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July 26, 2010 08:21 AM UTC

high finance wizardry of Michael Bennet

  • 78 Comments
  • by: Barron X

.

It’s gonna come out in the General Election anyway, so why not face up to the allegations now ?  

http://www.thecherrycreeknews….

Apparently a newspaper is printing allegations that Senator Bennet lied, cheated and stole to enrich himself and Phil Anschutz, using some pretty despicable, underhanded methods that impoverished retired Louisiana teachers, threw thousands out of work, and more.  

Your witness, MADCO.

.

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78 thoughts on “high finance wizardry of Michael Bennet”

  1. As someone who is familiar with the financial industry, I’m amazed that Bennet and Anschutz got away with some of these actions.  Based on this article, it seems like they hurt everyone involved with the company except themselves, while Bennet and Anschutz walked away with millions.

    1. There are disturbing facts that might be difficult to overcome.

      Ironically, the details of the source of Bennet’s wealth are revealed largely in a lawsuit by Louisiana teachers, whose investment in theater chain Regal Cinemas went south after Bennet and Anshutz gained control of the company through the purchase of debt, forced other debtors and shareholder into taking losses, then sped off with $1.4 billion in cash, while jobs were lost.

      In the end, Bennet profited mightily from the same flavors of financial manipulations that destabilized Wall Street and led to the crash of 2008, and the loss of millions of jobs and billions in lost productivity. And while Denver taxpayers will take years to climb out of the mess at Denver Public Schools, will voters keep an experienced corporate raider in an appointed United States Senate seat?

  3. 1)  Barron, I never know you loved plaintiffs’ class action lawyers so much that you would peddle an article reporting, as fact, allegations in a plaintiff’s class action complaint that was dismissed very quickly. You must really think all plaintiffs’ class actions are awesome to be citing one of the quick-losing ones. Does the rest of the American Constitution Party share your love of class action lawsuits against businesses?

    2)  The claim, as I understand it, is that “Anschutz/Bennet turned three bankrupt companies into one company that’s still alive 8 yrs later, but along the way, they gave all shareholders, including themselves, too-large dividends, which imposed a tradeoff in downgraded bond rating.” Yawn. And again, I have to ask: Does the rest of the American Constitution Party share your view that when corporate honchos give themselves high pay, they should be sued for it?

    3)  Based on the sheer bizarreness of a devotee of a loony-bin right-wing party citing as holy writ a bunch of dismissed class action lawsuit allegations that corporate honchos got paid too much… Well, it seems pretty clear you’re just chuckling to yourself about oh-so-cleverly coining the phrase “high finance wizardry of Michael Bennet” — but in the process, you’ve dispensed with any critical thinking, or intellectual honesty, about whether you realy think the allegations hold water. Which is to say you’re a cheap hack who, like a lot of dim bulbs credulous enough to join loony-tunes third parties, isn’t nearly as clever as he thinks.

    1. I spent the 8 seconds googling stock values that you were too busy cackling to do, Barron: Regal’s stock price didn’t take any real hit from this supposed nefarious 2003 dividend!  Their stock pretty consistently hovered around $20-22, plus or minus a bit, but consistently centered around $20, from about 2002-2007.  They nosedived in 2008 as the recession hit (movie theater-going seems like something easy for the unemployed masses to cut out of their budgets), but that’s hard to pin on a stock dividend in 2003. So it’s not terribly shocking that a judge thought this lawsuit was crap. But Barron, as the song goes, “Don’t Stop Believin’!”

      1. … when you title yuor post “high finance wizardry of Michael Bennet,” you’re pitching the allegations as supporting mockery of Bennet.  Try manning up and standing by what you’re saying about Bennet, rather than wimpily retreating to, “errr, I did say ‘allegations’ so I can be a coward peddling any shit I want!”

        Amazing you’re not elected to public office yet. But keep on pluggin’

        1. is fair game for scrutiny, including whatever he did for Anschutz, because his experience in the business world is one of the primary reasons he says qualifies him. Barron is completely within bounds to throw out a newspaper article as fodder for discussion. He can even take a mocking tone in his headline.  

