Former Bain Capital partner says Romney was 'legally' CEO of Bain Capital until 2002

[brooklynite]

Source: MSNBC

Update 1:36 p.m. A former partner at Bain Capital, who worked at the firm when Republican presidential candidate Mitt Romney was in charge, acknowledged on Sunday that Romney was “legally” the chief executive officer and sole owner of Bain Capital until 2002, not 1999 as Romney has previously stated, and said that Romney was engaged in a “complicated set of negotiations” over his exit pay for at least two years after he says he left the firm.

“Mitt’s names were on the documents as the chief executive and sole owner of the company,” Ed Conard, who served as a partner at Bain Capital from 1993 to 2007, said in an exclusive interview with Up w/ Chris Hayes. Asked again if Romney was chief executive officer of Bain Capital from 1999 to 2002, Conard said, “Legally, on documents, I suppose, yes.”

Despite Romney's statements that he left in 1999, Conard's new remarks suggest that, in fact, Romney's continued ownership of the firm enabled him to negotiate a better exit deal. "We had to negotiate with Mitt because he was an owner of the firm," Conard said.

Video Clip

Read more: http://UpwithChrisHayes.msnbc.msn.com/_news/2012/07/15/12751962-former-bain-capital-partner-says-romney-was-legally-ceo-of-bain-capital-until-2002

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Boy, next people are going to complain about Romney's performance in Massachusetts because LEGALLY he was Governor when he was running for President...

[madashelltoo]

1. I know I'm not the most business savvy person alive, but

how can you be a partner in a solely owned business?

[elleng]

6. Have to read the agreements,

but likely several 'partners' are in fact responsible for day to day management, and maybe other aspects of the business. He 'owns,' but like public companies are owned by shareholders, Boards of Directors approve Executives and their actions, that is, those who 'execute' the decisions.

[Atman]

11. But what would make partner a partner? Shares in the company.

Romney and now Conard are claiming that his was the sole owner. Therefore, no partners. Something is fishy.

[targetpractice]

13. Partners in waiting…

Mitt Romney was the sole owner until he transferred it to another new organization of multiple partners/owners. Conrad was a partner in Bain after Romney's sole ownership tenure.

[Atman]

15. But he still listed himself as SOLE owner.

How does he list himself as sole owner with the SEC if he really wasn't? Seems like a violation (felony?) either way.

[targetpractice]

25. Yeah, he was sole owner until he wasn't anymore in 2002…

He negotiated a deal that closed in 2002 whereupon he was considered retired in 1999 and his severance package started retroactively in 1999 for 10 years. The "retroactive" stuff is only about his compensation package and how he was paid in the end... Not about his actual duties and time spent thinking about Bain Capital. So, technically and legally Romney was considered CEO, chairman of the board, and sole owner of Bain until 2002 while he negotiated a buyout package that he benefited from everything that happened since 1999. There's no wrongdoing there… Because all the people he was negotiating with agreed with that deal.

[elleng]

21. 'Shares' do not make one a partner.

Particular partnership agreements do. Such agreements may or may not include 'ownership', or shareholder, aspects. That's why I said, Have to read the agreements.

[pschoeb]

16. He might have been a partner after Romneys exit

He probably worked at Bain Capitol, and then became a partner in ownership once Romney left sole ownership in 2002. They call him a former partner, because he no longer at Bain Capitol, but it doesn't necessarily mean he was a partner in the 1999-2002 time frame.

Edit,
The journalist is using the wrong term, Ed Conrad was not a partner at Bain Capitol, but was a Managing Director at Bain from 1993-2007, Bain Capitol has tens of Managing Directors.

[TeamPooka]

18. Bain is the umbrella

protecting the subholdings like this Sankaty Ltd. that keeps popping up.
We need to get into the Sankaty stuff.
that's where the real dirt is buried.

[FarCenter]

19. Bain Capital is a Limited Liabilty Company

It is not a partnership, so "Partner" would really be a managerial title.

The LLC's documents and "operating agreement" would lay out ownership and managerial responsibilities of the members.

[elleng]

22. Thanks for adding this element of clarity.

Clearly we're frustrated due to absence of 'agreements,' and I expect if we saw them, we'd still be frustrated, as they're surely complex documents.

[Raven]

2. This is pretty damn bad if Conard is admitting it. n/t

[obxhead]

3. He wasn't "an" owner of the firm.

He was the SOLE owner of the firm.

[tooeyeten]

4. To Bain or not to Bain

that is the question, whether it is better....whatever!

