Bain Capital: Ampad Bankruptcy Wasn't Our Fault
The private equity company pushes back at Democratic attacks on their stewardship of American Pad & Paper.
Bain Capital released a rare statement today pushing back on Democratic attacks over the private equity company's stewardship of American Pad & Paper in order to raise concerns about Mitt Romney.
The company does not deny that they laid off workers and closed factories, but says their efforts grew the company's business, blaming big-box-retailers and foreign competition for Ampad's subsequent bankruptcy.
But as POLITICO's Maggie Haberman reported today: The company went into bankruptcy in 2000, holding a debt load of more than $400 million. Bain's return on its $5 million investment was $100 million. Additionally, creditors were repaid $.002 for every dollar owed in the bankruptcy.
Below is the statement from Bain Capital:
Throughout Bain Capital’s 28-year history, we have been focused on growing businesses and improving their operations. We acquired Ampad from Mead Corp. in 1992, and grew the overall business during the four years we controlled the company. The Marion plant was a challenging situation in a business that was performing well overall, growing revenues and adding jobs. Our control of Ampad ended in 1996, fully four years before it encountered financial difficulties due to overwhelming pressure from ‘big box”’ retailers, declines in paper demand, and intense foreign price pressures. Despite political attacks that emphasize the few companies that have struggled, the facts are that during Bain Capital’s ownership, revenues grew in 80 percent of the more than 350 companies in which we have invested.
UPDATE: Bain maintained a "Management Advisory Agreement" with Ampad after 1995 — receiving $2.4 million in 1998 and $1.5 million in 1999 — with several Bain executives service on the company's Board of Directors.