It's not just everyday people who get confused about terms like Liabilities and Equity.
Even Wall Street mavens like Ron Perleman and "Chainsaw Al" Dunlap can get one term confused for the other and find themselves in trouble.
That's how Sunbeam got in trouble in 2001.
Even Wall Street mavens like Ron Perleman and "Chainsaw Al" Dunlap can get one term confused for the other and find themselves in trouble.
That's how Sunbeam got in trouble in 2001.
You may remember the story from the turn of the millennium where the old-school, trusted American company decided to go on an acquisition spree, gobbling up other firms in their industry in an effort to impress the financial markets.
Unfortunately they layered on over one billion dollars in debt to finance their purchases and ended up not able to make their loan payments - even though they were supposedly building equity with every purchase.
The end result was that Hacksaw Al lost his job and the banks ended up owning the company for a period of time. Bad news and bad business for everyone involved.
Perhaps a little more clarity regarding the true nature of the "equity" they were building would have left fewer people with a bad taste in their mouth.
Regards, Peter
Unfortunately they layered on over one billion dollars in debt to finance their purchases and ended up not able to make their loan payments - even though they were supposedly building equity with every purchase.
The end result was that Hacksaw Al lost his job and the banks ended up owning the company for a period of time. Bad news and bad business for everyone involved.
Perhaps a little more clarity regarding the true nature of the "equity" they were building would have left fewer people with a bad taste in their mouth.
Regards, Peter
202-404-5000
202-404-5000
Did you know that Peter Frampton's home is in Geneva Switzerland? (This isn't it)
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