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#21
posted to rec.boats
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Greedy Restructuring Asshole
On Tue, 04 Dec 2012 14:15:38 -0800, jps wrote:
On Tue, 04 Dec 2012 12:06:15 -0600, amdx wrote: On 12/3/2012 10:13 PM, jps wrote: On Mon, 03 Dec 2012 17:51:14 -0600, amdx wrote: On 12/3/2012 4:07 PM, jps wrote: Gregory Rayburn's monthly $125,000 pay -- or $1.5 million a year -- The company's shutdown will cause about 18,000 people to lose their jobs. 1.5 million divided by 18,000 equals 4 cents per hr. I don't think that's the problem! Mikek That's a sum total of 1 decision. How many hundreds of bad decisions have management made to get in this position? Hundreds. $2.5 billion in annual revenue but you can't figure out how to make a profit? High gross revenue does not make a business profitable. The simple truth, the business is worth more in parts to the current owners than the profit from business operations. Ahh, the business is worth more in parts to the current owners than the profit from business operations? The logical thing is to break up the parts. If you have a benevolent feeling with your money, Invest in the infrastruction a business needs, hire people, and payout all profits. You might wonder what those employees will do when the economy turns down and you don't have the same profits and then you must cut there pay. Oh, I forgot you don't paying them with your money. Mikek Mikek $2.5 billion in annual sales and you can't find a way to make it work? Baloney. Easy. Reduce the exorbitant cost of union labor and bennies. |
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#22
posted to rec.boats
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Greedy Restructuring Asshole
On Wed, 05 Dec 2012 02:10:35 -0800, jps wrote:
On Tue, 4 Dec 2012 18:41:32 -0500, "Eisboch" wrote: "jps" wrote in message . .. That's a sum total of 1 decision. How many hundreds of bad decisions have management made to get in this position? Hundreds. $2.5 billion in annual revenue but you can't figure out how to make a profit? The simple truth, the business is worth more in parts to the current owners than the profit from business operations. Don't blame the unions for not wanting to commit their people to poverty so owners can make enough. --------------------------------------- Sounds to me like management made the right decision if the goodwill of the company is worth more than profits .... especially if there aren't any. Your mileage may vary if you think that the sole purpose of a business is to provide jobs. The bonuses to management and salaries of the hired "turnaround" guy are peanuts when compared to the overall debt and are very commonplace in Chapter 7 situations like this. The bankruptcy judge approved them for reason. The simplistic views of bystanders are understandable but don't reflect reality. Except the "turnaround" guy is part of the vulture capital group. Just another way to suck the bones dry whilst they're screwing the employees out of their pensions and whatever else they can grab. Who's to say your idea that it's far more complex isn't just another view of a "bystander" who doesn't understand how awfully simple it all is? Sure as hell not you. |
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#24
posted to rec.boats
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Greedy Restructuring Asshole
In article ,
says... He was hired at that fee to restructure the company. So he earns the money. Hostess main problem was a very expensive distribution network. The drivers could not load a truck among other items of overhead. He's part of the vulture capital firm that took over. Not enough that these guys will reap large rewards for parting out a viable business (save for their stupid decisions), they need to take exorbitant fees too. Hey, it's so easy to start and run a business, why don't you do it. Oh, and get the union involved from the start, that way you will know all the union rules. And don't question a rule just cause it looks unproductive, it adds union jobs. Mikek http://tinyurl.com/brkkbgk |
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#25
posted to rec.boats
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Greedy Restructuring Asshole
On 12/4/12 5:18 PM, JustWait wrote:
You are right, the unions wanted to go along with it, it was the 3,000 greedy union "brothers" who ****ed the other 15,000 down the river.. Same way it happened at Finast, the top ten percent wage earners, **** the rest for a few more bucks... The unions had nothing to do with the demise of First National, aka Finast. The chain was the victim of bad management from the Pick-and-Pay Ohio group that took it over and then by the European group - Royal Ahold - that took it over in the late 1980's. The latter organization had all sorts of investigations going on, some of which resulted in heavy fines and jail sentences. Bad management...really bad management, and nothing to do with "union problems." |
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#26
posted to rec.boats
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Greedy Restructuring Asshole
In article ,
