However... I believe that if a business fails... Then whoever owns it should not be rewarded in any way, shape, or form outside of lesson learned.
Think about what you've written here. Now imagine I start a business mowing lawns in the neighborhood. I compete against other landscapers but for whatever reason, my business fails. After I close the business, there are still lawnmowers and other assets.
However if a company is a person, then when it borrows money then it should have to use it's "assets" as collateral.
The lender and borrower will set the terms of a loan. Liens on assets are common. An exchange for stock is common. Sometimes both.
Why are you trying to dictate the terms of a loan between a lender and a company you do not own?
What's happening at Bain is the company borrows money, pays the people at Bain, and then closes if it fails. Only... Bain is still paid.
Well of course! If the company entered into a contract with Bain, they have to pay them. Whether the company borrowed money to pay Bain, paid them with cash on hand, or gave Bain stock in exchange for their services matters not. The owners of the company willingly entered into a contract. Of course they're obligated to honor their end of the deal. Are you concern for the bank that loaned the money? I don't get it.
The "owner" of the business is rewarded for failing. Failing means nothing if you are rewarded for doing it.
If the company has contracted to pay Bain in cash, the owners of that company are hardly rewarded if they fail...especially if they still owe Bain money (or any other companies with whom they've entered into contract). It would suck for the owners.
If the company exchanged stock for Bain's services and ended up failing, Bain is therefore one of the owner's of the failed company and can share in the value of any remaining assets, just like my lawnmowers in the landscaper example.
If the value of those remaining assets should exceed the total investment made by a shareholder, they came out ahead despite proving incapable of competing in the marketplace. Why do you find this offensive?
For example, let's say a guy buys a little piece of land and builds a small hardware store on it. Years later, competition forces him out of business. He has failed. But lo and behold, when he goes to sell the business, it turns out the land's value has risen dramatically and he gets rich.
Should his profits be restricted because his business failed but he still profited?
Given that I own the failed business, should I not be able sell those assets and keep the money? Must I donate them in order to 'learn my lesson'?
If you didn't borrow any money, or accept government money, then sure... I have no problem with that.
But if money is borrowed to pay it's employees/Bain, then no... You don't own whatever assets that you had to put up as collateral. I mean shit... If all you need is a shit load of money, to make a shit load of money even if you fail... That puts a shit load of credit in "Rich getting richer and poor getting poorer" doesn't it?
Let's set any taxpayer issues here aside. Rest assured this libertarian does not support cronyism.
Regarding the statement in bold. You seem to be arguing about which liens come first in the line of creditors following the failure of a business. We all know the IRS gets first dibs. Who comes second is a contractual matter, which can be adjudicated if necessary. I don't get why this bothers you or why you'd criticize Bain for getting paid.
Buying a failed or failing business, and then sinking BURROWED or GOVERNMENT money into it, and then coming out ahead when it STILL FAILS, does not in any way, shape, or form make any logical sense. Unless of course you are using someone else's 401k money.
Again, no cronyism.
Certainly you're not suggesting that if a company is "failing", they should be prohibited from borrowing money? Isn't that a matter for potential lenders to worry about?
Honestly, I don't understand your criticisms of Bain here.
