Friendly's Restaurant Screwing Employees Out of Pensions

[johnnyplankton]

Source: Boston Globe

A federal agency that monitors company pension plans is accusing Friendly Ice Cream Corp.of filing for bankruptcy protection in order to get out of paying the pensions of nearly 6,000 workers and retirees.

Friendly’s, the Wilbraham chain that is owned by private equity firm Sun Capital Partners Inc., filed for bankruptcy protection last week under Chapter 11 and abruptly shuttered 63 stores and laid off about 1,200 workers. The company said it was a casualty of a difficult economy, high supply costs, and changing customer tastes.

But the Pension Benefit Guaranty Corporation, a federal agency responsible for protecting workers’ pension benefits, yesterday said the real reason for Sun Capital’s bankruptcy filing was to use the reorganization process to abandon the pension plan, while retaining ownership of Friendly’s.

“It looks like Friendly’s and Sun Capital are trying to make their employees and retirees bear the brunt of the company’s restructuring; the employees deserve better,” said Josh Gotbaum, director of the Pension Benefit Guaranty Corporation.

Read more: http://www.boston.com/Boston/businessupdates/2011/10/fed-agency-says-will-fight-friendly-effort-dump-employee-pensions-during-bankruptcy/6Vv3VrVSa22qRAO4jpTjQJ/index.html

---

If you're STILL unclear about what the Occupy movement is about...

[izquierdista]

1. Normally, I would be against debtor's prisons......

....but for CEOs who game the bankruptcy laws, I'm willing to make an exception.

[avaistheone1]

11. I have no problem seeing these CEOs jailed.

Friendly's should not be allowed to cheat them out of their pensions.
These Friendly employees are just ordinary working folks and I am sure that money will really make a difference to them.

[aquart]

12. Why are pensions not protected in bankruptcy?

I would think they should be paid first.

[avaistheone1]

13. I imagined they would be.

Seems like a major "oversight" to me.

If our laws allow employees to be cheated like this then it does not speak well for our laws and our country. It's just more of the cancer like we are seeing on Wall Street.

[Initech]

15. Agreed - it's legalized theft.

[RegieRocker]

18. No this wouldn't be debtors prisions it would be fraudsters

prisons.

[Uber DUer]

2. I once went to Friendly's in Rochester, NY

Never again.

Crappy food, bad service.

But the company needs to stop screwing the pension. Make the pension fund the first creditor they have to pay before anybody else.

[MADem]

4. The ones in MA are OK. They are a "known" quantity.

Probably not fancy enough for today's trendy, elite-food tastes, but if you wanted a grilled cheese, or a hotdog, or a club sandwich, soup, a salad, maybe, or a burger that tastes like it came out of the family kitchen, or kind of like you'd get at Grandma's, their stuff was just the ticket. They have frappes and ice cream cones. No real surprises.

I've been to a bunch of 'em, I've gotten decent service. You might have hit a bad day or a bad franchise.

A lot of people are very perturbed at this business, even before the "screw 'em out of their pensions" aspect came to the fore. Friendly's is a bit of an institution, and has been for over half a century.

[Critters2]

6. When I lived in MA, a clam roll with a chocolate Fribble was my favorite meal.

I loved that place. I guess it's just as well I don't live there anymore.

[MADem]

7. The portions aren't crazy-huge either. You get a 1950's amount on your plate.

That sounds like a good meal to me!

Not all of them are closing, just some--so far, anyway.

I am not pleased about the pension rip-off, just as a matter of principle.

[Warpy]

9. Friendly's was where suburbanites would take the kids

It was predictable crap reasonably priced. I think I went there maybe four times in 20 years, usually because nobody else around was open.

[Chan790]

16. They're basically a chain version of the standard New England greasy spoon.

NJ and PA have their diners. New England has its' greasy spoons, little holes in the wall where you can get food cooked on a grill that hasn't been cleaned since the 1950s, a milkshake or a soda and the only side-dish choice is whether or not to eat the coleslaw. (Don't.) I've never known anyone who grew up there that didn't have a favorite "spoon" they could speak ode to. Also they all seem to be run by really old women who insist you call them "grandma".

[KT2000]

3. more private equity firm

tricks to gut company assets.
These firms - all of them - nned to be investigated and their role in the destruction of American business revealed. They are nothing but parasites that get tax breaks for destroying the companies they buy.

[KT2000]

5. Looks like they

are deluxe scammers: http://blogs.wsj.com/deals/2011/10/05/congrats-sun-capital-2-bankruptcies-in-a-week/

[Eric J in MN]

8. The director of that agency was appointed by Obama

...as a recess-appointment.

Let's give Obama some credit for a good appointment.