says... On Tue, 04 Dec 2012 14:15:38 -0800, jps wrote: On Tue, 04 Dec 2012 12:06:15 -0600, amdx wrote: On 12/3/2012 10:13 PM, jps wrote: On Mon, 03 Dec 2012 17:51:14 -0600, amdx wrote: On 12/3/2012 4:07 PM, jps wrote: Gregory Rayburn's monthly $125,000 pay -- or $1.5 million a year -- The company's shutdown will cause about 18,000 people to lose their jobs. 1.5 million divided by 18,000 equals 4 cents per hr. I don't think that's the problem! Mikek That's a sum total of 1 decision. How many hundreds of bad decisions have management made to get in this position? Hundreds. $2.5 billion in annual revenue but you can't figure out how to make a profit? High gross revenue does not make a business profitable. The simple truth, the business is worth more in parts to the current owners than the profit from business operations. Ahh, the business is worth more in parts to the current owners than the profit from business operations? The logical thing is to break up the parts. If you have a benevolent feeling with your money, Invest in the infrastruction a business needs, hire people, and payout all profits. You might wonder what those employees will do when the economy turns down and you don't have the same profits and then you must cut there pay. Oh, I forgot you don't paying them with your money. Mikek Mikek $2.5 billion in annual sales and you can't find a way to make it work? Baloney. Easy. Reduce the exorbitant cost of union labor and bennies. http://tinyurl.com/brkkbgk |
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#27
posted to rec.boats
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Greedy Restructuring Asshole (long)
On Wed, 5 Dec 2012 08:36:38 -0500, "Eisboch" wrote:
That's my story and I am sticking to it. === And a great story it is. Thanks. |
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#28
posted to rec.boats
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Greedy Restructuring Asshole (long)
On 12/5/2012 7:36 AM, Eisboch wrote:
"jps" wrote in message ... On Tue, 4 Dec 2012 18:41:32 -0500, "Eisboch" wrote: The bonuses to management and salaries of the hired "turnaround" guy are peanuts when compared to the overall debt and are very commonplace in Chapter 7 situations like this. The bankruptcy judge approved them for reason. The simplistic views of bystanders are understandable but don't reflect reality. Except the "turnaround" guy is part of the vulture capital group. Just another way to suck the bones dry whilst they're screwing the employees out of their pensions and whatever else they can grab. Who's to say your idea that it's far more complex isn't just another view of a "bystander" who doesn't understand how awfully simple it all is? ------------------------------------------------------- I am not an expert on the subject but I've had some direct experience. I was a principle (small, 5% stockholder and employee) in a company that had venture capital, bank and private (me included) financing. The company did ok for several years but started coming apart financially in 1986 due to Congress debating tax reforms for over a year. Orders for equipment were put on hold and some orders were cancelled because the customers (primarily large commercial and defense contractors) didn't know how the tax reform debate would affect their bottom lines. Very similar to what's going on today. I witnessed up front and personal as the venture capital group installed a turn around specialist in the company with all the best of intentions. I can tell you that they view the company strictly through financial eyes and not from any sense of loyalty to employees or consideration to their families. They have a hard core attitude that is at odds with the company's management who typically have some emotions involved and have no desire to lay people off. The turn around guy, along with management, has to determine which employees are absolutely necessary for jobs in progress and for company value for a potential sale or further investment. It's not a pleasant experience, but it is necessary. He was doing his job. It tore me apart. In the end, the bank called the note owed to them and the company went into involuntary bankruptcy. The primary principle, CEO and president knew it was coming and skipped town a few weeks before, "on vacation". He was seriously affected and in a state of acute depression. I happened to be second in command in the owner's absence and tried unsuccessfully to contact him when employee's paychecks started bouncing. I called the bank and learned that all the company's accounts were frozen. I then called the company's attorneys and was advised to immediately lay off *all* remaining employees which was not exactly a wonderful experience. Ultimately, the company was sold in an "arranged" auction by the bankruptcy court. That's is the *simplified* version of what happened in this example. Obviously, there were many more details and gut retching issues during this horrible experience. I left that company immediately after the sale and worked as a consultant to a major defense contractor to make ends meet. I was then 37 years old. There was a personal benefit derived from it however. A few years later, when I started my own company, I swore to never make the