[ProgressiveEconomist]

5. Conard said Romney's GREED was the sticking point

in negotiations about the terms of his departure. It took 3 YEARS to satisfy Mitt's inner Gordon Gekko.

Remember, Romney owned 100 percent of Bain capital stock, and Bain profits averaged 88 percent over a long stretch of deals. Monetizing those kinds of gains puts a huge multiple on the amount of capital Mitt originally supplied, so huge that the partners could argue over just how huge for YEARS.

The words Conard put in Mitt's mouth are:

"i've created a tremendously valuable firm that's making all you guys rich".

[tblue]

8. So it's Conard and the Canard?!

Man, this is some juicy stuff. And ther's no other big news to push it to the back burner. Nyahaha!

[Jessy169]

9. But only retroactively

Which of course, explains everything.

[Stuart G]

10. Oh My..Say it ain't so..Joe...nt

[JDPriestly]

12. Now we need to know what kind of golden parachute Bain took

so long to negotiate.

Did Bain have to outsource jobs and take on a company that disposed of aborted fetuses and take companies into bankruptcy in part to pay Romney's exit fees?

What was Romney's deal? How much did he squeeze out of Bain when he left? Where are his tax returns?

[Botany]

14. The money gained from bain is hard to explain

By jove I think Mitt's got it

The money from Bain is hard to explain
but it falls mostly on Mitt on his private plane

[Kingofalldems]

17. Yeah, but this is making us look bad and

we shouldn't even talk about it and....

[bonniebgood]

20. Everything is so complex because one cannot

be a partner and sole owner at the same time. It maybe took three years (negotiations?)
before the "new buyers" of Bain to come-up with the sole owner (Romney) of Bane "asking price".
I am sure the new owners had to make a lot of tough (shark) decisions, like literally selling America
to meet the asking price for the Bain Empire.
"we had to negotiate with Mitt because he was the sole owner of th Firm" says Conrad.
I read this to mean "It took us three years to come-up with 500 billion dollars before Mitt would sell us the company".

[FarCenter]

23. The mother ship is Bain Capital LLC

Which is different from, e.g. Bain Capital, Inc. a Delaware corporation, or Bain Capital Partners VI, L.P., a Delaware limited partnership, or Bain Capital Investors VI, Inc., a Delaware corporation, or such other corporations, limited liability companies, limited partnerships, etc. which are formed as dictated by business and legal needs.

A large financial organization would consist of from dozens to thousands of business entities.

See http://www.sec.gov/Archives/edgar/data/892058/000092701600002483/0000927016-00-002483-0001.txt for some of these.

[DallasNE]

24. But This Opens A New Can Of Worms For Romney

Romney was under contract with the Olympic Committee to organize and run the winter Olympics and there are conflict of interest stipulation in that contract that required Romney to sever all ties with Bain. That didn't happen for more than 3 years after Romney signed that contract and could well be in violation of conflict of interest provisions. I'm sure others will follow up on this particular angle. Remember, his tax returns ask whether he was an active or inactive managing partner which impacts treatment of his "carry". Romney looks to want to have the best of both worlds at every turn. Well, he needs to man up and take responsibility for his actions and conflicts.

[Iliyah]

26. Also Mittens used Bain

as a source of residency to run for governor in Mass. Therefore, he purported to Mass. in fact that he was still managing Bain.

The offshore tax haven will also unravel. Mittens claims that he will create jobs but in reality his business under his watch outsourced and helped create the unemployment problem right now in America.

[Rosa Luxemburg]

27. Mainstream media is spinning like fury to put Mr. Bain in a good light

spin spin spin.

now it is time hit Romney from all sides

[Dustlawyer]

28. Did he profit from the deals done during those 3 years b/4 he was bought off?

I bet he made money from those. Ompanies that went under!

[FarCenter]

29. It would depend on whether Mitt had a financial interest in the specific deals.

Think of Bain as an ocean liner with many watertight compartments. Each compartment is created as a LLC, corporation, partnership, etc. separate from the whole and separate from each other.

That way, if a particular deal makes money, some of it flows to the owners of the specific deal. If a particular deal goes sour, the losses affect only the capital furnished by participants in the specific deal. Even a spectacularly bad deal, e.g. you buy a company with what turns out to be an EPA superfund site, it doesn't sink Bain as a whole and it doesn't create an unlimited liability for the participants.

Romney has both an MBA and a JD from Harvard.

Setting up ownership structures to maximize control with minimum assets, limit liability, minimize taxes, and maximize returns is corporate law 101.

[Harley Jacobson]

30. who is romney kidding?

not buying it...