Could someone who understands Wall Street and "high finance" explain how this works?

alecto wrote:

http://lionsdenmedia.hubpages.com/hub/How-Private-Equity-Firms-Like-Bain-Capital-Berkshire-Hathaway-Make-Money

othershoe1030 wrote:How can a corporation like Bain borrow money and then send the company they're buying out the bill? Somehow they burry the company in debt that they (Bain) created, and require the company to pay it off? I'd like to understand the mechanics of this.

Romney and Bain avoided the hostile approach, preferring to secure the cooperation of their takeover targets by buying off a company's management with lucrative bonuses. Once management is on board, the rest is just math. So if the target company is worth $500 million, Bain might put down $20 million of its own cash, then borrow $350 million from an investment bank to take over a controlling stake.

But here's the catch. When Bain borrows all of that money from the bank, it's the target company that ends up on the hook for all of the debt.



Read more: http://www.rollingstone.com/politics/news/greed-and-debt-the-true-story-of-mitt-romney-and-bain-capital-20120829#ixzz25E0wWlSI

http://www.rollingstone.com/politics/news/greed-and-debt-the-true-story-of-mitt-romney-and-bain-capital-20120829?page=2

Bob wrote:

alecto wrote:

http://lionsdenmedia.hubpages.com/hub/How-Private-Equity-Firms-Like-Bain-Capital-Berkshire-Hathaway-Make-Money

From your link, alecto...

"...those talking about private equity are either intentionally lying to you, such as the case with Newt Gingrich..."

Do you agree with the article you linked that Newt Gingrich intentionally lied to us about Bain? I thought the right believes Newt is a knowledgable intellectual who knows about stuff and levels with us. That's what every fox news pundit says.

alecto wrote:Did you ever stop to ask yourself if that article was accurate or if it was just a propaganda piece from a know biased source like "rolling Stone"? Did you ever stop to think that the author of this article does not have a clue how venture capitalist work? I am not a financial guru but how could Bain capital have such a high success rate of turning a troubled business into a successful business if there business model was to buy already troubled businesses that were loaded with debt and problems then simply borrow money from a bank and stick the troubled business with even more debt and problems? If you owned a troubled business would you purposefully hire Bain just so they could stack even more debt on top of your troubled business? That makes absolutely no sense. I think the rolling stone article is a load of shit or they found just a single instance where that was done and the business still failed. Either way if that was Bain Capitals business model no investor in there right mind would invest in Bain and no business in there right mind would look to Bain for help when they were failing. Like I said I am not a financial guru but this article doesn't past the smell test. Bain could not be a successful venture capital firm if that was there business model.

http://lionsdenmedia.hubpages.com/hub/Private-Equity-and-How-They-Work-and-Make-Money

http://tutor2u.net/business/finance/raising_finance_venture%20capital.htm

http://lionsdenmedia.hubpages.com/hub/How-Private-Equity-Firms-Like-Bain-Capital-Berkshire-Hathaway-Make-Money

2seaoat wrote:I am smart enough to know that the financial guys taking the reins of American manufacturing from the production guys........it has destroyed America's middle class. I saw it first hand in manufacturing in the late 70s and I believe it directly relates to the lowering of tax rates on the top income levels. When I was a sophomore in high school my first job was in a family owned brass foundry. The owner was a top income person and probably paid 60% on his income. He reinvested in the foundry, and in reality paid very little taxes because of that reinvestment. He lived in a modest home compared to his income, and part of my job responsibilities was to cut his grass at his home. He lived in the same neighborhood as many of the folks who worked in the foundry, and he would go drink at lunch at a local bar where people who worked for him drank.

People would reinvest and build their business because by doing so they increased their worth, and paid less taxes. The foundry is gone. The financial people after the old man died, sold off the most profitable lines and pocketed the money. They all lived in big fancy houses, and segregated and built a social wall of separation from the workers in the foundry. The high tax rates had the real job creators creating jobs, when the financial people took over, they avoided taxes and did not reinvest in new mold making machines and new capital in the manufacturing process which would reduce tax liability, but not necessarily give you the money to buy a million dollar house on the beach, or open an account in the Caymans. Nope, it is not rocketscience to understand why we are where we are now......and Mitt Romney is the face of the evil which got us here.

Bob wrote:
It's getting harder and harder to get around all the propaganda that comes from both sides. I'm just not smart enough to be able to decide who is telling the truth about all this.

