Across the economy, private-equity firms are known for laying off workers, evading regulations, reducing the quality of services, and bankrupting companies while ensuring that their own partners are paid handsomely. The veil of secrecy makes all of this easier to execute and harder to stop.

Sun Capital was able to reacquire Friendly’s free of its pension obligations, without spending anything more than the money it had already lent out. Pensioners lost in this process because their payments were at risk of being cut. Many of the chain’s existing employees lost as well: 63 restaurants closed as part of the bankruptcy process. The Blake

Wasserstein & Co. and Highfields Capital Management LP bought the specialty-food retailer Harry & David, they also forced the company into bankruptcy and pushed pension obligations onto the PBGC, but not before giving themselves $80 million in dividends. (After Harry & David went bankrupt, the CEO of Wasserstein defended its acquisition to

When the Blake brothers finally retired, Friendly’s cycled through a series of owners until 2007, when it was acquired by the private-equity firm Sun Capital. Under Capital’s ownership, Friendly’s struggled. Among other things, the private-equity firm piled debt onto the business, and required it to sell and lease back the property for some 160