THE BURNED OVER DISTRICT

With apologies to Matt Taibbi, it is hard to read about Bain Capital always managed to remain standing, with all the money, when companies it owned collapsed in ruin.

Toward the end of Mr. Romney’s tenure, Bain bought Anthony Crane, a crane rental company, which then acquired a slew of smaller competitors, financed by debt. But a building slowdown hit the company hard, and it filed for bankruptcy in 2004, wiping out $25.6 million from Bain’s investors, along with $9.5 million from Bain employees. The firm, however, collected $12 million in fees over the life of the deal.

Bain officials maintained they still lost money on Crane because it also cost them $5.1 million in carried interest that they otherwise would have garnered from gains in the rest of the fund.

When Bain bought a troubled chain of maternity stores called Mothercare in 1991, its investors put $1.24 million into the deal. Bain repositioned the company and upgraded its merchandise, but the stores still struggled. Bain offloaded the chain in 1993 at a total loss, and the new owners put it into bankruptcy. Bain still collected $1.5 million in fees while it owned the company, bankruptcy records show.

In the case of Cambridge Industries, Bain first acquired a stake in the manufacturer of plastic automotive parts in 1995. Bain employees personally invested $2.2 million, according to bankruptcy records, alongside $15.7 million from outside investors.

Bain immediately collected $2.25 million from Cambridge as a transaction fee for investing in the company. Cambridge then acquired several companies in rapid succession, and each time, Bain earned 0.75 percent of the purchase price as a transaction fee. The rest of Bain’s $10 million in fees came through advisory fees and payments for a debt refinancing completed by Cambridge in 1997.

By then, interest payments from the company’s expansion were outstripping operating income. As part of the refinancing, aimed at lowering interest payments, Cambridge repaid $17 million it owed to a debt fund run by Bain. This involved paying it a $2 million prepayment penalty.

Cambridge was finally forced into bankruptcy in 2000, when Bain declined to provide the company with an infusion of capital needed to fulfill a major new order, according to former company officials. During bankruptcy proceedings, lawyers for some of Cambridge’s creditors leveled scathing criticism at Bain, zeroing in on the fees extracted while they said Cambridge was insolvent, as well as the prepayment to Bain’s debt fund.

Eventually, Bain settled the dispute by paying $1.5 million to the bankruptcy trustee.

If a bankruptcy trustee could only clawback $1.5 Million, that Bain had some juice. But when you can't lose for winning,what can you expect?