What exactly does Hooligan do that they have 1.2 billion in debt? Like I thought they sold T-shirts and made YouTube videos?
this post was submitted on 10 Sep 2024
32 points (100.0% liked)
Cars - For Car Enthusiasts
3920 readers
8 users here now
About Community
c/Cars is the largest automotive enthusiast community on Lemmy and the fediverse. We're your central hub for vehicle-related discussion, industry news, reviews, projects, DIY guides, advice, stories, and more.
Rules
- Stay respectful to the community, hold civil discussions, even when others hold opinions that may differ from yours.
- This is not an NSFW community, and any such content will not be tolerated.
- Policy, not politics! Policy discussions revolve around the concept; political discussions revolve around the individual, party, association, etc. We only allow POLICY discussions and political discussions should go to c/politics.
- Must be related to cars, anything that does not have connection to cars will be considered spam/irrelevant and is subject to removal.
founded 1 year ago
MODERATORS
Private equity installs middle management with benefits and salaries to pay.
Use excessive production which increases costs.
Almost, private equity buys out companies by giving the owners big buyout cheques with debt that will be saddled on the new company.
So when they “buy Hoonigan for [undisclosed amount]” what they really did was go find a bank that would give them a billion dollar loan for the “value” of the brand they bought and then after buying the the brand, the loans go to the company they bought.
If the owners are smart, they take a cash buyout and bail as soon as possible. Ken Block died before any of that could happen, but others like Hert and Vinny bailed. I don’t follow them enough to know if they were stakeholders in Hoonigan, or what Scotto is up to, but I suspect they all got big cheques when that deal went through.
Then the private equity lets the now empty brand go bankrupt and guess who eats all the debt? Our retirement funds!
And they're not the first to do something that ridiculous. Fortunately for them, a good chunk of that will be for the tax payer to deal with