Around 20 French former employees of the luggage manufacturer Samsonite are travelling to the US to defend their case against Bain Capital, a former owner of their company, in what French media have labelled "a struggle between David and Goliath".
The trial pitting Samsonite’s laid-off workers against the private equity fund founded by former Republican presidential candidate Mitt Romney is due before a federal court in Boston on Wednesday March 5, 2014.
“For seven years, we have said that we would not give up our fight until the last person responsible for destroying our jobs was prosecuted,” Brigitte Petit, a former employee of the Samsonite factory in the French northern town of Hénin-Beaumont, told FRANCE 24 on Tuesday.
Bain Capital Private Equity acquired the troubled luggage manufacturer in 2003. Two years later, the firm sold its only French factory for one euro to EnergyPlast, which pledged to use the factory to produce solar panels. In 2007, the new owners filed for bankruptcy. The 205 staff members' redundancy packages had to be paid with taxpayers' money.
French courts have since convicted the management of EnergyPlast of organising their fraudulent bankruptcy. In 2012, a Paris appeals court sent three French managers to prison and sentenced them to paying back 2.5 million euros they had illegally siphoned off from the company.
Yet the dismissed workers failed to secure a wider case against Bain Capital in France and took their grievances to the courts of the Boston-based fund’s home jurisdiction.
“Abusive” redundancies
“From the very beginning, the shareholders plotted those abusive dismissals,” said Brigitte Petit, who now chairs AC Samsonite, a group defending the laid-off workers. “They came in for three years to make a profit without any consideration for people’s jobs,” she added from the transit area of Dublin airport.
In addition to grants from local authorities, AC Samsonite has raised 16,000 euros from the public through “Christmas market sales” and private donations to fund its representatives’ trip to Boston. Petit said her former colleagues could not have paid for it themselves: “Very few have found permanent jobs, most are part-timers. There aren’t that many factories left in our region.”
The employees’ lawyer, Fiodor Rilov, told "Le Monde" newspaper that “Bain Capital orchestrated a manipulation to get rid of the Hénin-Beaumont factory by precipitating its bankruptcy”. By selling off its French subsidiary for one euro, the complainants argue that the shareholder made undue savings on redundancy packages and other disposal costs. Rilov says this helped Bain make a $1.7 billion profit on its holding in Samsonite when it sold on the company in 2007.
Although Bain Capital has not answered questions from FRANCE 24 or other media on the case, its website states that “Bain Capital’s investment paid down all term debt, leaving [Samsonite] with significantly less leverage, limited financial covenants and a patient capital structure under which to implement change.”
“Under Bain Capital’s ownership, the company grew revenue strongly and increased profitability,” the website adds.
http://www.france24.com/en/20140304-france-us-samsonite-bain-capital-lawsuit-unemployment/
Filmmaker Hélène Desplanques made a documentary about the case in 2012, "Liquidation totale".
(English subtitles)
http://vimeo.com/49996266
The trial pitting Samsonite’s laid-off workers against the private equity fund founded by former Republican presidential candidate Mitt Romney is due before a federal court in Boston on Wednesday March 5, 2014.
“For seven years, we have said that we would not give up our fight until the last person responsible for destroying our jobs was prosecuted,” Brigitte Petit, a former employee of the Samsonite factory in the French northern town of Hénin-Beaumont, told FRANCE 24 on Tuesday.
Bain Capital Private Equity acquired the troubled luggage manufacturer in 2003. Two years later, the firm sold its only French factory for one euro to EnergyPlast, which pledged to use the factory to produce solar panels. In 2007, the new owners filed for bankruptcy. The 205 staff members' redundancy packages had to be paid with taxpayers' money.
French courts have since convicted the management of EnergyPlast of organising their fraudulent bankruptcy. In 2012, a Paris appeals court sent three French managers to prison and sentenced them to paying back 2.5 million euros they had illegally siphoned off from the company.
Yet the dismissed workers failed to secure a wider case against Bain Capital in France and took their grievances to the courts of the Boston-based fund’s home jurisdiction.
“Abusive” redundancies
“From the very beginning, the shareholders plotted those abusive dismissals,” said Brigitte Petit, who now chairs AC Samsonite, a group defending the laid-off workers. “They came in for three years to make a profit without any consideration for people’s jobs,” she added from the transit area of Dublin airport.
In addition to grants from local authorities, AC Samsonite has raised 16,000 euros from the public through “Christmas market sales” and private donations to fund its representatives’ trip to Boston. Petit said her former colleagues could not have paid for it themselves: “Very few have found permanent jobs, most are part-timers. There aren’t that many factories left in our region.”
The employees’ lawyer, Fiodor Rilov, told "Le Monde" newspaper that “Bain Capital orchestrated a manipulation to get rid of the Hénin-Beaumont factory by precipitating its bankruptcy”. By selling off its French subsidiary for one euro, the complainants argue that the shareholder made undue savings on redundancy packages and other disposal costs. Rilov says this helped Bain make a $1.7 billion profit on its holding in Samsonite when it sold on the company in 2007.
Although Bain Capital has not answered questions from FRANCE 24 or other media on the case, its website states that “Bain Capital’s investment paid down all term debt, leaving [Samsonite] with significantly less leverage, limited financial covenants and a patient capital structure under which to implement change.”
“Under Bain Capital’s ownership, the company grew revenue strongly and increased profitability,” the website adds.
http://www.france24.com/en/20140304-france-us-samsonite-bain-capital-lawsuit-unemployment/
Filmmaker Hélène Desplanques made a documentary about the case in 2012, "Liquidation totale".
(English subtitles)
http://vimeo.com/49996266