What goes around, comes around......

Discussion in 'Jevic Transportation' started by turtle1621, Sep 13, 2009.

  1. turtle1621

    turtle1621 New Member

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    Doesn't sound like Sun Capital is doing so well:


    <<<<< From the New York Post 7/27/09 >>>>>

    Sun Capital Partners, which just a couple of years ago was among the hottest private-equity groups in the country, has fallen upon hard times of late -- a victim of the recession, bad management decisions and -- according to critics -- outright greed.

    For example, the once-high-flying founders of the 14-year-old distressed-buyout firm, Rodger Krouse and Marc Leder:

    * In 2007, raised an astounding $6 billion for their latest fund, four times as much as their previous investment fund and, to many, a leap for a firm focused on mid-market acquisitions.

    In fact, much of the fund, about 74 percent, remains uninvested at a time when there should be plenty of distressed companies to buy. In addition, the duo in 2008 pledged the $120 million in annual management fees back to the fund to defer taxes and in hopes of increasing profits -- which would be mostly returned to them and not employees.

    But the move appears to have backfired as the separate-fee revenue they expected from completing deals and managing their own businesses decreased, leaving the firm cash-strapped and unable to pay bonuses or even meet its payroll, sources said.

    About 25 percent of the staff have been laid off this year;

    * Who each own 50 percent of the firm, also retain almost complete ownership of each fund. That keeps staff from sharing in any profits;

    * Have not been generous with pumping their own money back into the hobbled firm, and have skimped on salaries. In a move that rankled associates, Leder sent a note to all employees earlier this year after taking a ski vacation on the company jet, according to a Sun investor.

    Leder bragged in the note that he was able to keep up with his private ski instructor. The note arrived just after the two announced that expected bonuses would not be paid.

    The money crunch and the attitudes of the owners have depressed morale, said both a former Sun employee and the investor. More importantly, they have drained the firm of key talent.

    A source said the firm cut staff because there are fewer opportunities now with sellers looking for high prices and uncertain revenues streams during the economic downturn.

    It was a rosier scene at Sun back in 2007.

    That spring, Sun Capital was on a roll, having raised the $6 billion buyout fund in just 47 days. The New York State Teachers Fund, along with the Kentucky and New Mexico pensions, were among its investors. At the time, Leder and Krouse had boasted that the firm had averaged an annual return of 70 percent, before fees.

    Then the recession hit.

    In 2008, Sun's investment pace slowed as financing for buyouts largely evaporated.

    Worse, six businesses, representing a significant amount of invested money, including retailers Mervyn's and Lillian Vernon, went bankrupt, reducing fee income.

    In the first three months of this year, as the cash crunch hit, Sun reduced costs by cutting 50 of the 200 people on payroll, including nearly gutting their 100 Park Avenue office -- which was cut to eight or nine people from 26.

    Among those let go were Gary Talarico, who had run the New York branch, and Brian Meyer, who has since formed his own fund, Pelham Street Capital, to help companies find other businesses to buy.

    The layoffs cut into muscle, the Sun investor said, adding that &quot;there was no rhyme or reason for this except the economic model was broken by the greed of the founders and supreme arrogance that the high-volume, high-fee environment could last forever.&quot;

    Bad management decisions didn't help.

    In early 2008, Sun made an unwelcome offer for publicly traded Kellwood, the maker of the Vince and Phat Farm clothing labels. Kellwood said it would agree to be purchased only if Sun bought the business without any due diligence, said a source with direct knowledge of the situation.

    Shockingly, Sun agreed, and plunked down $882 million.

    It might be the firm's biggest embarrassment. This week Kellwood skirted bankruptcy when it amended debt terms with its lenders. Not so fortunate this year were four Sun companies, like E-Z Pass maker Mark IV and retailer Big 10 Tires, that did collapse, bringing more clouds over the once-hot firm.

    The company, through a spokesman, declined comment.



