You have mixed so many unrelated factors here.
It’s amazing how easy it is to ignore externalities once you put a little effort into it.
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I agree I am not a lawyer, but I had many working for me, both as employees and as retained counsel.
I’m not really sure I understood what you meant. You weren’t implying knowledge by osmosis, were you?
Welp, he was able to be knowledgeable by osmosis of an article he didn’t read, mind you… 
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I have to ask, while I don’t disagree with all what you’ve said, what country do you hail from that’s above all of this? And, how have you maintained and/or attained this position?
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Do you think bonds and dividends are the same thing? Bush hasn’t been in office for six years. If you have a problem with this deal, it isn’t Bush’s fault.
I read it until it was clear the author had no clue what he was talking about. I then read all the deal information that was put out by the company and the funds which were very clear and were issued under the threat of potential lawsuits. Also, I love the way you eliminated most of my comment and put two unrelated phrases together. Does that make you feel good about yourself? Or, do you feel a little embarrassed you were called out on it.
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So you did read the article partially. That’s a start.
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“If you give me six lines written by the hand of the most honest of men, I will find something in them which will hang him.”
And thus, the US Tax Code was born.
In other words, do you have constructive ideas on how to attack the problems within the USA and can perhaps cite examples from your home country?
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This is a pretty funny argument. An article detailing how far real world economics has come from the ideal is rebutted by someone who can’t be bothered to actually read what he’s arguing against because, you know, he’s a “CEO” with “lots of lawyers under him”, and so he invokes that same economic ideal (along with every cliche from Pretty Woman) to defend it.
Priceless.
Edit: And on a sidenote, Flyoverland, I’m confused. You talk about being a CEO in this thread and this one, both times using it as argument ender, as if no further discussion was needed or even appropriate in the face of your mighty CEOness. And yet in this thread you cite your former employer and your abject fear that you’ll be dumped from your health insurance:
We still get insurance from my former employer (we are in our 60’s but not eligible yet for Medicare). We live in abject fear that the company will dump us into the ObamaCare exchanges which will not allow her to get the care she needs. … We have a system of “haves” and “can’t gets.”
So which is it? Are you the uber successful CEO imbued with super powers that can end an argument with a single allusion to his CV, or are you struggling in a world where health insurance is only for the rich, and you’re liable to be dumped at any moment?
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I think you meant to respond to my post here not here. EDIT: But, anyway, I agree with you. The poster in question is questionable on multiple levels and I did enjoy your fun edit. 
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@Cowicide: not sure, was more a response to @flyoverland, the mighty CEO. And make sure to refresh the page to see the edit I just added, fun stuff.
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Oh come on. Any useful deal information is behind lock and key. What goes public is soppy PR rubbish, lawsuits or not. This is all bound up by watertight and dynamite NDAs.
Yes, this was a standard deal, debt to equity conversion; no, it appears there is no illegality per the statutes involved.
Too much hot air, not enough meat.
The very point of the article is that private equity is an ill wind blowing through the economy. I don’t agree with that 100%, but the sentiment that the lender barons are gaining control over large sections of the economy outside of the gaze of the public, I do; and that control is morally dubious, and definitely disadvantageous to current and future consumers.
It is in the interests of maximising IRR, the single metric the entire investment industry is idiotically wedded to, that businesses increase their penchant for cost reduction, anti-competitive behaviour, collusion, cartel price setting, predatory price undercutting, less than stellar refuse disposal - all of these, p/e owners will drive their business puppets to implement, right up to the edge of prosecution, and beyond, if paying lobbyists for successful policy change is IRR helpful.
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SEC: Majority of private equity firms overcharge investors
Nice bit of relevant morning news.
Bloomberg reported the SEC has found that over 200 of the 400 firms it investigated charged fees that could not be justified without notifying investors.
One of the challenges of investing in private equity is the opaqueness of the asset class and the broad discretion that is given to GPs [General Partners, who run the p/e firms], leaving it open to abuse.Last month, the SEC filed a civil case against Clean Energy Capital, accusing executives of misusing over $3m (€2.17m) of fee income to pay for a number of expenses including tuition costs and group photo sessions.
http://realdeals.eu.com/article/45975-sec-majority-of-private-equity-firms-overcharge-investors
So. Broadly - “we can’t tell our investors quite what we use their money for, because they’d kick us in the ass and drag us through the mud (but it was only $3m - c’mon - this is a big business!)”
History is littered with gluttonous wealth conglomerators who actually turn out in the historical view to have been beneficial to society and the overall economy.
Oh … wait … no it isn’t.
To be fair, that’s not necessarily a contradiction. @flyoverland could very well have taken a company public and retired at 50 as he says and afterwards have relied on his severance package with that company to provide health insurance – since he retired at 50 and is not eligible for Medicare.
That said, his argument in this thread has been mostly bluster and incredulity. Without specifying those details in the Garland piece with which he disagrees it’s pretty much impossible to say whether his position has any merit.
In addition, @flyoverland’s implicit claim that the convolutions of private equity could never, ever be used to rip anyone off or conceal morally gray or even illegal behavior is ridiculous. Without at least acknowledging that this sort of thing can and does happen it seems more like @flyoverland is throwing a temper tantrum because he identifies strongly with the concept of private equity in some emotional way and can’t stand that people would badmouth such a noble and august institution.
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I think there’s another way to look at it. Many of flyoverland’s arguments on topic were in fact presenting accurate information. However, one can look at facts through various tinted lenses and thus come to different conclusions: for example, the assumption that regulations (which in fact often don’t exist, or are rarely enforced) somehow magically ensure that all companies and executives within those companies are acting ethically and therefore we have no reason to worry.
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That is another way to look at it. However, some of @flyoverland’s arguments were demonstrably inaccurate, for example Guitar Center is a publicly traded company, not a private company. Some of it is opinion: @flyoverland doesn’t think Guitar Center’s corporate structure is more convoluted than it needs to be. However, to buttress this contention, @flyoverland simply said that it’s not reasonable to compare to Exxon. That needs elaboration, though…Exxon is much bigger with a great deal more capital so one might reasonably expect their corporate structure to be more complex than that of a musical instrument retailer (which requires no particular convolutions in corporate structure that I’m aware of). If this is not the case then @flyoverland needs to make some sort of case as to why for this rebuttal to be credible.
In addition, @flyoverland makes some strange unsupported assertions such as the notion that Ares’ debt conversion was “good for employees”. But, of course, this is probably untrue because Ares will more than likely try to cut payroll expenses as much as possible. That’s the correct move financially but it is in no way “good for employees” since higher-paid more knowledgeable retail staff will be let go and replaced with part time minimum wage uninsured folks.
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You make some good points.
Your last paragraph, I think, falls under my caveat of the tinted-glasses: I think flyoverland’s conclusion that debt conversion is good for employees stems from the assumption that business executives are ethical and wise and so of course any business decision they make that helps the company maintain or improve its share price (and executive salaries) is the right one for everyone in the company, no matter how it ultimately affects the employees.
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I’ve concluded @flyoverland is a post-MBA in a private equity firm, a decent sized firm, on the deal side, rather than a support function.
LOL! You’re probably right. From my viewpoint he (probably a he) sounds a lot like the white male executives I know who are close to retirement or who have already retired, and they all send each other links to Fox videos confirming that they are in the right and the younger generations are lazy and unethical for making any noise against the gods of U.S. capitalism.
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