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NYT Story Spurs Commenter Rage Against “Legal Grand Theft” of Private Equity

Today’s NYT package story on THL Partners and its dividend recap of (soon to be) bankrupt Simmons Bedding Co. was destined to tap into a little populist anger. It’s manifested in the site’s comments section, with commenters calling buyout professionals thieves, colonizers, goons, mafia men and “rapists, pillagers and destroyers.” Some of the harshest reactions, along with some of the more rational defenses, are below.

“This story of legal grand theft by private equity has been waiting to be told”

“Rape, pillage, and destroy are the three words that come to mind on reading this story.”

“Most Americans today are no different than the Native Americans were 150 years ago-powerless and irrelevant. And those titans of equity are colonialists–except they’re colonializing their own country.”

“Organized crime often takes over a legitimate business and then uses its credit to buy items that it sells off the back of the truck without showing any income to the business until the business can no longer get credit and goes bankrupt. At that point there is often a mysterious fire and subsequent insurance proceeds. Not sure how this is different.”

“This is capitalism at its worst, and plainly indicates that business needs more regulation to do what’s morally right, since the PE people have proven themselves to be morally bankrupt while they bankrupt the rest of us.”

“To understand why our country is in such deep decline and why we have been experiencing such massive destruction of our wealth requires an appreciation of the immorality of the legalized thievery and wanton vandalism that is private equity.”

But private equity has its rational defenders:

“Sure, I don’t think the recapitalization/dividend scheme seems right, but why don’t we also place some of the blame on those early Simmons executives that surely got handsome rewards as well.”

“I love how the NY Times finds the one example where this doesn’t work out but ignores the thousands of examples of how PE firms running companies is working out just fine.”

“To be generous, I’d say that the article was written by somebody who does not grasp the nuances of finance. Articles like this seem to be fueling an anti-capitalist sentiment in this country.”

Read all the comments here.