2seaoat wrote:I am smart enough to know that the financial guys taking the reins of American manufacturing from the production guys........it has destroyed America's middle class. I saw it first hand in manufacturing in the late 70s and I believe it directly relates to the lowering of tax rates on the top income levels. When I was a sophomore in high school my first job was in a family owned brass foundry. The owner was a top income person and probably paid 60% on his income. He reinvested in the foundry, and in reality paid very little taxes because of that reinvestment. He lived in a modest home compared to his income, and part of my job responsibilities was to cut his grass at his home. He lived in the same neighborhood as many of the folks who worked in the foundry, and he would go drink at lunch at a local bar where people who worked for him drank.

People would reinvest and build their business because by doing so they increased their worth, and paid less taxes. The foundry is gone. The financial people after the old man died, sold off the most profitable lines and pocketed the money. They all lived in big fancy houses, and segregated and built a social wall of separation from the workers in the foundry. The high tax rates had the real job creators creating jobs, when the financial people took over, they avoided taxes and did not reinvest in new mold making machines and new capital in the manufacturing process which would reduce tax liability, but not necessarily give you the money to buy a million dollar house on the beach, or open an account in the Caymans. Nope, it is not rocketscience to understand why we are where we are now......and Mitt Romney is the face of the evil which got us here.

othershoe1030 wrote:

alecto wrote:Did you ever stop to ask yourself if that article was accurate or if it was just a propaganda piece from a know biased source like "rolling Stone"? Did you ever stop to think that the author of this article does not have a clue how venture capitalist work? I am not a financial guru but how could Bain capital have such a high success rate of turning a troubled business into a successful business if there business model was to buy already troubled businesses that were loaded with debt and problems then simply borrow money from a bank and stick the troubled business with even more debt and problems? If you owned a troubled business would you purposefully hire Bain just so they could stack even more debt on top of your troubled business? That makes absolutely no sense. I think the rolling stone article is a load of shit or they found just a single instance where that was done and the business still failed. Either way if that was Bain Capitals business model no investor in there right mind would invest in Bain and no business in there right mind would look to Bain for help when they were failing. Like I said I am not a financial guru but this article doesn't past the smell test. Bain could not be a successful venture capital firm if that was there business model.

http://lionsdenmedia.hubpages.com/hub/Private-Equity-and-How-They-Work-and-Make-Money

http://tutor2u.net/business/finance/raising_finance_venture%20capital.htm

http://lionsdenmedia.hubpages.com/hub/How-Private-Equity-Firms-Like-Bain-Capital-Berkshire-Hathaway-Make-Money

Yes, Alecto, that is my question too, although the RS article also claims that they don't have a terrifically high rate of return on investment considering what they do.

However, I am specifically trying to figure out how Any private equity group could get loans from Goldman Sachs and then send the bill to the company they just bought. You and I are on the same page with this question I think because as you stated it does not make any sense.
I am not trying to paint Bain as "bad" (although at this point they don't look so good) but trying to understand the Mechanism. I read through the articles you linked to and still didn't see an explanation of how this actually works.

This article is not the only one that describes Bains operation this way: buy, load up with debt, take large bonuses and wait for the company to go bankrupt.

I also realize that they are also successful at really reorganizing companies and putting them back on their feet. I'm not disputing that either. Again, I'm just trying to understand the laws or whatever that allow this debt scheme they seem to run with at times.

Since I started writing this Dreams has posted what is perhaps the most logical explanation I've seen so far. I'm just trying to understand how this works.

Chrissy8 wrote:Democrats convened in Charlotte, NC, will double down on their claim that Bain Capital is really the Bain crime family. They will accuse Republican nominee Mitt Romney and Bain’s other “greedy” co-founders of stealing their winnings, evading taxes and lighting cigars with $100 bills on their yachts.

But Bain’s private-equity executives have enriched dozens of organizations and millions of individuals in the Democratic base — including some who scream most loudly for President Obama’s re-election.