    <<<<< and from the New York Times >>>>>

    Clouds Hanging Over Sun Capital
    July 27, 2009, 6:40 am

    Over the weekend, The New York Post took a look at Sun Capital Partners, once among the hottest private-equity groups in the country, which has recently fallen upon hard times.

    The Post called the firm a victim of the recession burned by bad management decisions and — according to critics — outright greed.

    The founders of the 14-year-old firm, Rodger Krouse and Marc Leder, raised $6 billion for their latest fund in 2007. About 74 percent of the fund remains uninvested at a time when there should be plenty of distressed companies to buy, the paper said.

    Further, a pledge to put $120 million in annual management fees back to the fund to defer taxes and in hopes of increasing profits, appears to have backfired as separate fee revenue Mr. Krouse and Mr. Leder had expected decreased, leaving the firm cash-strapped and unable to pay bonuses or even meet its payroll, The Post reported, citing unidentified sources.

    About 25 percent of the staff have been laid off this year.

    Meanwhile, Mr. Leder is engaged in a divorce battle with his wife of 22 years. The couple has agreed on the value of most of their $243 million in assets, but they are said to be fighting over the value of Mr. Leder’s 50 percent stake in Sun Capital.



    Greedy b@$t@rds, I hope the wife gets all she can! :clap:
     
  2. Jason

    Jason Duie? You bet we do!

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    I do hope they close down...I hope everyone at that company loses their jobs! However....It would be nice if they could hang in there until the lawsuit is over, just so they can lose and add insult to injury.

    Either way, great news, and they are definately getting everything they deserve!
     
  3. pop

    pop Member

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    man i feal the same. but you have a bigger hard on for them then i do .yrc:TR10driving03:
     
  4. wizzard-100

    wizzard-100 Member

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    Makes me smile

    Hope the company dies. Let em' burn.
     
  5. localdriver

    localdriver Member

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    Missery loves company screw him and his wife, and all of Sun Capital. At one time everybody in that company strived for one thing, to buy and sell company's for a profit, and if one should falter along the way they would right it off!:ranting2:
     
  6. rjjr

    rjjr Member

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    does that mean tim and dave have had to find new jobs ???
     
  7. imported_mothertrucker

    imported_mothertrucker Member

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    they should both burn in hell.:ranting2:
     
  8. cap123ny

    cap123ny New Member

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    Ever check the list of companies these bastards own? I hope they all fry in hell but it sure is going to hurt a lot of innocent folks just like it did us!
     
  9. turtle1621

    turtle1621 New Member

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    The list of companies is long, but Mervyn's department store bankruptcy is a clear example of Sun Capital's modus operandi:

    Chicago Tribune 9/5/08:
    A lawsuit filed this week as part of Mervyn’s Chapter 11 bankruptcy reorganization alleges that the retailer’s “valuable” real estate assets—store-owned locations and below-market leases—were stripped of their value and used partly to service the leveraged buyout debt.

    Mervyn’s real estate was transferred to newly formed companies that, in turn, imposed a nearly 90 percent hike in rents, to $172 million annually, on the merchant, the suit alleges. The additional cost burden, combined with a soft economy, contributed to the bankruptcy filing in July of the 177-store retailer, it said.

    “By separating Mervyn’s real estate assets from its retail operations, the private-equity players made sure that any residual value or upside in the real estate assets were reserved for themselves and not for Mervyn’s,” alleges the suit filed by Mervyn’s Holdings LLC and Mervyn’s LLC against its former private-equity owners and others. “The 2004 transaction is a transaction that ultimately led to Mervyn’s bankruptcy and is a fraudulent transfer that cannot withstand scrutiny.”
     
  10. turtle1621

    turtle1621 New Member

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  11. rjjr

    rjjr Member

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    Parasite companies like Sun Capital make Bernie Maddoff look like a pretty decent guy!!
     
  12. Jockey

    Jockey Member

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    Seems awful convienent for them to be in financial trouble just as WARN act suits by Jevic and others against them coming to resolution.Owners wife filing for divorce? Sounds like cooked up scheme to save his money .
     

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