  4. Let’s focus on the important matters here — I made millions for myself and my buddy Phil.  Isn’t that enough proof I’m a good businessman?

    You don’t actually expect me to have made money for everyone right?  Phil and I made the initial investment; we deserve all the loot profits.  All those other shareholders just wanted a handout.

          1. First, my comment referred to the AR shrills (rather than mere shills) acting in ways that will do more to drive undecided Dems toward MB than away from him.

            Second, given your own well-documented commitment to an exteme right-wing agenda, your apparent support of AR should probably be taken as evidence of your belief that AR would be easier to beat in the general.

    2. reflects more poorly on the candidate who the swiftboater is shrilling for, than on the candidate who is being swiftboated.

      You’re not a Fake Michael Bennet (you’re not any kind of Michael Bennet); you’re a fake Democrat.

  5. Ah, nothing like starting a nap with a smile!

    The subject of the thread: an article in a newspaper about Michaels Bennet’s activities working for Philip Anschutz. For those who read the article, there was an item about seemingly outsized payouts to newfound stockholders, viz. …

    The subject of most of the comments: Barron X, who posted a link to the article.

    Let’s not talk about the merits of Bennet’s financial dealings, his claims to knowledge/success of/in the business world. Noooo, let’s talk about the political affiliations of Barron X!

    Relationship between the two topics? I dunno either. And not a word about cheery Cherry Creek News (well known Romanoff rag? News to me)!

    I recall posting something last week or so about believers being oblivious to facts. Is there any better proof than the comments in this thread? Denounce away! Refudiate as best you can with personal jabs, Brother Bennetistas. Your collective inabilities to address the allegations of facts in the article tell us all we need to know. (Yes, Raymond-1, I read your comments before writing this graf.)

    Did no one in the Bennet camp imagine this story, in some version, would come out? Have they no coherent answer? Evidently not.

    Time for a nap, so no need to spend more electrons spluttering across the net. I’ve already had my chuckle.

    1. and answers it in the same thread. Like they’re being clever.

      Have they no coherent answer? Evidently not.

      I mean seriously what is that?

      As to the article and all it contained? I suck at all things financial so I’m honestly waiting to see what different opinions come up with. I know when I’m outta my league.

      I did read the article and I will dismiss any argument that centers around the failed lawsuits. In a nation where a woman can actually sue McDonalds over coffee being hot and win, this suit must have been pretty weak to get thrown out.

      As to stock prices and bankruptcy and stock holders…my partner handles all that. I do look forward to hopefully an intelligent discussion.  

      1. .

        or you’re engaging in a little hyperbole.  Right off the bat, I can think of one or two more annoying things, by a wide margin.

        Some of them involve either firearms or bloodshed.  

        .

        1. Viz. that the critic puts forward the best refudiation he/she could come up with … thus leaving the point to stand untouched! (To say nothing of demonstrating a complete ignorance of standard techniques of refutiation, such as the rhetoricial question. An unfortunate testimony to the level of discussion hereabouts, in general.)  

      2. I really don’t understand why so many blame an 80 year old woman for getting third degree burns from a product that is clearly dangerous and defective, especially when served in a drive-through window.

        McDonald’s had received many thousands of complaints about people scalding their tongues, lips, mouths, etc before this woman received her serious burns to her legs. They chose to ignore all those many injuries and continue to serve this defective product. That is what they were being punished for.

        The telling thing is that the millions they lost in that case were like spitting in the ocean of their enormous earnings. This is why we have compensatory damages (which are generally relatively small) AND punitive damages, which are and should be larger because they are intended to correct past egregious behavior and to deter other companies from committing similar egregious acts.

          1. because they were at fault. They deserved to be punished for their egregious behavior. And th eonly way to punish a company with enormous earnings is to have an enormous fine. And $ mil wasn’t even close to that relative to their earnings.

            1. So suing is great when you are suing large corporations but bad when suing doctors?

              I’m pretty sure there might be some problems with that logic.