Government-worker pension funds are the chief beneficiaries of Bain’s economic stewardship. New York-based Preqin uses public documents, news accounts and Freedom of Information requests to track private-equity holdings. Since 2000, Preqin reports, the following funds have entrusted some $1.56 billion to Bain:





* Illinois Municipal Retirement Fund ($2.2 million)

* Indiana Public Retirement System ($39.3 million)

* Iowa Public Employees’ Retirement System ($177.1 million)

* The Los Angeles Fire and Police Pension System ($19.5 million)

* Maryland State Retirement and Pension System ($117.5 million)

* Public Employees’ Retirement System of Nevada ($20.3 million)

* State Teachers Retirement System of Ohio ($767.3 million)

* Pennsylvania State Employees’ Retirement System ($231.5 million)

* Employees’ Retirement System of Rhode Island ($25 million)

* San Diego County Employees Retirement Association ($23.5 million)

* Teacher Retirement System of Texas ($122.5 million)

* Tennessee Consolidated Retirement System ($15 million)

These funds aggregate the savings of millions of unionized teachers, social workers, public-health personnel and first responders. Many would be startled to learn that their nest eggs are incubated by the company that Romney launched and the financiers he hired.

Leading universities have also profited from Bain’s expertise. According to Infrastructure Investor, Bain Capital Ventures Fund I (launched in 2001) managed wealth for “endowments and foundations such as Columbia, Princeton and Yale universities.”

According to BuyOuts magazine and S&P Capital IQ, Bain’s other college clients have included Cornell, Emory, the Massachusetts Institute of Technology, Notre Dame and the University of Pittsburgh. Preqin reports that the following schools have placed at least $424.6 million with Bain Capital between 1998 and 2008:

* Purdue University ($15.9 million)

* University of California ($225.7 million)

* University of Michigan ($130 million)

* University of Virginia ($20 million)

* University of Washington ($33 million)

Major, center-left foundations and cultural establishments also have seen their prospects brighten, thanks to Bain Capital. According to the aforementioned sources, such Bain clients have included the Charles Stewart Mott Foundation, the Doris Duke Foundation, the Metropolitan Museum of Art, the Ford Foundation, the Heinz Endowments and the Oprah Winfrey Foundation.

Why on Earth would government-union leaders, university presidents and foundation chiefs let Bain oversee their precious assets?

“The scrutiny generated by a heated election year matters less than the performance the portfolio generates to the fund,” California State Teachers’ Retirement System spokesman Ricardo Duran said in the Aug. 12 Boston Globe. CalSTRS has pumped some $1.25 billion into Bain.

Since 1988, Duran says, private-equity companies like Bain have outperformed every other asset class to which CalSTRS has allocated the cash of its 856,360 largely unionized members.

Is Bain really a gang of corporate buccaneers who plunder their ill-gotten gains by outsourcing, euthanizing feeble portfolio companies and giving cancer to the spouses of those whom they fired? If so, union bosses, government retirees, liberal foundations and elite universities thrive on the wages of Bain’s economic Darwinism.

If, however, these institutions relish the yields that Bain Capital generates by supporting start-ups and rescuing distressed companies, 80 percent of which have prospered, then this money is honest — and Team Obama isn’t.



Read more: http://www.nypost.com/p/news/opinion/opedcolumnists/look_who_parks_their_cash_at_bain_88KSQrw8BXciEidja2ZQXN#ixzz25FB2VwUN

Chrissy8 wrote:

Chrissy8 wrote:Democrats convened in Charlotte, NC, will double down on their claim that Bain Capital is really the Bain crime family. They will accuse Republican nominee Mitt Romney and Bain’s other “greedy” co-founders of stealing their winnings, evading taxes and lighting cigars with $100 bills on their yachts.

But Bain’s private-equity executives have enriched dozens of organizations and millions of individuals in the Democratic base — including some who scream most loudly for President Obama’s re-election.

Government-worker pension funds are the chief beneficiaries of Bain’s economic stewardship. New York-based Preqin uses public documents, news accounts and Freedom of Information requests to track private-equity holdings. Since 2000, Preqin reports, the following funds have entrusted some $1.56 billion to Bain:





* Illinois Municipal Retirement Fund ($2.2 million)

* Indiana Public Retirement System ($39.3 million)

* Iowa Public Employees’ Retirement System ($177.1 million)

* The Los Angeles Fire and Police Pension System ($19.5 million)

* Maryland State Retirement and Pension System ($117.5 million)

* Public Employees’ Retirement System of Nevada ($20.3 million)

* State Teachers Retirement System of Ohio ($767.3 million)

* Pennsylvania State Employees’ Retirement System ($231.5 million)

* Employees’ Retirement System of Rhode Island ($25 million)

* San Diego County Employees Retirement Association ($23.5 million)

* Teacher Retirement System of Texas ($122.5 million)

* Tennessee Consolidated Retirement System ($15 million)

These funds aggregate the savings of millions of unionized teachers, social workers, public-health personnel and first responders. Many would be startled to learn that their nest eggs are incubated by the company that Romney launched and the financiers he hired.