mistakes that I witnessed during this experience. I've mentioned the company from time to time here in the newsgroup but have never told the whole story. As a business owner, you may find it interesting, so here goes: In January of 1990, I incorporated the company. Like the one that went bankrupt in 1988, it designed and built high tech capital equipment for commercial and military applications. Initially the company consisted of me, my wife (receptionist and book keeper) and a friend from the previous company. We did all the engineering and design and subcontracted all the fabrication, machining and heavy construction. We did the control systems in-house and the final assembly and test. The only funding was my personal savings of approximately $25,000. We secured a couple of small contracts from people we knew from the previous company. I will always be grateful for their support and confidence that they exhibited at the time. Bigger contracts came along in short order. These are large dollar value items and they are typically paid on a "progress payment schedule" that consisted of several payments over the period of the contract, based on achievement of specified milestones. I managed the finances essentially by having the customers finance their own projects. I never had a bank line of credit or loan and I never borrowed any money from anyone. We added equipment when we could to do almost all the fabrication in-house, paid for out of profit, not loans. I also sought and brought into the company several highly qualified people in engineering, finance and manufacturing disiplines, giving them all a stock position as well as a salary. By the end of 1999, the company had grown to about 70 employees with revenues of about $17M annually. It came up on the radar screen of some bigger companies and two of them ended up making formal offers to acquire it in late 2000. At the time the physical assets of the company (meaning manufacturing equipment, engineering equipment, test equipment, etc.) probably totaled about $500K in value. The rest of the value of the company was in intellectual property and goodwill. One of the two companies offered a deal whereby the stockholders in my company would receive stock in the their company. My company would become a division of theirs, building equipment only for them. The other company offered cash. They wanted to expand the company with further investments and market our equipment to the industry in general. Now, I may be uneducated in the ways of business and finance, but I am not a complete idiot. The company had grown to a point where it needed the expertise and resources of a larger organization for continued growth. At this point I still owned 67% of the company and it was getting more complicated to run. I knew my limits. So, the company was acquired for a little over $21 million in cash. The due diligence lasted only about 3 months before closing and every day that I got up I couldn't believe it was all really happening. We had no debt, no bank loans and no venture capitalists to pay off. The proceeds went to the stockholders. At the time of closing, and after all the adjustments were made for work in progress, etc., the company had $1.5M in the bank, which we would retain. A week before the closing, I called a meeting of all the stockholders and proposed an employee bonus plan, using this money. It was unanimously agreed to. The day after the closing, I called a meeting of all the employees. My wife had made out checks to everyone. It basically came down to $1,000 for every month or part of a month that the employee had worked for the company. Several had been with the company for 10 years. The average was about 6 years. Some received over $120,000. A couple had just joined the company, but still received at least $1,000. That day was one of the most satisfying day of my life. Several people received enough money to pay off their home mortgages. Others now had the money to buy their first house. It was funny as hell to watch the reaction when I announced the bonus formula. You could see people mentally adding up the number of months they had been employed as I explained how it would work. Meanwhile, my wife was walking around handing out envelopes with the checks in them to all the employees. Great day. As for me, part of the acquisition deal included a three year "consulting" agreement and non-compete clause. They didn't have to worry. To this day I have no regrets and absolutely no interest in getting involved in that industry again. The only reason I started the goofy guitar shop thing is because I was starting to drive my poor wife nuts, not having anything of importance to do. She's the one who, after looking at my modest collection of guitars, amplifiers and Hammond B3 organ, suggested I open a "music shop". I thought that would interesting and have been involved with it for the past 3 and a half years. I realized however that I was never designed or cut out to deal in a retail world, so I have turned the shop over to a friend who is both a musician and a luthier. I stay involved, more as a hobby and place to go, but he now owns and runs the place. It too is growing and will be moving to a larger facility early next year. That's my story and I am sticking to it. I'm available for adoption. :-) Mikek |
