Mar 16, 2020
A lot of people were surprised and shocked when the Art Van Furniture Store Company in Michigan announced it was closing its stores and declaring bankruptcy. Many people shop there. What happened?
In early 2017, a private equity company bought up Art Van using not their own money, but mostly money they borrowed from banks.
All this debt owed to the banks was put on Art Van. The private equity “vulture capitalists” sucked money and profits out of Art Van, and now they are selling off what they can and using bankruptcy laws to protect themselves.
The banks have first claim on what is owed to them. And the customers and Art Van employees are left holding the bag.
This is how capitalism functions these days. It happened to Payless Shoes, Sears, and many other companies.
It is a system that works only for the rich. Not for the rest of us.