wattsy Posted November 13, 2012 Share #1 Posted November 13, 2012 Advertisement (gone after registration) Kodak reaches deal to borrow $793 million - CBS News Blackstone Group rears its ugly head again. Link to post Share on other sites More sharing options...
Advertisement Posted November 13, 2012 Posted November 13, 2012 Hi wattsy, Take a look here Kodak reaches deal to borrow $793 million. I'm sure you'll find what you were looking for!
Messsucherkamera Posted November 14, 2012 Share #2 Posted November 14, 2012 I saw the thread title and thought, "how in blazes can a corporation as ravaged as Kodak possibly borrow over three quarters of a billion dollars?" Ah - Blackstone. Say no more. This seems like the corporate equivalent of a bank lending someone who makes $30,000 a year the money to finance a $600,000 McMansion. Talk about making a deal with the devil... Link to post Share on other sites More sharing options...
traveler_101 Posted November 14, 2012 Share #3 Posted November 14, 2012 So what does it mean? Blackstone will end up cannibalizing the company? Link to post Share on other sites More sharing options...
tobey bilek Posted November 17, 2012 Share #4 Posted November 17, 2012 They know what they are "buying". If they outright bought it, the value would be driven down. Employees better hope the pension money is placed out of their grasp, like an annuity purchased for them. I fail to see how a company like Blackstone or Romney`s Bain Capital are bad people. They can buy up a company like Kodak on the cheap ONLY because the company is already a basket case and ready to go under anyway. The risk is can part or all of it be salvaged to make a profit. Link to post Share on other sites More sharing options...
AlanG Posted November 17, 2012 Share #5 Posted November 17, 2012 It isn't as if companies are lined up to finance Kodak or buy any of their assets. Link to post Share on other sites More sharing options...
wattsy Posted November 18, 2012 Author Share #6 Posted November 18, 2012 I fail to see how a company like Blackstone or Romney`s Bain Capital are bad people. They can buy up a company like Kodak on the cheap ONLY because the company is already a basket case and ready to go under anyway. Buying moribund companies "on the cheap" isn't the only MO of these private equity outfits. It is increasingly common for them to acquire basically sound businesses – usually simple ones with strong cashflows and often a freehold property portfolio – load the acquired company with an absurd amount of debt (including that used to buy it in the first place) and proceed to bleed it dry using all manner of financial wheezes. "bad people" doesn't even begin to describe these scumbags. Link to post Share on other sites More sharing options...
masjah Posted November 18, 2012 Share #7 Posted November 18, 2012 Advertisement (gone after registration) Buying moribund companies "on the cheap" isn't the only MO of these private equity outfits. It is increasingly common for them to acquire basically sound businesses – usually simple ones with strong cashflows and often a freehold property portfolio – load the acquired company with an absurd amount of debt (including that used to buy it in the first place) and proceed to bleed it dry using all manner of financial wheezes. "bad people" doesn't even begin to describe these scumbags. I don't really understand these wheezes, but is something similar what happened to a certain well-known UK football club? Link to post Share on other sites More sharing options...
Messsucherkamera Posted November 18, 2012 Share #8 Posted November 18, 2012 Buying moribund companies "on the cheap" isn't the only MO of these private equity outfits. It is increasingly common for them to acquire basically sound businesses – usually simple ones with strong cashflows and often a freehold property portfolio – load the acquired company with an absurd amount of debt (including that used to buy it in the first place) and proceed to bleed it dry using all manner of financial wheezes. "bad people" doesn't even begin to describe these scumbags. Why can they get away with those business practices? Because they are all perfectly legal. Who made such practices legal? The scumbag politicians - both conservative and liberal -who the voters keep electing. Let's place the blame where it belongs. Link to post Share on other sites More sharing options...
wattsy Posted November 18, 2012 Author Share #9 Posted November 18, 2012 Let's place the blame where it belongs. I couldn't disagree more. There are plenty of things we can do legally that are morally reprehensible. I don't blame those who frame the laws of the land for the actions of those who act in morally reprehensible ways. Link to post Share on other sites More sharing options...
AlanG Posted November 18, 2012 Share #10 Posted November 18, 2012 I'm trying to understand what anyone does not like about this loan. The alternative may be that Kodak closes up shop and liquidates. They don't seem to be getting any traction trying to sell their film assets so what would happen to that in liquidation? In any case it is contingent on Kodak getting at least $500M from selling patents. And we don't know if they will be able to do that although Kodak says it is confident they can reach that goal... according to this report. Link to post Share on other sites More sharing options...
