I still don't understand how making a purchased company responsible for the debt of its own purchase is legal:
> Getty’s private-equity owners had financed the purchase of Getty with massive debt — $2.6 billion in the case of Carlyle — which became Getty’s debt.
I'm surprised this is the only comment even mentioning private equity, while the article seems to point to the private equity takeover as the root of many of Getty's problems. While changes in the industry and technology have made things tough, I imagine Getty could have found a way to muddle along while still supporting photographers. But with all that debt and pressure to profit, it was almost inevitable that Getty became the disgusting leach that we know today..
Just think about the underlying principle. I borrow $10m from you to buy company X, pay myself a healthy commission, pay an accountant to do some financial wizardry, and now previously-profitable company X is $100m in the red and half the employees are laid off or something while I got a fat fee for restructuring the company.
No, which is why I raised the question - why isn't it illegal? Given the acts with a social cost that soon follow to "pay" for the company's acquisition? Redundancies etc.
It isn’t illegal because no one made it illegal, it’s pretty obvious no? But being a little less flippant, I can’t see any reason why it should be illegal. If I buy a company I should be able to do whatever I want with it. If shareholders didn’t have the power to make choices about the company they own, the very fabric of capitalism would be undermined.
> Getty’s private-equity owners had financed the purchase of Getty with massive debt — $2.6 billion in the case of Carlyle — which became Getty’s debt.