"Joshua Gotbaum was appointed as the current Director on July 2, 2010 through a recess appointment. Gotbaum served in both the Carter and Clinton administrations in a variety of financial service positions and led the bankruptcy reorganization of Hawaiian Airlines."

http://en.wikipedia.org/wiki/Pension_Benefit_Guaranty_Corporation

[quakerboy]

10. Maybe, just maybe

Private companies should all be forced to fully fund their pension plans, the way we are forcing the USPS to do. Or maybe employees should just be paid more, and chose their own benefits with their own money, seeing as they are not likely to receive the benefit of them otherwise.

[Chan790]

14. Reclassify pensons as non-dischargable debt in bankrupcy.

The reason you can't discharge student loans is because it's debt backed by the Treasury's credit.

If there's a PBGC, then pensions are also being backed by the government and shouldn't be dischargeable either.

[avaistheone1]

17. k&r

[Nye Bevan]

19. Nobody's pensions are endangered here.

If necessary the PBGC (a Government agency) will take over the payments.

[Ikonoklast]

20. YOU get to pay, while the venture capitalists keep the pension money.

FUCK THAT.

No corporate owner should be allowed to dump the pension liabilities on the taxpayers while they loot the business of any worth.

Bain Capital, Mittens' gravediggers of corporate bodies, got wealthy doing this very same thing.

[Nye Bevan]

22. Agreed. I was just pointing out that the subject line is misleading.

The employees don't get screwed. Taxpayers do.

[EdMaven]

21. Sun Capital's got the bucks to pay those pensions.

Sun Capital Partners, Inc., is a private investment firm focused on leveraged buyouts, equity, debt, and other investments in market-leading companies. Sun Capital has invested in more than 275 companies worldwide with combined sales in excess of $40 billion since Sun Capital’s inception in 1995. Sun Capital has offices in Boca Raton, Los Angeles, New York, and affiliates in London, Paris, Frankfurt, Luxembourg, Shanghai, and Shenzhen.

The company’s founders and Co-CEOs , Marc J. Leder and Rodger Krouse have followed almost mirrored career paths – from the University of Pennsylvania Wharton School to Senior Vice Presidents at Lehman Brothers to Sun Capital Partners. They have more than 20 years of experience in leveraged buyouts, investment banking, and business operations. Both are actively involved in identifying all investments made by Sun Capital Partners. They were co-honorees as the 2003 Buyout Pros of the Years by Thomson Venture Economics, a Thomson Financial company and publisher of Buyouts Newsletter.<1>

http://en.wikipedia.org/wiki/Sun_Capital_Partners

Oct. 2 (Bloomberg) -- Marc Leder and Rodger Krouse had had enough of the corporate world. It was 1995, and after a decade of arranging mergers and acquisitions at Lehman Brothers Holdings Inc. in New York, the old college friends decided to strike out on their own.

Their plan: to move to Florida and start a private equity firm that would buy small and mid-size companies in the Southeastern U.S. ...Today, Sun Capital is the biggest private equity buyer of small and medium-sized companies in the U.S.

http://www.bloomberg.com/apps/news?pid=newsarchive&sid=acAvHwtjglow



Roger Krouse's house:



Leder:

It was as if the Playboy Mansion met the East End at a wild party at private-equity titan Marc Leder's Bridgehampton estate, where guests cavorted nude in the pool and performed sex acts, scantily dressed Russians danced on platforms and men twirled lit torches to a booming techno beat.

The divorced Sun Capital Partners honcho rented a sprawling beachfront mansion on Surf Side Road for $500,000 for the month of July. Leder's weekly Friday and Saturday night parties have become the talk of the Hamptons -- and he ended them in style last weekend with his wildest bash yet.

Read more: http://www.nypost.com/p/pagesix/nude_frolic_in_tycoon_pool_S8t8KXKG1IeGFSDtN6Xm9M#ixzz1ayC1knrD

Marc J. Leder, Co-Chief Executive Officer of Sun Capital Partners, Inc., has been engaged in leveraged buyouts, investment banking, and business operations for more than 25 years. Prior to co-founding Sun Capital Partners in 1995, Mr. Leder served as a Senior Vice President of Lehman Brothers in New York.

Rodger R. Krouse, Co-Chief Executive Officer of Sun Capital Partners, Inc., has been engaged in leveraged buyouts, investment banking, and business operations for more than 25 years. Prior to co-founding Sun Capital Partners in 1995, Mr. Krouse was a Senior Vice President of Lehman Brothers in New York.

http://www.suncappart.com/bio.php?member=23


They own among other things "The Scooter Store" -- source of all those tv obnoxious ads targeted to seniors.

[Javaman]

23. Borders Books pulled the same crap. nt