Leading universities have also profited from Bain’s expertise. According to Infrastructure Investor, Bain Capital Ventures Fund I (launched in 2001) managed wealth for “endowments and foundations such as Columbia, Princeton and Yale universities.”

According to BuyOuts magazine and S&P Capital IQ, Bain’s other college clients have included Cornell, Emory, the Massachusetts Institute of Technology, Notre Dame and the University of Pittsburgh. Preqin reports that the following schools have placed at least $424.6 million with Bain Capital between 1998 and 2008:

* Purdue University ($15.9 million)

* University of California ($225.7 million)

* University of Michigan ($130 million)

* University of Virginia ($20 million)

* University of Washington ($33 million)

Major, center-left foundations and cultural establishments also have seen their prospects brighten, thanks to Bain Capital. According to the aforementioned sources, such Bain clients have included the Charles Stewart Mott Foundation, the Doris Duke Foundation, the Metropolitan Museum of Art, the Ford Foundation, the Heinz Endowments and the Oprah Winfrey Foundation.

Why on Earth would government-union leaders, university presidents and foundation chiefs let Bain oversee their precious assets?

“The scrutiny generated by a heated election year matters less than the performance the portfolio generates to the fund,” California State Teachers’ Retirement System spokesman Ricardo Duran said in the Aug. 12 Boston Globe. CalSTRS has pumped some $1.25 billion into Bain.

Since 1988, Duran says, private-equity companies like Bain have outperformed every other asset class to which CalSTRS has allocated the cash of its 856,360 largely unionized members.

Is Bain really a gang of corporate buccaneers who plunder their ill-gotten gains by outsourcing, euthanizing feeble portfolio companies and giving cancer to the spouses of those whom they fired? If so, union bosses, government retirees, liberal foundations and elite universities thrive on the wages of Bain’s economic Darwinism.

If, however, these institutions relish the yields that Bain Capital generates by supporting start-ups and rescuing distressed companies, 80 percent of which have prospered, then this money is honest — and Team Obama isn’t.



Read more: http://www.nypost.com/p/news/opinion/opedcolumnists/look_who_parks_their_cash_at_bain_88KSQrw8BXciEidja2ZQXN#ixzz25FB2VwUN

What. No reply to these FACTS?

Dreamsglore wrote:

Chrissy8 wrote:

Chrissy8 wrote:Democrats convened in Charlotte, NC, will double down on their claim that Bain Capital is really the Bain crime family. They will accuse Republican nominee Mitt Romney and Bain’s other “greedy” co-founders of stealing their winnings, evading taxes and lighting cigars with $100 bills on their yachts.

But Bain’s private-equity executives have enriched dozens of organizations and millions of individuals in the Democratic base — including some who scream most loudly for President Obama’s re-election.

Government-worker pension funds are the chief beneficiaries of Bain’s economic stewardship. New York-based Preqin uses public documents, news accounts and Freedom of Information requests to track private-equity holdings. Since 2000, Preqin reports, the following funds have entrusted some $1.56 billion to Bain:





* Illinois Municipal Retirement Fund ($2.2 million)

* Indiana Public Retirement System ($39.3 million)

* Iowa Public Employees’ Retirement System ($177.1 million)

* The Los Angeles Fire and Police Pension System ($19.5 million)

* Maryland State Retirement and Pension System ($117.5 million)

* Public Employees’ Retirement System of Nevada ($20.3 million)

* State Teachers Retirement System of Ohio ($767.3 million)

* Pennsylvania State Employees’ Retirement System ($231.5 million)

* Employees’ Retirement System of Rhode Island ($25 million)

* San Diego County Employees Retirement Association ($23.5 million)

* Teacher Retirement System of Texas ($122.5 million)

* Tennessee Consolidated Retirement System ($15 million)

These funds aggregate the savings of millions of unionized teachers, social workers, public-health personnel and first responders. Many would be startled to learn that their nest eggs are incubated by the company that Romney launched and the financiers he hired.