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#29
posted to rec.boats
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Greedy Restructuring Asshole (long)
On Wed, 5 Dec 2012 08:36:38 -0500, "Eisboch" wrote:
"jps" wrote in message .. . On Tue, 4 Dec 2012 18:41:32 -0500, "Eisboch" wrote: The bonuses to management and salaries of the hired "turnaround" guy are peanuts when compared to the overall debt and are very commonplace in Chapter 7 situations like this. The bankruptcy judge approved them for reason. The simplistic views of bystanders are understandable but don't reflect reality. Except the "turnaround" guy is part of the vulture capital group. Just another way to suck the bones dry whilst they're screwing the employees out of their pensions and whatever else they can grab. Who's to say your idea that it's far more complex isn't just another view of a "bystander" who doesn't understand how awfully simple it all is? ------------------------------------------------------- I am not an expert on the subject but I've had some direct experience. I was a principle (small, 5% stockholder and employee) in a company that had venture capital, bank and private (me included) financing. The company did ok for several years but started coming apart financially in 1986 due to Congress debating tax reforms for over a year. Orders for equipment were put on hold and some orders were cancelled because the customers (primarily large commercial and defense contractors) didn't know how the tax reform debate would affect their bottom lines. Very similar to what's going on today. I witnessed up front and personal as the venture capital group installed a turn around specialist in the company with all the best of intentions. I can tell you that they view the company strictly through financial eyes and not from any sense of loyalty to employees or consideration to their families. They have a hard core attitude that is at odds with the company's management who typically have some emotions involved and have no desire to lay people off. The turn around guy, along with management, has to determine which employees are absolutely necessary for jobs in progress and for company value for a potential sale or further investment. It's not a pleasant experience, but it is necessary. He was doing his job. It tore me apart. In the end, the bank called the note owed to them and the company went into involuntary bankruptcy. The primary principle, CEO and president knew it was coming and skipped town a few weeks before, "on vacation". He was seriously affected and in a state of acute depression. I happened to be second in command in the owner's absence and tried unsuccessfully to contact him when employee's paychecks started bouncing. I called the bank and learned that all the company's accounts were frozen. I then called the company's attorneys and was advised to immediately lay off *all* remaining employees which was not exactly a wonderful experience. Ultimately, the company was sold in an "arranged" auction by the bankruptcy court. That's is the *simplified* version of what happened in this example. Obviously, there were many more details and gut retching issues during this horrible experience. I left that company immediately after the sale and worked as a consultant to a major defense contractor to make ends meet. I was then 37 years old. There was a personal benefit derived from it however. A few years later, when I started my own company, I swore to never make the mistakes that I witnessed during this experience. I've mentioned the company from time to time here in the newsgroup but have never told the whole story. As a business owner, you may find it interesting, so here goes: In January of 1990, I incorporated the company. Like the one that went bankrupt in 1988, it designed and built high tech capital equipment for commercial and military applications. Initially the company consisted of me, my wife (receptionist and book keeper) and a friend from the previous company. We did all the engineering and design and subcontracted all the fabrication, machining and heavy construction. We did the control systems in-house and the final assembly and test. The only funding was my personal savings of approximately $25,000. We secured a couple of small contracts from people we knew from the previous company. I will always be grateful for their support and confidence that they exhibited at the time. Bigger contracts came along in short order. These are large dollar value items and they are typically paid on a "progress payment schedule" that consisted of several payments over the period of the contract, based on achievement of specified milestones. I managed the finances essentially by having the customers finance their own projects. I never had a bank line of credit or loan and I never borrowed any money from anyone. We added equipment when we could to do almost all the fabrication in-house, paid for out of profit, not loans. I also sought and brought into the company several highly qualified people in engineering, finance and manufacturing disiplines, giving them all a stock position as