By Aaron Kesel
Recently, the NY Post‘s Josh Kosman reported that “Romney’s Bain Capital has plunged 2 toy retailers into bankruptcy”; he apparently missed a few other Toy company bankruptcies from Bain’s history.
The first issue is Mitt Romney & Bain Capital entered into the toy industry by Mattel investors who endured a $4 billion loss, which was followed up by bankruptcy after bankruptcy of toy companies – with questionable ethics.
Earlier this year, our investigation revealed a big item missed by MSM (mainstream media), during the 2012 POTUS race, about the fact Goldman Sachs aided Romney, Bain Cap & Thomas Lee who got involved with The Learning Company; which was merged with Mattel – resulting in near instant catastrophic losses close to $4 billion.
This granted them excessive influence over the toy industry, as Bain Capital marched through bankruptcy case after case to finally get ownership of the big kahuna Toys “R” Us.
According to The Telegraph‘s Andrew Cave, The Learning Company merger with Mattel “was one of the worst corporate deals, of all time”.
The 3.6 billion acquisition of The Learning Company, an educational software firm, by Mattel took its place yesterday as one of the worst takeovers in recent history when the toymaker sold on the company for less than one-tenth of the purchase price.
Learning Company began losing money as soon as it was acquired and the resulting 59pc slump in Mattel’s shares has wiped out $3.1 billion of market capitalisation. Yesterday, Robert Eckert, Mattel’s new chief executive, announced 350 job losses, a $250m restructuring charge and a dividend cut from 9 cents a quarter to 5 cents a year with the aim of saving $200m a year.
Even The Telegraph missed the fact that Mitt Romney, Bain Capital & Thomas Lee Partners were involved. Reportedly, Romney’s contingency received a whopping 12 million shares of Mattel stock, as part of the merger.
Then Bain Capital acquired KB Toys, which was followed up by an even stranger deal of Bain/KB Toys acquiring another toy company eToys during the first bankruptcy of eToys.
A few years later, as reported by Rolling Stone‘s September 2012 cover story “Greed and Debt: The True Story About Mitt Romney and Bain Capital,” it was noted that the Boston Globe detailed Romney’s Stage Stores formation funded by Michael Milken’s junk bonds; and that a conflicted Judge Pollack presiding over Milken’s case allowed Romney to utilize the money despite the fact that the judge’s wife stood to make a profit from Stage Stores’ own dealings.
Furthermore, Rolling Stone pointed out that Kay Bee CEO (Michael Glazer) paid himself an $18 million back pay, whilst paying Bain Capital $83 million – prior to Kay Bee’s 2004 bankruptcy.
Among the issues of whether or not anyone else could haul out $100 million prior to filing bankruptcy – Rolling Stone missed reporting the fact that Michael Glazer was also simultaneously a Director at Romney’s Stage Stores during the bankruptcy. (As a matter of fact, since then, Michael Glazer has now become CEO of Stage Stores, Bloomberg reported.)
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Meanwhile, KB filed bankruptcy, again, in 2008; and eToys was also in its 3rd bankruptcy, as part of a separate item of “The Parent Company” insolvency case (in 2008).
The outrageous thing is, both Kay Bee & eToys wound back up, under Bain Capital – again; but this time as part of Toys R Us.
Now they are all in bankruptcy, once more.
Even stranger is the fact that those previous cases have questions about massive frauds being protected by willfully blind Federal Justice agencies and courts, which was pointed out by a whistleblower this reporter has come into contact with who has been fighting for justice. This whistleblower has been stonewalled by the DOJ and the media alike
Enigmatically, the same names of Romney’s associated parties continued to pop up in or around the previous cases of Romney’s Bain Capital – Goldman Sachs, Paul Traub, Barry Gold, Michael Glazer, MNAT law firm, Colm Connolly and Mitt’s Sankaty; which were sued by the whistleblower Laser Haas, for bankruptcy fraud as well as racketeering, shortly after Romney lost the 2012 Presidential election.
MoveOn.org also presented a case, to the System of Justice, concerning the fact Mitt Romney lied about when he left Bain Capital.
Congress is on the public, precedential, and docket record, acknowledging the fact that “Bankruptcy Rings” exist, where lawyers act to the direct detriment of their clients, as debtor and creditor.
It is significant that Congress chose to place the requirement of court approval for the employment of an attorney, accountant, or other professional by the creditors committee directly in the Bankruptcy Code in 1978. 11 U.S.C. Sec. 1103(a). The legislative history makes clear that the 1978 Code was designed to eliminate the abuses and detrimental practices that had been found to prevail. Among such practices was the cronyism of the “bankruptcy ring” and attorney control of bankruptcy cases. In fact, the House Report noted that “[i]n practice … the bankruptcy system operates more for the benefit of attorneys than for the benefit of creditors.” H.R. No. 595, 95th Cong., 2d Sess. 92, reprinted in 1978 U.S. Code Cong. & Ad. News 5787, 5963, 6053.
In those previous cases, the whistleblower cried foul about the Bain Capital roaming parties fleecing hundreds of millions and billions bankruptcy estates through veiled bribes labeled as bonuses.
Now the United States Trustee is also crying foul about the Toys “R” Us bankruptcy case, seeking to give tens of millions to Toys “R” Us executives, Business Insider reported.
So the questions are, how do the parties continue to get away with destroying companies, stiffing creditors, and retaliating against whistleblowers, but Bain Capital & Goldman Sachs keep all the gold?
Why does the DOJ continue granting Christmas gifts of millions upon millions dollars to Mitt Romney’s Bankruptcy Ring gangs, and, apparently, never-ending “get out of jail free” cards?
This is exactly why the phrase too big to fail and jail became popular and why the DOJ is now nicknamed after Jesse Eisinger’s book The Chickenshit Club; because they refuse to prosecute Wall Street. Eisinger documented a massive account of corporate greed and impunity and a revolving door within the Department Of Justice that protects itself from prosecution.
To reiterate some previous thoughts to criminal investigators, this journalist wonders if anybody remembers what we used to call it when organized individuals achieved unjust enrichment through means of deception and at the expense of other people and what used to be the consequence?
For now, I’ll let you ponder that thought as this is just the first of our Christmas series of financial misdeeds articles on Wall Street. Check back next week for another explosive story where you will learn more about Paul Traub and other cases of financial malfeasance on Wall Street.