              I was using the McDonald’s lawsuit as an example (obviously a bad one) of living in a litigious society and hearing about what seem to me, not being a lawyer, weak cases winning large amounts. If the judge threw out the lawsuit against Anschutz (not Bennet btw) then it was obviously a very weak case.

              As for the financial bit of it, MADCO explains it very well below.

              1. Who said anything about doctors?

                While I might agree that our society is litigious (a lawyer might think we are not litigious enough…), I also think we have plenty of safeguards built into the system to protect from frivolous lawsuits. I don’t know any of the details of the lawsuit against PA or MB. Maybe they simply settled out of court for all I know.

                MADCO is entitled to his worldview, as are we all, but IMHO the leveraging of the company to extract those enormous dividends is both unseemly and immoral especially in the face of all the theater closures and layoffs  they had to make.

                1. The LA teachers pension lawsuit was dismissed.  There was no settlement according to every publicly referenced article.

                  One of the safeguards against frivolous lawsuits is the judge can dismiss the case if the judge concludes that even if the plaintiff’s claims can be proved, there would be no awared.  You could look it up.

                  We are all entitled to out own opinions. Facts, however, are not so personally flexible.  Call the CEO at Regal now and ask him whether the closed properties could have been saved  or whether the 3 chains grew too big too fast, (resulting their BK) and shedding some of the exess was necessary.

                  1. see how your nasty side comes out MADCO? Cry you a river for those who lost their jobs. No skin off you d*ck, is there?

                    It is people like you who will rend my party in two as people like me who actually have concern for those who are in difficult times find we can’t stay in a party with Repugnican-lites like yourself.

                    1. Sure, I have concern.

                      I wish my uncle didn’t get layed off the Chrysler line 81 weeks before he could take the early retirement.  I wish Reagan hadn’t fired my great uncle when PATCO went out on strike.    I hate that my college roommate has been layed off at major AMerican software company so often that while he has worked there for a total of 14 years, he has a littel over two years credit in his employment history.  

                      But the way to address that is not to require BK companies to continue operating unprofitable business components.

                       

                    2. and if you read my comments, that was never my point. But you often like ot argue different points than those I am expressing. No one ever said to keep operating an essentially bankrupt concern. Get rid of the previous management and BOD, for sure! Get good talent in to run the company properly absolutely.

                      Just don’t rape the company and take exhorbitant profits from your ownership stake because you are both majority share-owner and majority debt-holder.

                      Other stakeholders should have rights and participation in the process too, not just bond-holders and share-owners. That includes subordinate debt-holders, employees, vendors, etc. Screwing everyone else to get mine first is not a great idea IMHO. That is my point.

                    3. I think I see where we differ.

                      AI did get rid of the previous management and  board of directors at three failing movie theater chains.

                      And they retained and recruited top talent to run the resulting entity.  As owners, or majority owners anyway, they decided to do what busienss owners do: make money.

                      “Other (post BK) stakeholders” did have rights. And everyone else wasn’t screwed.  There are plenty of shareholders in the company now who could sell their stock anytime they choose-  yet they continue to own it.

  6. First- it confuses two events, the impact to shareholders due to the bankruptcy (BK) of the original entities and the impact from anything that happened after emerging from BK and merging three companies into one.

    The current Regal comes from UA Theaters, Edwards Theaters, and  Regal Theaters, three separate movie theater chains.  All three got overextended (over leveraged)  due to rapid and unstable expansion in the 90’s.    All three filed for BK – virtually assuring that the owners, aka shareholders, would be wiped out in the reorganization.  

    The equity owners aren’t always wiped out in BK, but it’s not uncommon because the rule book says the debt holders get paid first- and when there are more liabilities then assets, it is obvious that at least some of the equity will be written off.  

    When there is more liabilities than the all the equity added together- the equity is going to get wiped out, the debt holders will get something less than 100% on what they are  owed and  ownership of the surviving business entity will pass to the former creditors.  In other words- ownership of all of the assets will transfer to the creditors- debt holders.

