All right. Here we go. Here we go. You ready. I'm ready. Okay. Fast food seafood chain Lobster has filed for bankruptcy protection. 30,000 employees in the United States are affected because many of the 500

restaurants are now forced to close.

Red Lobster executives are blaming the endless shrimp.

For $20 customers could eat all the shrimp they wanted and executives claim that's what broke the bank.

The truth is the executives broke the bank.

It wasn't customers feasting on shrimp. It was private equity feasting on

capitalism. Back in 2014 Red Lobster was sold to the private equity firm of Golden Gate Capital

which paid for most of that purchase by selling off all of Red Lobsters real estate, you know, the land upon which

the restaurants all set. They sold off all the real estate to American

realty capital properties and then Red Lobster leased the property back from them.

That is a certain road to financial ruin for chain restaurants.

McDonald's early on discovered the benefit

to owning the land underneath where they built their franchises, that land serves as a safety

net allowing the company to survive economic downturns.

If an individual restaurant starts to suffer, the chain can take a mortgage out against the

land to get through the rough patches. against the private equity firm that bought Red Lobster

Red Lobster a perfectly good company.

The private equity firm that bought it sold off all the land to pay for the purchase

of Red Lobster. This used to be illegal. Meanwhile the Private Equity Fund pays itself huge fees and Red

Lobster is suddenly a tenant renting all its restaurants. The rent eventually became

unaffordable. So as is always the case when private equity buys a perfectly good company they have to declare bankruptcy.

The business model for private equity is literally looting and pillaging a perfectly good company.

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