Leading universities have also profited from Bain’s expertise. According to Infrastructure Investor, Bain Capital Ventures Fund I (launched in 2001) managed wealth for “endowments and foundations such as Columbia, Princeton and Yale universities.”

According to BuyOuts magazine and S&P Capital IQ, Bain’s other college clients have included Cornell, Emory, the Massachusetts Institute of Technology, Notre Dame and the University of Pittsburgh. Preqin reports that the following schools have placed at least $424.6 million with Bain Capital between 1998 and 2008:

* Purdue University ($15.9 million)

* University of California ($225.7 million)

* University of Michigan ($130 million)

* University of Virginia ($20 million)

* University of Washington ($33 million)

Major, center-left foundations and cultural establishments also have seen their prospects brighten, thanks to Bain Capital. According to the aforementioned sources, such Bain clients have included the Charles Stewart Mott Foundation, the Doris Duke Foundation, the Metropolitan Museum of Art, the Ford Foundation, the Heinz Endowments and the Oprah Winfrey Foundation.

Why on Earth would government-union leaders, university presidents and foundation chiefs let Bain oversee their precious assets?

“The scrutiny generated by a heated election year matters less than the performance the portfolio generates to the fund,” California State Teachers’ Retirement System spokesman Ricardo Duran said in the Aug. 12 Boston Globe. CalSTRS has pumped some $1.25 billion into Bain.

Since 1988, Duran says, private-equity companies like Bain have outperformed every other asset class to which CalSTRS has allocated the cash of its 856,360 largely unionized members.

Is Bain really a gang of corporate buccaneers who plunder their ill-gotten gains by outsourcing, euthanizing feeble portfolio companies and giving cancer to the spouses of those whom they fired? If so, union bosses, government retirees, liberal foundations and elite universities thrive on the wages of Bain’s economic Darwinism.

If, however, these institutions relish the yields that Bain Capital generates by supporting start-ups and rescuing distressed companies, 80 percent of which have prospered, then this money is honest — and Team Obama isn’t.



Read more: http://www.nypost.com/p/news/opinion/opedcolumnists/look_who_parks_their_cash_at_bain_88KSQrw8BXciEidja2ZQXN#ixzz25FB2VwUN

What. No reply to these FACTS?

Because someone writes an opinion article doesn't mean it's a fact.

2seaoat wrote:Bob,
I did not leave out anything. Unions do have part of the blame. However, this idea that wages are what makes American products not competitive, is simply not a complete answer. The truth is Germany pays higher manufacturing wages than America, yet the successfully export their products all over the world and have a strong currency and a very strong balance of trade surplus.

The relationship of invested capital and allocation of labor is complex. When I was employed by industry, we had to balance labor costs, material costs, transportation costs, and marketing costs, and often the labor costs was just not that large of a component. We used innovation and capital investment to keep Americans productive, and we would take one worker who operated a bore grinding machine, and we created an automated line which allowed him to operate 5 machines, and doubled our production on each of those machines. The Germans have mastered making production a societal priority. This means investing in training and investing in constant technological improvements.

With the financial folks taking over it is like the slash and burn agriculture of a third world country. We exploit a resource until it is exhausted and then move on to a more fertile soil, which in the global economy these folks had no loyalty, no patriotism, and no fear of moving low technology manufacturing to third world countries, rather than investing some of that capital back into a better bore grinder, or training for the operator, We have allowed the tax rates to fall so low, that we are not seeing the reinvestment levels which were part of our world pre 1980 world, and yes unions who harm productivity are a death knell to American manufacturing, but unions who train and work for higher productivity level.....well the Germans have shown us what we can do.

2seaoat wrote:Bob,
I did not leave out anything. Unions do have part of the blame. However, this idea that wages are what makes American products not competitive, is simply not a complete answer. The truth is Germany pays higher manufacturing wages than America, yet the successfully export their products all over the world and have a strong currency and a very strong balance of trade surplus.

The relationship of invested capital and allocation of labor is complex. When I was employed by industry, we had to balance labor costs, material costs, transportation costs, and marketing costs, and often the labor costs was just not that large of a component. We used innovation and capital investment to keep Americans productive, and we would take one worker who operated a bore grinding machine, and we created an automated line which allowed him to operate 5 machines, and doubled our production on each of those machines. The Germans have mastered making production a societal priority. This means investing in training and investing in constant technological improvements.

