THE BURNED OVER DISTRICT

The pillaging of American pensions began in corporate America with the 401K. This allowed corporations to take most of the monies already set aside for pensions and replace it with the chimera of self investment accounts. Since then private equity firms have picked up the torch as part of their campaign to suck all the worker created value out of American companies.

Once the Marsh Supermarkets chain began to falter a few years ago, its owner, a private-equity firm, began selling off the vast retail empire, piece by piece. The company sold more than 100 convenience stores. It sold the pharmacies. It closed some of the 115 grocery stores, having previously auctioned off their real estate. Then, in May 2017, the company announced the closure of the remaining 44 stores.

Marsh Supermarkets, founded in 1931, had at last filed for bankruptcy.

“It was a long, slow decline,” said Amy Gerken, formerly an assistant office manager at one of the stores. Sun Capital Partners, the private-equity firm that owned Marsh, “didn’t really know how grocery stores work. We’d joke about them being on a yacht without even knowing what a UPC code is. But they didn’t treat employees right, and since the bankruptcy, everyone is out for their blood.”

The anger arises because although the sell-off allowed Sun Capital and its investors to recover their money and then some, the company entered bankruptcy leaving unpaid more than $80 million in debts to workers’ severance and pensions.

For Sun Capital, this process of buying companies, seeking profits and leaving pensions unpaid is a familiar one. Over the past 10 years, it has taken five companies into bankruptcy while leaving behind debts of about $280 million owed to employee pensions.

The unpaid pension debts mean that some retirees will get smaller checks. Much of the tab will be picked up by the government’s pension insurer, a federal agency facing its own budget shortfalls.

“They did everyone dirty,” said Kilby Baker, 70, a retired warehouse worker whose pension check was cut by about 25 percent after Marsh Supermarkets withdrew from the pension. “We all gave up wage increases so we could have a better pension. Then they just took it away from us.”

When a company fails, it is sometimes impossible to pay everyone who is owed money. The trouble, according to some critics, is that financial firms often extract money from losing bets to reward themselves and then, through bankruptcy, leave obligations to workers unpaid. Companies owned by private-equity firms have used bankruptcy to leave behind hundreds of millions of dollars in pension debts, according to a government estimate.

“These private-equity firms buy a company, plunder it of any assets, and then send it into bankruptcy without paying employees,” said Eileen Appelbaum, an economist at the Center for Economic and Policy Research who studies private-equity transactions. “To anyone but a bankruptcy court, this looks like a swindle.”

A very profitable swindle and the only way to stop it is to re-write the laws that these big swinging dicks had re-written so they could do this.