this post was submitted on 29 May 2024
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A Boring Dystopia

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[–] ImplyingImplications@lemmy.ca 56 points 5 months ago (1 children)

Golden Gate crippled Red Lobster by selling off one of its most valuable assets, the real estate it owned, in what’s known as a sale-leaseback, for $1.5 billion. With that sale, Golden Gate nearly made back its $2.1 billion purchase of Red Lobster, while turning the chain into a permanent leaser, adding a massive additional cost in the form of rent that was orders of magnitude bigger than the cost of Endless Shrimp. When commercial leases started going up, Red Lobster was highly exposed, but by then Golden Gate had already sold off its shares to Thai Union, which inherited all the debts Golden Gate stacked on the company.

Buy the company for $2.1 billion, sell all of its property for $1.5 billion. Sell the company to someone else. That's the work of job creators right there.

[–] kersploosh@sh.itjust.works 34 points 5 months ago

And the someone else they sold to was crooked, too:

... majority shareholder Thai Union Group, which is also their main seafood supplier, might have pushed the shrimp promotion in order to boost their own sales at the cost of the retailer’s finances. This ownership structure between parties that are supposed to be on opposite sides of restaurant transactions does appear to be a clear conflict of interest.

The bit about the "Codfather" who went to prison for price fixing and dealing with the Russian mob was interesting, too. Wonderful people all around in this story.

[–] gravitas_deficiency@sh.itjust.works 37 points 5 months ago (1 children)

Sounds a whole fucking lot like what happened to Toys’R’Us

[–] psvrh@lemmy.ca 25 points 5 months ago

And Sears. And many, many others.

[–] zcd@lemmy.ca 18 points 5 months ago* (last edited 5 months ago) (1 children)

This practice is also called "cellar boxing" and is often accompanied by abusive short-selling

[–] barsquid@lemmy.world 11 points 5 months ago

How is the SEC so toothless.

[–] chicken@lemmy.dbzer0.com 4 points 5 months ago

So they used to be able to profit by screwing over fishermen, but then someone else got in front of them in line for that, so it got sold to a company with a scheme to gut its assets and offload the lemon to the final bagholders, who filed bankruptcy once they noticed how bad things are, if I'm getting that right

[–] rem26_art@fedia.io 2 points 5 months ago

Man this company is just being passed around and having everyone extract as much as they can from it while making it impossible for it to ever dig its way out.