r/explainlikeimfive • u/Existing_Low_9183 • Feb 14 '25

Economics ELI5: How do private equity firms bankrupt businesses?

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u/Fabtacular1 Feb 14 '25

I wrote a comprehensive answer to this in response to a question about how private equity firms like Bain make money bankrupting companies like Toys R Us. Warning: It's long.

https://www.reddit.com/r/explainlikeimfive/comments/84iz8v/comment/dvq9ck1/?utm_source=share&utm_medium=web3x&utm_name=web3xcss&utm_term=1&utm_content=share_button

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u/phenompbg Feb 14 '25

This is a great answer. Most of the answers here are complete nonsense.

3

u/n0oo7 Feb 15 '25

Well they're trying to explain it like op is five. and you loose allot out of this complicated and nuanced process by explaining it like op is 5 and keeping it short.

1

u/phenompbg Feb 15 '25

Simplifying and glossing over the details is one thing, not knowing what you're talking about and just making up a ridiculous evil capitalist fantasy is another.