> But why doesn't this happen to restaurants, or super markets or car mechanics?
It does? How did you miss all of the recent news around Red Lobsters acquisition by PE. Where they bought it, saddled it with debt, sold the land under each restaurant, pocketed the money and then left?
Exactly. Its failure was a self-fulfilling prophecy imposed by PE (and other malicious financial actors). Like Toys R Us and many others, it was a stable but unremarkable business that might have been in dire straits at some point in the future if changes weren't made to update its approach. It was not, as others allege, "failing" - at least, not until PE came along and forced it into an untenable position. But that's what they do.
Don't forget that Red Lobster was already a failing business. The PE that did this is also running several other restaurants that so far are successful. They know what they are doing, and they also know where nothing can save the restaurant and so made the decision to get their losses.
They didn't make the decision to salvage their losses.
Like you said, it was a failing business.
PE didn't come in with the goal to turn Red Lobster around. EVERYTHING the parent poster described was things PE didn't do to save Red Lobster, it was "How can we suck this thing dry before it dies".
The most charitable thing that you could say is that PE was putting Red Lobster out of its misery. While making bank on doing so.
What they did is akin to saying Grandma can stay with me, but she's dying so I'm going to sell her wheelchair. Then I send her to stay with my sister and make them rent the wheelchair back, so other care can't be afforded and her health suffers and she dies.
Then you come along and say, "She was already dying".
It does? How did you miss all of the recent news around Red Lobsters acquisition by PE. Where they bought it, saddled it with debt, sold the land under each restaurant, pocketed the money and then left?