    In the case of these three- Anschutz Inc is not a publicly traded company so it’s hard to recreate exactly what they did and how.   But they bought the debt (bonds) of the overextended movie theater companies- either as the companies were getting themselves over extended or perhaps even after they had filed for BK.  As the creditors when the business filed for BK, AI was first in line to get compensated.

    The equity was wiped out in the BK, and the bondholder (AI) acquired all of the assets.  In the emergence from BK, AI merged the three chains, kept the name Regal and made plans to sell their ownership interest in an IPO.  As part of the IPO, Regal had to file an “S-1”, which  describes the current structure and ownership of a company and the rights of the security being offered for sale in the IPO.  To say in the S1 that no dividend had been paid nor was any declared, was true.  

    After the IPO- there were new owners, the new shareholders, including the Louisana Teachers pension fund. I have no idea who ran that fund, nor who advised them. But if they did not contemplate or even notice that the new Regal had virtually no debt and was likely to re-leverage to the then industry standard ratios – their fault.  If they thought that any new debt would be used only to renew the expansion plans – which proved to be too much too fast just a few years prior – they were mistaken.   Their lawsuit was dismissed long before it made any progress at all.  

    Regal refinanced the company with new debt.

    In short, in the BK and subsequent restructure the equity was wiped out and the chains were downsized.  AI merged the three failed entities into one after BK, sold the new company by IPO and  refinanced the reborn Regal generating significant cash which they used to pay the special dividend.  

    Some people hear big numbers being paid to the owners – or their staff – and immediately dislike it. Others, hear the big payouts and business downsizing and then dislike it.   More than a few hear “Anschutz” and don’t like it because they dislike his politics.

    I’ve never worked for Anschutz – and he’s a pretty private guy.  But I suspect there were also  failed investments and risks that we are not going to hear about.

    And in the case of Regal I see a risk taking entrepreneur who did his homework on the market value of the assets, the amount of debt and the likely outcome from BK. And earned a significant pay off for taking the risk to save the companies.

    As for Anshutz’s politics- he’s not a candidate.  He’s never been a candidate.  So I don’t care.  I’ve worked for people who’s politics I did not agree with – had nothing to do with my politics.  I wish I had made millions working for them and I admire Bennet for having done so.

    see

    http://en.wikipedia.org/wiki/R…

    http://www.allbusiness.com/leg…

    http://finance.yahoo.com/echar…

    http://www.fundinguniverse.com…

     

    2. “Regal refinanced the company with new debt.”

      Did I read that two rounds of “new debt” were used to fund large payouts to PS and MB, to the tune of $1 b plus?

      Was there also something about layoffs? Perhaps we would benefit from some insight into how pre-bankruptcy, the three theater chains were soooo overstaffed, and that this was the reason for their financial troubles….

      What was the risk taken on? How great was that risk? Was there a plan involving manipulation of laws, or one involving adding value through fresh business innovations? Put another way, was this a business deal involving ideas + effort, or a financial deal of the sort carried out by a legal guy and a financial guy who in fact faced virtually no risk at all and took their payoff by leaving the restructured company with a giant new debt ripe for the next set of operators to dump via bankruptcy? If the latter, maybe legal, but possibly not altogether admirable.

      1. It was a business plan based on the three had built too much, too fast, with too much debt.  When they defaulted on the debt and entered BK- the creditors got all the assets.

        The assets were “reorganized” – merged the husks of three  companies into one. The new entity closed approx 30-35% of the properties in order to remain stable and profitable. Took that one public and sold it in the market by IPO.  That publicly traded company acquired routine debt for biz ops,   for many investors the main milestone for showing “turnaround” or  an actual “save.”  

        PS?

        Anschutz Inc had nothing to do with the three chains getting themselves overextended.    AI had nothing to do with the  market burping and causing the three to default.  AI invested in the debt, I suspect they believed a default was likely, but if the three had been able to service their debt, AI would have recovered principal and interest and moved on.  No headlines.  

        But they blew up.  and so on

        BTW- the new operators have had no real trouble servicing the debt.  RGC appears to be stable and profitable if a little boring.

