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But Thomas H. Lee Partners of Boston has not only escaped unscathed, it has made a profit. The investment firm, which bought Simmons in 2003, has pocketed around $77 million in profit, even as the company’s fortunes have declined. THL collected hundreds of millions of dollars from the company in the form of special dividends. It also paid itself millions more in fees, first for buying the company, then for helping run it. Last year, the firm even gave itself a small raise.

Wall Street investment banks also cashed in. They collected millions for helping to arrange the takeovers and for selling the bonds that made those deals possible. All told, the various private equity owners have made around $750 million in profits from Simmons over the years.

It really makes you shake your head reading this.

Simmons was pillaged by owners who had no stake in running the company well.

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Wall Street's form of the redistribution of wealth perhaps?

It seems Wall Street has become simply an arm of government or at least emulates government in it's operations by just moving "money" around from place to place. Note it isn't wealth. It is just a paper currency - soon to be of little value if Voltaire is correct, and I have every confidence he is.

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  • 5 weeks later...

The beauty of the free market system Dobbin is that you can start your own private equity firm and do the same thing. It's all fair. The owners torched their own company.

Do you propose to force owners to run profitable businesses? Never take dividends? What?

What exactly do you propose to prevent people from running their businesses as they see fit?

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