Romney?s controversial Anaheim business deal
January 10th, 2012, 3:53 pm ? ? posted by Martin Wisckol, Politics reporter
One of the most controversial businesses taken over by Bain Capital, the company Mitt Romney ran for 15 years, was Anaheim?s DDi, which makes printed circuit boards. The company would eventually flounder, but not before Bain got 200 percent of its investment back.
As with much of Bain?s track record, it?s hard to know exactly how much credit or blame to lay at Romney?s feet. But rival Newt Gingrich
was apparently referring to DDi today when talking about a company in an similar situation that Romney and Bain ?looted.?
Romney touts his stint at Bain as proof of his ability to create jobs, while Gingrich and other critics point to the numerous firings, mass layoffs and bankruptcies that resulted from takeovers by the equity firm. I?ll get into the weeds of Romney?s record at Bain in a subsequent blog post, but wanted to first detail what happened to the company Bain took over in our own backyard during Romney?s 1984-to-1999 stint.
Bain invested $41 million in DDi starting in 1996.? Bain took the DDi stock public in 2000 and eventually liquidated most of its stake in the company, selling shares to the public as well as distributing them to its investors and partners. It generated at least $93 million from selling the stock, according to a 2003 Register story.
Romney personally sold $4.3 million of his DDi stock in May 2001.
And just in time. The tech bubble burst and by the end of 2002, DDi defaulted on debt and cut its workforce by 1,300 workers, to about 1,900. In 2003, it filed for Chapter 11 bankruptcy reorganization. Later that year, the SEC cited Lehman Brothers, one of four investment firms that took DDi public, alleging it pressured analysts to lie about DDi?s worth.
Shareholders sued DDi, saying it withheld information that the company?s fortunes would soon sour, and the company settled for $4.4 million.
In 2005, DDi was the worst performing public company in Orange County, losing 79 percent of its stock value. But the company remains in business and now has about 1,600 employees, according to the Los Angeles Times.
Gingrich specifically took Romney to task today for his dealings with an unnamed company whose details matched those of DDi.
?I think there?s a real difference between people who believed in the free market and people who go around, take financial advantage, loot companies, leave behind broken families, broken towns, people on unemployment,? Gingrich says in this Washington Post story.
More 2012 presidential race
Source: http://totalbuzz.ocregister.com/2012/01/10/romneys-anaheim-business-deal-rouses-controversy/81603/
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