Plunder: Private Equity’s Plan to Pillage America

Private equity firms must be reined in, argues federal prosecutor Ballou in his fiery debut. He explains that the business model of such firms relies on using borrowed money to purchase companies and then making extreme demands of acquisitions to repay investors and turn a profit, often at the expense of the company’s long-term viability. Detailing the strategies private equity uses to swiftly extract money from businesses, Ballou describes how Sun Capital bought Marsh Supermarkets in 2006, sold the properties the stores stood on, and then pushed the supermarket chain into bankruptcy to avoid having to pay employee pensions. The author highlights the human toll of corporate wrongdoing and tells the story of a woman who had to move out of the home she rented from a private equity firm after her young son was hospitalized for exposure to toxic mold that the company refused to acknowledge or treat. Hair-raising tales of cruel neglect in nursing homes, exploitative hikes in healthcare costs, and underwriting prisons for profit will turn stomachs, and Ballou’s reform agenda is well considered and convincing, including recommendations to cap how much compensation executives can receive after layoffs and to ban the practice of forcing companies to pay dividends by taking on exorbitant debt. This must-read exposé shocks and unsettles. (May)