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January 1, 2019 | Wolves Robbing Sheep Has Become Dominant Business Model

Danielle Park

Portfolio Manager and President of Venable Park Investment Counsel ( Ms Park is a financial analyst, attorney, finance author and regular guest on North American media. She is also the author of the best-selling myth-busting book "Juggling Dynamite: An insider's wisdom on money management, markets and wealth that lasts," and a popular daily financial blog:

Wolves devour sheep when shepherds are sidelined and wolves left to run rampant. This is an epidemic today. Reforms and enforcement are coming because the pendulum has swung too far in favor of the few at the expense of the many.  See: As a grocery chain is dismantled, investors recover their money. Worker pensions are short millions:

According to a 2013 tally by Gotbaum, companies controlled by private-equity firms have used bankruptcy to shed more than $650 million of pension obligations. That leaves the government’s pension insurer or employees to pick up the tab.

Since bankruptcy law changed in 1978, Gotbaum said, “the business community has been inventing new uses of the bankruptcy courts. The private-equity community realized they could use Chapter 11 to do pension laundering…

“You should keep the promises you make to your workers,” President George W. Bush said in signing the last major U.S. effort in pension reform, the Pension Protection Act, in 2006. “If you offer a private pension plan to your employees, you have a duty to set aside enough money now so your workers will get what they’ve been promised when they retire.”

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January 1st, 2019

Posted In: Juggling Dynamite

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