With the financial folks taking over it is like the slash and burn agriculture of a third world country. We exploit a resource until it is exhausted and then move on to a more fertile soil, which in the global economy these folks had no loyalty, no patriotism, and no fear of moving low technology manufacturing to third world countries, rather than investing some of that capital back into a better bore grinder, or training for the operator, We have allowed the tax rates to fall so low, that we are not seeing the reinvestment levels which were part of our world pre 1980 world, and yes unions who harm productivity are a death knell to American manufacturing, but unions who train and work for higher productivity level.....well the Germans have shown us what we can do.

Floridatexan wrote:
http://www.huffingtonpost.com/david-callahan/bad-debts-big-profits-how_b_1539328.html

One big question at the center of the private equity debate is whether firms like Bain Capital intentionally set out to burden the companies they take over with debt -- or whether things just sometimes go sour amid failed turnaround efforts.

Defenders of private equity say that piling up debt is nobody's idea of a good business model. People like David Brooks, who yesterday depicted private equity firms as heroic reformers of a bloated business sector, seem unable to imagine that "vampire capitalism" could yield much of a payday.

But, of course, if we have learned anything over the past few decades, it's exactly the opposite: predatory behavior with no productive purpose often does pay in an era of advanced financial engineering and perverse incentives. The leveraged buyout artists of the 1980s famously discovered this and made vast fortunes. Private equity firms, the rebranded heirs to the LBO movement, have found the same thing and one path to riches, it turns out, is by creating bad debt.

The financial reporter Josh Kosman has documented how this works in great detail in his book on private equity, The Buyout of America. Kosman covered the private equity world up close for years as a writer and editor for Buyouts Newsletter, The Deal, and Mergermarket.com. He had exceptional access to leaders in the private equity world and a ringside seat to numerous private equity deals.

A key point that Kosman makes in his book is that, in fact, it can be quite profitable for private equity firms to drive the companies they take over into debt, regardless of whether those companies then end up bankrupt. By taking over companies and having them borrow a lot of money, private equity firms create a pile of cash, some of which they can direct their own way in the form of management fees and dividends. And because interest on the debt is tax deductible, the consequences of reckless borrowing can be kicked down the line. This is exactly what happened with some of the companies that Bain Capital took over. Bain managed to make a huge return on its investments even in cases where companies failed. Creation of new debt made those profits possible.

David Brooks scoffs that "banks would not be lending money to private equity-owned companies, decade after decade, if those companies weren't generally prosperous and creditworthy." But, again, if we have learned anything in recent decades it is that financial institutions are happy to hand out easy money when well-connected insiders who stand to profit are pushing hard for that cash and somebody else can be left holding the bag. We learned that from the S&L scandal, when banks made billions in bad loans so insiders could profit and taxpayers paid the tab; we learned that from the Long-Term Capital Management meltdown when a bunch of "genuises" lost a fortune in borrowed money and almost wrecked the financial system; we learned it from the Internet bubble, when venture capitalists invested in anything with a .com suffix, cashed out after IPOs, and clueless investors took the hit; and we learned this hard lesson yet again from the real estate bubble.

Borrowing lots of money and incurring bad debts is not how real businesses make money in a normal world. But we don't live in such innocent times. Modern American capitalism is rife with sophisticated financial intermediaries who exploit flaws and complexity in the system, as well as insider connections, to make profits off of predatory behavior -- which brings us back to why the attacks on Bain Capital are both accurate and fair.

When Bain took over GS Technologies, the Kansas City steel firm, it put up $8 million of its own money, according to PolitiFact. The rest was put up by partners. Once it controlled the company, Bain had GS Technologies borrow $125 million by issuing corporate bonds. Bain then had the company pay out $65 million to shareholders -- including a $36 million dividend to Bain. GS Technologies then borrowed another $125 million, much of which was spent on modernizing its operations. Bain also reinvested nearly half of its earlier dividends.

The story gets more complex from there, according to PolitiFact, but the bottom line is this: When GS Technologies finally went bankrupt in 2001 it had $554 million in debt. Bain ultimately invested $24 million and ended up with a $50 million return, according to the Los Angeles Times.

PolitiFact's verdict: The Obama campaign's claim that Bain loaded GS Technologies with debt and hurt the company is "mostly true."

Something similar happened with Ampad, another company Bain took over and another focus of Obama attack ads. As Politico has noted, "The company went into bankruptcy in 2000, holding a debt load of more than $400 million. Bain's return on its $5 million investment was $100 million."