Sunday, October 14, 2018

Company profile: Sun Capital Partners

Private-equity firm
Founded 1995; 23 years ago
Headquarters Boca Raton, Florida, US
Key people:
Rodger Krouse (co-CEO)
Marc J. Leder (co-CEO)

Founded by two onetime colleagues at Lehman Brothers, Marc Leder and Rodger R. Krouse, Sun Capital manages billions in private-equity investments, buying and selling companies for profit. The public face of the firm is Leder, a co-owner of the Philadelphia 76ers basketball team and the New Jersey Devils hockey team. Noted for his extravagant parties and yachting expeditions, he has been dubbed by tabloids as “the Hugh Hefner of the Hamptons.”

Marc Leder, left, and guests attend a 2015 benefit in the Hamptons. 

Politically, he may be best known for hosting the Boca Raton, Fla., dinner where presidential candidate Mitt Romney made what became infamous comments about the “47 percent of the people .. who are dependent upon government, who believe that they are victims.”

Underfounded pensions
Over the past 10 years, Sun Capital has taken five companies into bankruptcy while leaving behind debts of about $280 million owed to employee pensions.

At two of them, Sun Capital took millions of dollars out of the companies while leaving pensions underfunded.

At Powermate, a manufacturer of electric generators with a factory in Nebraska, Sun Capital took $20 million from the company as a dividend in 2006, according to court documents. Two years later, it sent the company into bankruptcy court, leaving the government insurer to pay for the underfunded pension covering 600 workers.

At Indalex, an Illinois-based aluminum parts maker, Sun extracted a dividend of $70 million in 2007, according to court documents. Two years later it sent the company into bankruptcy, leaving the government insurer to pay more than 3,000 pensioners.

At the other two companies, Friendly’s in 2011 and Fluid Routing Solutions in 2009, Sun Capital used the bankruptcy court to shed the pension obligations — and then kept operating. First, Sun put each company into bankruptcy, essentially relinquishing control. In bankruptcy court, the companies were absolved of their pension debts of $115 million and $30 million, respectively. Then, once the companies were pension-free, Sun Capital bought the same companies out of the ensuing bankruptcy auction.

During the period when these five companies filed for bankruptcy with underfunded pensions, Sun had investments in more than 80 companies.

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