OpenGate is more like OpenRaid

The first word in private equity says it all. Private. As in, “not public.” As in “not sharing.” As in “mine.” So it should come as no surprise that private equity firms are responsible for some of the most harmful business practices in the United States.

Nikou’s OpenGate Capital is at the forefront of destruction. Their buy-and-pillage actions don’t just hurt the individual workers; they often harm the entire town, especially when those businesses have been pillars of the community for decades.

“I consider this company, OpenGate Capital, to be the robber barons of this age. They think it’s a big joke. I just don’t find it funny to ruin people’s lives. They just care about lining their pockets with money. I find it to be despicable.” — Connecticut State Senator Cathy Osten

OpenGate has a legacy of greed, destroying companies to pad  its bottom line. Then they simply move on and look for the next business to devour and spit out.

A partial resumé — Nikou is great at doling out pink slips:

• 678 firings at the Pennysaver classifieds — in which ex-employees were paid with checks that bounced.
• 100 jobs cut at the Golden Guernsey Dairy on a Saturday morning with zero notice to employees.
• 140 layoffs at Fusion Paperboard shortly after it received a state loan to remain in Connecticut for ten years.
• 200 dismissals at Hamilton Scientific.

Meanwhile, OpenGate’s owners and investors have pocketed over $5 billion in revenues from 35 acquisitions since 2005.

OpenGate’s latest conquest: Hufcor

Hufcor is a manufacturer of collapsible partitions and glass walls. It was founded in Janesville, Wisconsin, in 1900 and has been a world leader in its industry. Then in 2017, in its 117th year of operation, OpenGate Capital purchased the still-profitable company. OpenGate announced plans to close the factory, which will cost 116 employees, and began looking for cheaper labor in Mexico. Some of those employees had been there for decades and had never worked anywhere else. Now, thanks to the ruthless, unmitigated greed of OpenGate, they’ll need to search for new work during the pandemic.

Hufcor would be the third Wisconsin plant (Guernsey Dairy and Hamilton Scientific) that OpenGate has closed in the last ten years.

Private equity is loaded

With over $3 trillion in their coffers, private equity firms have plenty of money to buy companies like Hufcor. Their influence is everywhere. Even if you don’t work for a company owned by a private equity firm, you probably have friends or family who do. Today more than 35,000 companies are owned by private equity and employ close to six million workers in the United States.

The formula is simple. Turn companies into their personal ATMs.

1. Buy a company (often with borrowed money)
2. Load the company with debt
3. Sell its most valuable assets
4. Fire employees

Employees are disposable

As private equity lines their pockets, lives are ruined – often permanently.

Take Shirley Smith. She loved her job at Art Van Furniture and said her co-workers were like family. Then private equity took over and immediately began squeezing Art Van for cash. Within five minutes of telling employees not to worry and that the company “was trying to reorganize and get more investors” the bankruptcy was announced on the news. Within the hour all the bankruptcy signs showed up. “It was just a shoulder shrug,” said Shirley. “They didn’t care.”

Still, others are driven from their homes by predatory landlords and land barons.

Sidebar: Before Andrew Nikou started OpenGate Capital, he worked at Platinum Equity – a firm notorious for  jacking up prices people pay for calling their loved ones in prison.

Something needs to change

Current law allows private equity firms to take borrowed money to pay themselves and their investors while neglecting the business and the workers they control. Part of the reason they get away with this is that the rules behind how private equity firms work are complicated — by design. They don’t want the Average Joe to understand what’s going on.

That’s where Elizabeth Warren and friends come in.

Warren and a group of lawmakers want to put an end to private equity running companies into the ground, throwing employees out of work — often with no notice — and harming communities.

“It’s clear to me we need to take legislative action in Congress to rip up the predatory playbook that these private equity firms use to leave workers with nothing but pink slips and lost livelihoods.” — Wisconsin Senator Tammy Baldwin

The Stop Wall Street Looting Act will curb some of the private equity industry’s worst abuses, such as gutting newly-acquired firms for huge profits and running the business into the ground while throwing thousands of people out of work. It will also close tax and regulatory loopholes that benefit wealthy executives.

The looting needs to stop. Workers need better treatment.

The Andrew Nikous need to be reined in.

To find out more and urge Congress to put protections into law, please sign this petition.