well as a salary. By the end of 1999, the company had grown to about 70 employees with revenues of about $17M annually. It came up on the radar screen of some bigger companies and two of them ended up making formal offers to acquire it in late 2000. At the time the physical assets of the company (meaning manufacturing equipment, engineering equipment, test equipment, etc.) probably totaled about $500K in value. The rest of the value of the company was in intellectual property and goodwill. One of the two companies offered a deal whereby the stockholders in my company would receive stock in the their company. My company would become a division of theirs, building equipment only for them. The other company offered cash. They wanted to expand the company with further investments and market our equipment to the industry in general. Now, I may be uneducated in the ways of business and finance, but I am not a complete idiot. The company had grown to a point where it needed the expertise and resources of a larger organization for continued growth. At this point I still owned 67% of the company and it was getting more complicated to run. I knew my limits. So, the company was acquired for a little over $21 million in cash. The due diligence lasted only about 3 months before closing and every day that I got up I couldn't believe it was all really happening. We had no debt, no bank loans and no venture capitalists to pay off. The proceeds went to the stockholders. At the time of closing, and after all the adjustments were made for work in progress, etc., the company had $1.5M in the bank, which we would retain. A week before the closing, I called a meeting of all the stockholders and proposed an employee bonus plan, using this money. It was unanimously agreed to. The day after the closing, I called a meeting of all the employees. My wife had made out checks to everyone. It basically came down to $1,000 for every month or part of a month that the employee had worked for the company. Several had been with the company for 10 years. The average was about 6 years. Some received over $120,000. A couple had just joined the company, but still received at least $1,000. That day was one of the most satisfying day of my life. Several people received enough money to pay off their home mortgages. Others now had the money to buy their first house. It was funny as hell to watch the reaction when I announced the bonus formula. You could see people mentally adding up the number of months they had been employed as I explained how it would work. Meanwhile, my wife was walking around handing out envelopes with the checks in them to all the employees. Great day. As for me, part of the acquisition deal included a three year "consulting" agreement and non-compete clause. They didn't have to worry. To this day I have no regrets and absolutely no interest in getting involved in that industry again. The only reason I started the goofy guitar shop thing is because I was starting to drive my poor wife nuts, not having anything of importance to do. She's the one who, after looking at my modest collection of guitars, amplifiers and Hammond B3 organ, suggested I open a "music shop". I thought that would interesting and have been involved with it for the past 3 and a half years. I realized however that I was never designed or cut out to deal in a retail world, so I have turned the shop over to a friend who is both a musician and a luthier. I stay involved, more as a hobby and place to go, but he now owns and runs the place. It too is growing and will be moving to a larger facility early next year. That's my story and I am sticking to it. We see the world in a very similar way. I've built my company in the same fashion but the dollar value of our product isn't as high, as we're in corporate instead of defense. No loans, very little money invested outside of the prinicipals, all profits plunged back into R&D. I hope to experience a similar day to yours, before I keel over or move into an old folks home. Love reading your story, thanks for sharing. One difference I'll point out between venture vs. vulture. Venture capitalists are more interested in making successes of their bets, vultures don't care where the profits come from, even if it's the company pension plan or burying the company in debt, the cash from which is paid out to the vulture capital firm. |
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#30
posted to rec.boats
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Greedy Restructuring Asshole (long)
On Wed, 5 Dec 2012 09:13:01 -0500, "Eisboch" wrote:
"Eisboch" wrote in message news 
That's my story and I am sticking to it. jps: BTW ... in case you are wondering ... yes, I paid somewhere around 37% in capital gains taxes. Should have waited a few more years before selling. :-) You struck while the iron was hot. Smart move. I'm sure the difference in percentage wouldn't have altered your lifestyle. You only need so much to be comfy, beyond that it doesn't really matter, unless you're in some kind of race. I don't get the impression you're one of those guys. Neither am I. Risk reduction is a good thing when you get past 50. |
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