influence. The mission: protect the wildly lucrative tax break that’s helped mint more billionaires than almost any other industry.

An industry that’s reshaped the American economy now appears to be heading into an even bigger war to preserve the generous tax breaks and loose oversight that helped it amass more than $4 trillion in assets and launch a new Gilded Age.
A different article on imploding unicorns mentioned:

....deregulation efforts in the investing industry in the 1990s, particularly the National Securities Markets Improvement Act of 1996. That law made it easier for startups to raise funds by reducing some disclosure requirements. It also increased the number of investors allowed in a fund before it was required to register under the Investment Company Act. The result, according to the authors, is that the spigots of private equity and venture capital were opened wide.

President Bill Clinton sold the government background check division to the PEU boys.  The Carlyle Group ended up owning the company twice.  USIS changed to Altegrity but ended up bankrupt, like many over-leveraged companies batted back and forth under various PEU ownership.

Clinton's team also brought deregulation through the repeal of Glass-Steagal.  This enabled financial shenanigans that put many retirees savings in jeopardy.  Guess who wants to help workers grow their retiree nest egss?  The same PEU boys that successfully got the Obama and Trump White Houses to ignore their campaign pledges to take away carried interest and tax PEU profits as income.  Their has to be a final bagholder and who better than America's elderly.

Politicians Red and Blue love PEU.   Clinton, Bush, Obama and Trump have all served the greed and leverage boys.  All have been and will be rewarded for a PEU job well done.  

Update 10-3-19:  Someone else figured out the PEU way:  "the billionaire class has already proven with its actions that it cannot exist without actively working to manipulate governments in a way that undeniably subverts democracy and the will of the people."  Another researcher noted the bipartisan Wall Street White House.

Wednesday, October 2, 2019

Carlyle to Shakedown Active Seniors?

The Carlyle Group sees dollar signs around America's aging population.  From California trailer parks to North Alabama medical office buildings, active senior housing to Atlanta luxury apartments Carlyle wants rent/lease money.

Senior Housing News reported:

Seasoned players in the active adult market — including private equity giant The Carlyle Group — say that it is a product where average lengths of stay are more than two times the average of independent living, and at profit margins that outperform senior housing. 
Active seniors would be wise to consider Carlyle's ownership of nursing home giant ManorCare.  It ended in bankruptcy after Carlyle bled ManorCare with management fees, dividends and asset sell offs. 

NY Post reported on ManorCare's demise:

The stumble could sully Carlyle’s reputation, it may escape the investment with a profit thanks to a dividend in the wake of the real estate sale-lease back deal, sources said.
Active seniors might wish to understand Carlyle's handling of tenants in a California trailer park.

The Real Deal reported last month:

Carlyle, one of the country’s largest private equity firms, made a splash in 2015 when it bought a manufactured home community in Silicon Valley for $152 million.

Tenants in the area soon complained of exorbitant rent hikes and a deterioration in management responsiveness — sparking new calls for statewide rent control in California. The D.C.-based investment group recently flipped the complex, selling it to Chicago-based Hometown America for $237.4 million this August, according to California property records.
How does one charge massively more in rent and reduce management responsiveness?  It's the private equity underwriter (PEU) way.  

Addendum:  PEUReport did many pieces on Carlyle-Manorcare over the years.