Mitt Romney is running for President because of his business experience, which involved downsizing and some cases putting people out of work. Even though Mitt Romney left Bain in 1999, he still receives profits from Bain Capital’s deals as reported in his financial reports. He is also allowed to invest his money along former business partners. As of February 2009 according to the New York Times Romney enjoyed the profits of four global buy out funds and 18 other funds. He’s hardly what you call your average investor and turns out other people agree As reported in the New York Times Romney receive 2.1 to 16.5% in Bain’s firm share profits. Four of those major business deals include Toys R Us, Clear Channel communication, Hospital Corporation of America, and KKR are no under investigation.
“But behind the scenes, Mr. Romney had negotiated his retirement agreement. Although he would no longer be a partner, he would continue to be paid a part of the firm’s profits in buyout deals and other businesses, much as active partners were. The agreement would cover any new fund or venture started by his former partners until February 2009, although his stake would decline with each successive fund.
He and his wife also would be permitted to invest their own money in co-investment vehicles typically reserved for Bain executives.”
The flip side is Bain Capital is under investigation for breaking antitrust laws on those major deals that made a Romney a fortune. Two question I have is if Romney shared in the profits will he share in the responsibility that he may have to pay back money if Bain Capital is found guilty, and also during those transactions did Romney offer any advise. Kohlberg Kravis Roberts (KKR) was already under investigation for a four-year suit that involved 11 other companies from 2005 to 2007. In 2011, Massachussetts Federal District Court Judge Edward F. Harrington gave permission to to the plaintiffs into the investigation of some of the other businesses involved in those transactions, which so happen involves
Bain Capital. Besides KKR, already being under investigation, the transactions involving Toys R Us, Clear Channel, and Hospital Corporaton of America (HRC) are under investigation. One example cited by plaintiffs involved a $23.1 Billion acquisition lead by Bain and KKR which involved no competing bids. As reported in the New York Times there was an understanding “you don’t bid on my deal, I won’t bid on your.”
In 24-Jul-2006, Bloomberg wrote an article called “KKR, Bain Capital, Merrill Break LBO Record With HCA Takeover”, It mentions KKR as six of the 10 biggest-ever LBOs.
Previously in 2004 KKR, Bain Capital, and Vornado Realty Trust were involved in a $6.6 billion acquisition of Toys “R” Us, the toy retailer.
In 2005, Bain was one of seven private equity firms involved in the buyout of SunGard in a transaction valued at $11.3 billion. Bain’s partners in the acquisition were Silver Lake Partners, TPG Capital, Goldman Sachs Capital Partners, Kohlberg Kravis Roberts, Providence Equity Partners, and The Blackstone Group.
The Black Stone group in which Bain also partner in the deal over SunGard is also being inverstigated..