Elizabeth Warren Questions PetSmart Owner on Worker, Pet Safety
(Bloomberg) -- Senator Elizabeth Warren is asking PetSmart’s owner, BC Partners, for answers regarding the treatment of workers and animals as part of a campaign to rein in private equity.
“We have long been concerned that some private equity funds implement severe cost-cutting measures after acquiring companies, aiming to boost profits for themselves at the expense of workers, consumers, and taxpayers,” Warren (D-MA) and Representative Mark Pocan (D-WI) wrote in a letter to BC Partners Chairman Raymond Svider.
The legislators cited a recent report by advocacy group United for Respect that said safety and working conditions had deteriorated since BC Partners bought PetSmart for $8.7 billion in March 2015 in what was then the largest leveraged buyout in retail.
A representative for BC Partners didn’t immediately respond to a request for comment.
Warren has zeroed in on private-equity owned retailers before, including a demand for payouts to workers promised severance following the liquidation of Toys “R” Us.
Concerns about worker conditions also brought about the reintroduction of her 2019 Stop Wall Street Looting Act last month. Private-equity abuses accelerated during the pandemic, Warren said in an interview last month.
The measure would elevate worker claims in bankruptcy as well as prohibit dividends and layoffs for the first two years after an acquisition to prevent excessive debt and cost-cutting at the expense of employees and companies.
Warren and Pocan asked BC Partners to list steps it’s taken to combat a reported rise in pet deaths and for detailed information about staffing, pay and disclosures about its fees, returns and other retail businesses. Answers will help inform their efforts to pass the Wall Street bill, they said.
The Loan Syndications and Trading Association, a trade group that represents more than 500 firms involved in the origination, syndication and trading of commercial loans, is among those pushing back on the bill.
“Reimposing risk retention on managers is a solution in search of a problem and would add needless costs and friction to the ability of American companies to raise capital,” the group said in a statement Tuesday.
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