Bain Capital, KKR, and Vornado Realty Trust had acquired Toys R Us in March 2005 for $6.6 billion,Bain Capital, KKR, and Vornado Realty Trust had acquired Toys R Us in March 2005 for $6.6 billion,then Toys R Us filed for bankruptcy in 2017.then Toys R Us filed for bankruptcy in 2017.
The heavy debt burden ($5.3 billion) from the buyout left the company with limited flexibility to invest in e-commerce and store improvements, leading to declining sales and eventual bankruptcy.

ESL Investments (run by Eddie Lampert) had acquired Sears Holdings in 2005 for $11 billion (merger of Sears and Kmart, both under Lampert's control),ESL Investments (run by Eddie Lampert) had acquired Sears Holdings in 2005 for $11 billion (merger of Sears and Kmart, both under Lampert's control),then Sears Holdings filed for bankruptcy in 2018, and again in Dec. 2022.then Sears Holdings filed for bankruptcy in 2018, and again in Dec. 2022.
Sears struggled with high debt and underinvestment in its stores and online presence. Despite multiple attempts to restructure, including selling off assets, Sears could not return to profitability.

Golden Gate Capital and Blum Capital had acquired Payless ShoeSource in 2012 for $1.32 billion,Golden Gate Capital and Blum Capital had acquired Payless ShoeSource in 2012 for $1.32 billion,then Payless ShoeSource filed for bankruptcy in 2017 and again in 2019.then Payless ShoeSource filed for bankruptcy in 2017 and again in 2019.
Payless was saddled with significant debt from the leveraged buyout and struggled to compete with online retailers and fast fashion. Attempts to revamp the business model were insufficient to overcome the financial burdens.

Apollo Global Management and Metropoulos & Co. had acquired Hostess Brands 2009,Apollo Global Management and Metropoulos & Co. had acquired Hostess Brands 2009,then Hostess Bands filed for bankruptcy in Jan. 2012 (restructured and sold assets).then Hostess Bands filed for bankruptcy in Jan. 2012 (restructured and sold assets).
Hostess, known for Twinkies, struggled with labor costs and operational inefficiencies. Despite efforts by PE owners to cut costs and restructure, the company couldn't avoid bankruptcy, leading to a temporary cessation of operations before its eventual revival under new ownership.

Bain Capital had acquired Gymboree (started 1976) in 2010 for $1.8 billion,Bain Capital had acquired Gymboree (started 1976) in 2010 for $1.8 billion,then Gymboree filed for bankruptcy in 2017 and 2019.then Gymboree filed for bankruptcy in 2017 and 2019.
Gymboree's $1.8 billion buyout by Bain Capital resulted in a high debt load, which limited the company's ability to invest in new stores and online growth. Competition and changing consumer preferences contributed to its bankruptcy.

Sycamore Partners had acquired Nine West in 2014,Sycamore Partners had acquired Nine West in 2014,then Nine West had filed for bankruptcy in April 2018.then Nine West had filed for bankruptcy in April 2018.
Nine West, a footwear and apparel company, struggled with a heavy debt load post-buyout and changing retail trends. Despite attempts to turn around the business, it filed for bankruptcy.

2 deeper case studies:

Florida's Sun Capital had bought Marsh (a grocery store chain in central Indiana and west Ohio, which started in 1931), in 2006,Florida's Sun Capital had bought Marsh (a grocery store chain in central Indiana and west Ohio, which started in 1931), in 2006,then Marsh filed for bankruptcy in 2017.then Marsh filed for bankruptcy in 2017.
Sun had sold the company jet, sold several store locations ($750,000 in Noblesville, IN, $2.15 million in Greencastle, IN, and $1.2 million in Carmel, IN). Marsh now pays a lease while Sun Capital would collect an unspecified commission on the sales. As early as Dec. 2009, Sun Capital was ready to sell Marsh. Upon Marsh going bankrupt, only 1 of 3 retirement plans was to be funded by the new ownership: the executive's plan, and not the worker pensions or store employees. For the executive's plan, Marsh's top 5 executives were to be awarded $14 million in retirement payments (CEO Don Marsh at $7 million and corporate counsel P. Lawrence Butt at $2.2 million), while the store employees pension was underfunded by $32 million and the warehouse workers pension by $55 million.

Carlyle Group bought Manor Care (national nursing home) in July 2007 for $4.9 billion,Carlyle Group bought Manor Care (national nursing home) in July 2007 for $4.9 billion,then sold the land under the nursing homes and made the nursing homes pay rent. Then came a large Medicare fraud.Manor Care filed for bankruptcy protection in 2018.Manor Care filed for bankruptcy protection in 2018.Jay Powell was a Carlyle executive.

Envision Healthcare, owned by KKR.Envision Healthcare, owned by KKR.
By 2017, Envision went to the emergency departments of hospitals. It did not own hospitals, but just the emergency departments of hospitals, and made the emergency departments a separate entity of insurance coverage. So if you go to the emergency room, your insurance no longer covered it, so you have to pay more. This hit Congress, Congress didn't get rid of it, but changed it, and caused Envision to go bankrupt. In 2011, ESMC (Emergency Medical Services Corporation) changed their name to Envision Healthcare.

In April 2007, Apollo acquired Noranda Aluminum, the U.S. aluminum business of Xstrata for $1.15 billion.In April 2007, Apollo acquired Noranda Aluminum, the U.S. aluminum business of Xstrata for $1.15 billion.
Apollo buys Noranda Aluminum in Missouri (2,500 employees). The put the assets up as collateral. The debt is used to pay for the acquisition, which allows the private equity to take the money, and load the debt onto the company itself, not onto the private equity firm. Apollo negotiates with Missouri to lower the electric bill or they will leave the state, so other Missouri residents pay more, and it worked. But Noranda still went in debt.Noranda went bankruptNoranda went bankruptand because they were the largest taxpayers in the town, caused the schoolteachers of that town to pay their own healthcare.

It should be noted that when a private equity acquires a company, private equities don't use their own money to buy them. They only use 1-2% of their money to, which can explain as to why the company has to make up for it.