Basically, the company had to pay for its own buyout when private equity firms KKL, Vornado, and Bain bought the company for $6.6 billion, mostly with loans.
Because the company then had to pay off those extreme loans, they were forced to sell off their assets and property, which they leased back from the very private equity firms that now owned them.
The same thing happened more recently with Red Lobster and JoAnn Fabrics.
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This is one of those situations where it once again shows that:
- Private equity stakes in companies are bullshit and at the very least need to be utterly regulated to hell and back.
- More specifically, it should not be allowed to buy a company “on debt”. If you want to buy somebody, you need cash-on-hand to do that. That’s the only allowed form.
Selling property to rent it back should also be super illegal. Is there ever a time this makes sense. If you want to sell land to profit, close the fucking place, there’s no way it’ll suddenly be more profitable while renting.
