M & A Law Prof Blog

Editor: Brian JM Quinn
Boston College Law School

Tuesday, May 15, 2007

House Hearing on Private Equity’s Effects on Workers and Firms

The House Committee on Financial Services is holding a hearing today at 10 a.m. on Private Equity's Effects on Workers and Firms.  You can watch a live webcast of the broadcast here.  According to the House website: 

The hearing will focus on the impacts on workers and firms of the increased role played by private equity funds in American financial markets.  Specifically, the hearing will aim to address the following questions:

1.         Given the typically high degrees of leverage in many of these transactions are the restructured firms able to make the investments in technology, capital equipment, and research essential to long run productivity growth?

2.         Do workers – either through layoffs and/or pay and benefit cuts – find themselves disadvantaged through financial – or other – restructuring?

3.         What are the implications of the very high degrees of profitability in many of these transactions on the growth of income inequality?

Among the speakers will be: Andy Stern, President of the newly-formed and increasingly influential Service Employees International Union; Douglas Lowenstein, President of the newly-formed industry group Private Equity Council; and Jon L. Luther, Chairman and CEO, Dunkin’ Brands Inc.  Dunkin' Brands, owner of Dunkin' Donuts, was purchased last year for $2.4 billion by Bain Capital Partners, Thomas H. Lee Partners and The Carlyle Group.  Luther can therefore be placed on the pro-private equity side of the testimony along with Lowenstein.  Stern, not surprisingly, is in the anti-private equity column.   


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