Yuri Beckelman at the AFL-CIO has a good example of how the Bain Capital bust-out scheme worked at the American Pad and Paper factory – just 25 minutes south of where Mitt Romney is having a campaign rally today in Irwin. Sounds like just the sort of business experience that would make Romney a cool President:
In August of 1992, Bain Capital acquired Ampad from the Mead Corporation for approximately $40 million, $35 million of which came from credit arranged by Congress Financial Corporation. Bain liquidated its investments in 1999, walking away with a golden parachute of over $102 million in profits. One year later, saddled with $182 million in debt, Ampad was forced to file for bankruptcy.
During bankruptcy proceedings it was revealed that Ampad owed 65 Pennsylvania businesses, like neighboring JK’s County Market of Mt. Pleasant, a total of $1.45 million. According to the Ampad trustee report, those businesses in Pennsylvania owed money by Ampadreceived less than $0.002 for every dollar owed.
The average amount owed was $22,458 with the average bankruptcy payment being $40.98.
· JK’s County Market of Mt. Pleasant was owed $10,750 but only received $20.35 from the settlement.
· Domestic Uniform of Philadelphia was owed $13,423 but only received $25.42 from the settlement.
· FL Smithe Machine Co of Duncanville was owed $121,470 but only received $229.99 from the settlement.
· Cavert Wire of Pittsburgh was owed $3,190 but only received $6.04 from the settlement.
· Alpha Omega Shelving of Carnegie was owed $2,397 but only received $4.54 from the settlement.