        1. Is paying $1B or so to PA and MB a “business operation”? That, I perceive, is the central question raised here.

          Beyond that is the question of what value the likes of Goldman Sachs et al add in creating derivatives, to cite another sort of financial operation vs business operation, recalling that this is in the context of a political contest being waged in the wake of a Financial Crash that led to a Great Recession, not a race for Financier of 2010. Fairly or not, the one brings to mind the other–tricks of law and bookkeeping, generically speaking (and who would speak otherwise in these precincts!). If the theatre deal was so clever, so Bennetficial to mankind, gotta wonder why the candidate isn’t telling us all about the great popcorn he provided to the eager Little Ones on Saturday mornings across the Heartland. Etc.  

          1. They got refinanced routine biz.

            They refinanced again to pay a special dividend – not uncommon, not overly burdensome to the company.

            They didn’t do it to get into the movie business- though AI is still a real player in that biz.

            Imagine this- you have a billion dollars. Or 10B.

            You want to invest it fr profit- what do you do?  Not meant to be rhetorical- I’m asking in the World according to JO – what do you do?

            1. I thought you did a great job offering, with logic and intelligence, what could have happened here. JO is never going to accept that this was an above boards financial transaction. The more you offer reasoned intelligent explanations, the more he will move the goal posts.

              From someone who can barely understand how to balance a checkbook, I thank you. You explained it well. It may not be 100% accurate, but it sounds very plausible.  

              1. Anshutz Inc to open the books.  has never happened before – not likely to happen any time soon.

                But I’m pretty sure I got the basic picture right

    3. What happened was nothing more than a shell game, and you defend it and even admire it.

      You’re completely amoral.

      BTW, Anschutz need not be a candidate when he can buy so many off.

      1. Do you remember the time Anschutz bought all those rights of way and and other real estate thinking he could build that pipeline? And he lost hundreds of millions? And fired the guy who failed to turn it into anything good?

        yeah, whatever.

          1. When it is profitable, and has to do with publicly traded companies, we all hear about it.

            When it doesn’t work out so well, we never hear about it.

            Regal worked out well. We hear about it.

            In fact, because the guy who put it together is now running for the US Senate, we hear about it spun and twisted to try and make him look like a bad guy.  It’s bs.

            They were risk investors, sometimes it works, sometimes not.

  7. The “newspaper” is the Cherry Creek News, “With News of Hilltop, Belcaro, Bonnie Brae, Glendale, Country Club and Cherry Creek” – in other words, Romanoff’s former state house district.

    The “news article” carries no byline, but the owner of the “newspaper” is Guerin Green, who describes himself as “a certified gadfly and grenade thrower in the public sphere.” He has Twitter accounts for the newspaper and under his own name, where he has written “At the Andrew Romanoff Tennis tourney at Wash Park. Come by and play!” on 7/17 and “It’s the big untold story in the Michael Bennet – Andrew Romanoff race – Bennet as corporate raider” on 7/22. He follows Romanoff and Andrea Merida.

    Technorati lists Green as blogging for or creating several websites/blogs; the first is – surprise – DraftAndrewRomanoff.com.

    Green is a longtime Democratic activist and consultant who has been writing critically of Bennet for some time. Back in March he failed to get any traction with a piece headlined “Bennet’s ‘Swap’ cost DPS millions.” On January 8, 2009, he wrote a bylined piece in the North Denver News that

    criticized Bennet’s DPS tenure. And on January 3, 2009, he opined that “It’s difficult to see Bennet’s natural affinity for Gunnison ranchers, or Yuma sugar beet farmers, or even union pipefitters in Adams County.”

    Look behind “the story.” Sometimes that’s the story.

        1. But that’s not what doublel said!

          If doublel’s approach stood, then nothing anyone in any campaign would be worth considering … Which, come to think of it, is why this site became known as Bennetpols.

      1. What on Earth did you say to piss off the powers that be?

        I figure all the “F” bombs got my and Aristotle’s little tete-a-tete deleted, but my other comments were very innoucuous…

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