Michael Geschlecht Posted November 18, 2012 Share #11 Posted November 18, 2012 Hello Everybody, Not holding corporate raiders as the people most responsible when a distressed corporation is broken up & parcelled out for the benefit of the parcellers is similar to holding the watch dog responsible when the fox raids the hen house & takes all the chickens away. The one who took the chickens was the fox. To hold the watch dog as MORE responsible while allowing the fox to enjoy a lavish dinner is illogical. A society that focusses blame on less-than-optimal watch dogs instead of its foxes will probably end up with a lot of happy, well fed foxes. Best Regards, Michael Link to post Share on other sites More sharing options...
Messsucherkamera Posted November 19, 2012 Share #12 Posted November 19, 2012 I couldn't disagree more. There are plenty of things we can do legally that are morally reprehensible. I don't blame those who frame the laws of the land for the actions of those who act in morally reprehensible ways. Perhaps the laws are written in such a way that makes morally reprehensible acts by certain entities doable without legal consequences. Has anyone ever considered that possibility? Link to post Share on other sites More sharing options...
Michael Geschlecht Posted November 19, 2012 Share #13 Posted November 19, 2012 Hello Everybody, Clearly Messsucherkamera is correct in saying some laws ARE written which allow foxes to steal chickens out of hen houses without negative consequences. There are loopholes in the law. Also clearly the watch dogs bear some degree of responsibility for these loopholes. None-the-less: Watch dogs giving foxes a license to steal does NOT make it OK to steal. No rocket science necessary to figure this one out. The person who uses the justification "Well, it is legal" to do something reprehensible is the person who bears the brunt of the responsibility for their unsavory act. To condone what the foxes have done as acceptable because of the short comings of the watch dogs is another form of "Blame the Victim". What to do about the watch dogs is a different issue. Best Regards, Michael Link to post Share on other sites More sharing options...
adan Posted November 19, 2012 Share #14 Posted November 19, 2012 @ AlanG - $500 million was previously bid for Kodak's patents, back when they wanted $2.2 billion. Apple and Google: Kodak’s patents will be both of ours, we’ll just keep them at my house | BGR Whether that offer is still open is another matter.... On the question of legal vs. moral, I expect Blackstone and other such financiers worry about moral criticism about as little as Stalin did when he asked "The Pope? How many divisions does he have?" Moral condemnation is fine and dandy - but doesn't amount to much unless you have divisions (lawyers, laws, police - i.e. power) to back it up. Link to post Share on other sites More sharing options...
AlanG Posted November 19, 2012 Share #15 Posted November 19, 2012 Where is the down side of this loan? Link to post Share on other sites More sharing options...
wattsy Posted November 19, 2012 Author Share #16 Posted November 19, 2012 Where is the down side of this loan? I don't disagree, Alan. Kodak are not in a strong position to shop around to find a suitable lender and presumably take what they can get. My little rant about private equity was only tangentially on-topic. That said, Blackstone lending Kodak money strikes me as something like a group of vultures agreeing to feed a starving elephant so that it has the energy to lift itself out of the mud. The latter thinks it has a lifeline, the former just don't want to get their feet dirty. Link to post Share on other sites More sharing options...
AlanG Posted November 19, 2012 Share #17 Posted November 19, 2012 It seems to me the worst that can happen is that the company gets strong enough to sell off assets in a slow and organized way rather than as a fire sale. Link to post Share on other sites More sharing options...
traveler_101 Posted November 19, 2012 Share #18 Posted November 19, 2012 It seems to me the worst that can happen is that the company gets strong enough to sell off assets in a slow and organized way rather than as a fire sale. . . . which might well become important when it comes to finding a buyer for the film division. Please oh please isn't there someone out there that wants the prestige of Kodak film to add to their portfolio? What about 3M or some other big player? Link to post Share on other sites More sharing options...
Stealth3kpl Posted November 19, 2012 Share #19 Posted November 19, 2012 I think Ilford ought to buy it. Pete Link to post Share on other sites More sharing options...
pico Posted November 19, 2012 Share #20 Posted November 19, 2012 Clearly Messsucherkamera is correct in saying some laws ARE written which allow foxes to steal chickens out of hen houses without negative consequences. There are loopholes in the law. The law is not particularly concerned with morality. Capitalism is not concerned with morality. What you perceive to be loopholes are just part of the mechanics of the system. Link to post Share on other sites More sharing options...
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