The Spark

the Voice of
The Communist League of Revolutionary Workers–Internationalist

“The emancipation of the working class will only be achieved by the working class itself.”
— Karl Marx

A Window into the Crooks’ World

Sep 8, 2008

The inside workings of those secretive “private equity” firms were pulled out into the open in two recent lawsuits.

Creditors of bankrupt Powermate Corp. sued its private-equity owners, Sun Capital and York Street. The suit accuses Sun and York Street of deliberately bankrupting Powermate by paying themselves large dividends while loading the company with impossible levels of debt.

Also, the bankrupt store chain, Mervyn’s, sued its former private-equity owners, Sun Capital and Cerberus Capital. The lawsuit describes how Sun and Cerberus took on massive debt to buy Mervyn’s from Target, then stripped off valuable real estate, paid themselves special dividends, took everything they could get–forcing the company to fold.

In their world this is what’s called “unlocking value.”

Call it by its right name: robbery.