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That's a shame. I still don't quite understand how they racked up so much debt. I get that they took on tons of compacts when the nation wanted midsize suv's, but it seems like somewhere an alarm bell should have been ringing a while ago...





They were bought from Ford by private equity which loaded them with extra debt to finance a dividend. They offloaded it via an IPO a year later.

Isn't dividends supposed to be payed from equity? "Loading with debt" will not increase the equity available for dividends.

Yes but you might need that cash on hand for running the business.

The article does a pretty good job of laying out the many mistakes that compounded their problems.



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