Item — HN Reader

Because it was a dead man walking by the time PE bought it. The underlying assets were worth more than the sale price so it was never going to make sense to do anything other than what happened.

With that said, the tax code and employee law could be improved so there are stronger guardrails to protect some stakeholders more.

1 comments

> The underlying assets were worth more than the sale price

That's not so clear to me. The real estate wouldn't have been worth so much without the existing restaurants having to pay rent.

Retail property value is mostly about location, not whether there is a currently successful business operating there.

Sure, but Red Lobster should be able to make ends meet paying that rent. Their accountants should run the numbers and have numbers for what the restaurant made after paying rent, and what the real estate investment made from rent. Even though the same entity owns both they still need to know where the money is. If a restaurant cannot make money except that the real estate is paid off and thus rent free (or maybe bought at lower than current prices and so payments are artificially low) then they should close and rent the real estate out to someone else.

The above is something people often fail to think of. If you (as is common) have something that could be two independent business with one supplying the other, then you should have your accountants figure out the numbers for each separately. (this is not easy, and eventually not worth it)