They've been doing the same thing to Hospitals for years...
Budget decisions that affect whether people will live or die are hindered by having to pay rent to the company that owns you and is also your landlord.
You owned the building before they showed up with all their money and fake promises.
Well this explains why a bunch of hospitals went bankurpt in MA recently. What a horrible way to make money.
Yup, the CEOs are trying to blame covid, but regarding NE Sinai in Stoughton:
The healthcare company blamed “skyrocketing expenses” related to labor, material costs due to inflation, and lingering effects of the COVID-19 pandemic on its decision to close the hospital. Steward also said that it owed about $50 million in unpaid rent.
A hedge fund bought Red Lobster.
Sold all of the ladder (so the hedge fund no longer owns the land).
The people the hedge fund sold the land to jacked the rents (because the hedge fund couldn't have, since they don't own the land).
And since the hedge fund still owns Red Lobster, they screwed themselves over.
Right? That's how this reads.
You might think bankruptcy screws the hedge fund, but it doesn't. Bankruptcy lets them drop a bunch of debts and obligations caused by sucking all of the money out of the rest of the changes, so they get stuff and don't have to pay for a big chunk of it before they eventually offload it to some other company.
The whole thing is vulture capitalism.
They've basically siphoned the businesses assets out into cash for themselves, a little bit at a time.
Owning Red Lobster might sound like a cool idea but imagine if you were a hedge fund and you could own the equivalent of the value of Red Lobster in the form of cold hard cash money.
(this hypothetical requires you to abandon all human empathy or long term ethics)
The hedge fund could have easily sold to a "separate" entity, legally, but still have been in cahoots or direct control to fuck the company for profit. I don't know any of the details here, but the same sort of thing happens all the time. Capitalism is full of white collar crime that is simply allowed to happen.
They sold the land to themselves
And so raised rents on themselves.
They're killing the company so they can feast on the carcass. I get it; it's not like it was a thriving chain with a lot of prospects for future growth. I just think the title of the article implied something different than what's really happening.
Ah, take out a loan, pay ourselves, declare bankruptcy, walk away. Classic.
Fuck the banks giving these voltures loans to pull this shit.
We all end up paying for this with fees and loan costs.
as long as it's anybody but them
Ah yes, a tale as old as when this country started fucking letting companies do that in the first place.
Alll the way to healthcare
Jesus. And chapter 11 protection means they erase debts, so this shit is free money but cheddar biscuits are sacrificed forever on this blood altar. I just want to talk to them.
I just want to talk to them.
But why do you need the golf club, xentoxis? What are you about to do?
Drive the point home
Actually, a Thai seafood producer bought Red Lobster and made it sell products like shrimp at a loss so it could move more product, allegedly. Patrick Boyle does a good dive into it: https://youtu.be/BEDFNcsC0JI
Both are true. The land sale did great short term benefit, terrible 5 year turnout as the fun dries up and they can't afford rent at a lot of locations as easily. Then the seafood producer put the squeeze on em.
I hate it when the fun dries up, but at least it lasted 5 years.
As soon as a hedge fund buys a company it's over. Run for the hills. I hope it doesn't happen to anyone.
Absolutely insane this is legal
If it's a legitimate hostile takeover, the market has ways of shutting things down. /s
Private equity firms and only planning a quarter out.
Original article if anyone wants to read it: https://www.axios.com/2024/05/20/red-lobster-bankruptcy-filed
Also we should post the source along with the picture more often.
No I heard it's endless shrimp that did it
Probably a gambit to remind people that Red Lobster exists and trying to pump the brand back up before offloading it or an attempt at a loss leader strategy hoping they would make up any loss on the shrimp in drinks and extras.
It could actually be both; the equity group bought it, sold the land to itself (a subsidiary), used rent to extract money from the business as it was going down. Then they sold the business to a Thai company that sourced their shrimp, with Red Lobster buying at a loss. Once the financials got too bad, they had Red Lobster file chapter 11 so its debts were written off, but the equity group & Thai company get to hold on to the money they got through the process. I can't verify this is exactly what happened, though, take what I'm saying with a grain of salt.
That is indeed a major chunk of it. The Thai group said they wouldn't change or fuck with suppliers, no worries. Then they said, nope, you have to buy all your shrimp from us. Then they said, let's have an endless shrimp promotion.
Private equity strikes again: https://youtu.be/z5PLEZiSZVw
So what you're saying is that millennials killed red lobster? /s
Red Lobster was canceled because of woke.
1:50,000,000 lobsters are split color gynandromorphs and the GOP doesn't like that something could be two sexes one bit so they cancelled Red Lobster.
What a shame. Red Lobster, while not a great restaurant, was a fun restaurant, and a good place to get affordable luxury seafood.
It still boggles my mind how lobster went from so bad you couldn't even serve it to prisoners to a luxury food item.
What the fuck is wrong with our species??
Someone needs to bail out these poor hedge funds 😭
Hedge funds are crazy and I am not smart enough to figure out the actual legality of them, however they seem like something that should be illegal.
Prune those damned hedges!
That's what happened to brick and mortar companies any time a hedge fund gets a hold of them, it happened to Sears, it happened to McDonald's, and it's happening to Red Lobster, because in their minds, why make good products that people want to buy when they can make more money by owning land instead?
"We (McDonald's) are not technically in the food business. We are in the real estate business. The only reason we sell fifteen-cent hamburgers is because they are the greatest producer of revenue, from which our tenants can pay us our rent." - Harry J. Sonneborn, former McDonald's CEO
