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WSHazel

(674 posts)

50. How does a PE firm make money on a bankruptcy?

Wed Feb 25, 2026, 06:18 PM

Wednesday

If a company goes bankrupt, odds are that the PE firm is going to lose all its investment.

There are maybe 10% of cases where the PE firm pulled out a dividend, but that doesn’t mean the PE firm made money, usually it just means it lost less.

PE firms make money when their investments increase in value, and the employees who own stock make money in those situations too.

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Kraft Heinz cut expenses too deeply under private equity management, its new CEO says [View all] BumRushDaShow Tuesday OP

That is not how private equity works WSHazel Tuesday #1

I have watched "private equity" groups Miguelito Loveless Tuesday #4

Yep, they buy the companies with loans under the companies names. Loans that pay the "Private Equity" owners. Then LiberalArkie Tuesday #8

one of the things i learned is the loans are often variable rate loans. uncle ray Tuesday #11

Exactly Miguelito Loveless Tuesday #25

The investment you described would lose money for pe firm WSHazel Tuesday #35

I have seen it happen many times Miguelito Loveless Tuesday #38

Companies are too expensive now WSHazel Tuesday #40

We get offers monthly, so Miguelito Loveless Tuesday #41

You probably are getting inbound calls from analysts WSHazel Tuesday #47

the "good" PE does is akin to an abusive husband buying his wife flowers. uncle ray Tuesday #7

"That is not how private equity works" BumRushDaShow Tuesday #9

That was a thorough documentation Farmer-Rick Tuesday #20

Wikipedia actually has some other examples that fell on the sword (or are in process of such) of PE firms BumRushDaShow Tuesday #27

Good info Farmer-Rick Tuesday #32

By this logic, no one should provide capital to troubled companies WSHazel Tuesday #36

It needs to be regulated BumRushDaShow Tuesday #42

And how does the current system help anyone? Farmer-Rick Wednesday #48

How does a PE firm make money on a bankruptcy? WSHazel Wednesday #50

Who would you rather have owning the hospitals? WSHazel Tuesday #37

NON-PROFITS BumRushDaShow Tuesday #45

Yes, yes, yes Farmer-Rick Wednesday #49

That is exactly how private equity firms work. Mr. Mustard 2023 Tuesday #13

The Private Equity Firms popsdenver Tuesday #21

Well they are fucking up the housing market for both renters and would be owners. LuvLoogie Tuesday #18

THEY are not the ones messing up the housing market WSHazel Tuesday #39

Yes, it is Cirsium Tuesday #24

OP was conflaiting Leveraged Buyouts with Venture Capital IbogaProject Tuesday #33

Have you taken a look at all the medical practices pef's have bought, niyad Tuesday #34

The term "buzz-word world" is so perfect to describe the madness in both private and the business world. walkingman Tuesday #2

Weird Al Yankovic wrote a song about it (one of my recent faves from him) BumRushDaShow Tuesday #10

I'm sending that to my spouse progressoid Tuesday #19

I have had to write up a many justifications for stuff BumRushDaShow Tuesday #28

She has to review progressoid Tuesday #30

Serious CSNY/Dylan vibes BaronChocula Tuesday #44

He excels at doing song parodies BumRushDaShow Tuesday #46

Any company that is bought by Miguelito Loveless Tuesday #3

I have, for some time, popsdenver Tuesday #22

In other news lonely bird Tuesday #5

Does that mean they're going to rehire all the employees in Pittsburgh that got laid off? FakeNoose Tuesday #6

Some quick googling showed the company started putting a lot of emphasis on AI a couple of highplainsdem Tuesday #12

It's ALWAYS private equity that fucks things up! sakabatou Tuesday #14

I had hot dogs and Mac & Cheese growing up. Jacson6 Tuesday #15

When someone says private equity, I think of Romney. Zackzzzz Tuesday #16

This is what private equity does xuplate Tuesday #17

"The whole end goal of "private equity" is to suck the life out of the companies they buy, discard what is left..." C Moon Tuesday #23

Yup, private equity is a virus. Initech Tuesday #31

So in order to save the company they need to increase costs bucolic_frolic Tuesday #26

The other problem in this case, that is unspoken BumRushDaShow Tuesday #29

Wait; you mean those private equity frat boys don't know how to run businesses? I'm shocked! Aristus Tuesday #43