KMart. Sears. Payless. Toys-R-Us. JOANN Fabrics. Party City.

Whatever happened to them? Private equity.

Private equity firms like to tell a nice story about how they buy up failing businesses and make them better.

That’s a lie.

Over and over again, they buy up businesses doing just fine and run them into the ground. In fact, companies bought by private equity firms are 10 times more likely to go bankrupt than those that aren’t.

Here’s how it works:

Step one: A private equity firm buys a business like Red Lobster. But they typically don’t buy it with their own cash. Instead, they force the business, Red Lobster, to take out a massive loan to pay for its own sale. Now the business is staggering under a huge debt load.

Step two: They strip the company of its assets to turn a profit. This can look like selling the land under the Red Lobster stores, then private equity will pocket that money, and then Red Lobster has to pay rent on land it used to own. So now Red Lobster is stuck paying the initial loan, and now their rent for the land, all while the private equity firm charges them a management fee for its services. So Red Lobster is stretched to the breaking point. It can’t pay its bills. It lays off workers and stores close.

Step three: After all the life has been sucked out of the company and it's saddled with debt, Red Lobster is forced to file for bankruptcy. You’d think the private equity firm would have to pony up and help pay off the debt, right? No. Our system lets private equity firms collect all the benefits of owning the other companies while taking on none of the risk associated with running those companies straight into the ground.

So who has to shoulder the consequences? Workers — nearly all of whom have lost their jobs and who’ve had their pensions completely wiped out by the bankruptcy. And consumers — who get stuck with higher prices and worse experiences.

Private equity doesn’t discriminate when it comes to following this same playbook to loot entire industries. We often hear about how private equity sucks up entire franchises — but they also sink their teeth into life-or-death industries like hospital systems, nursing homes, veterinary clinics, or fire truck manufacturing.

And these private equity firms are living large while their cost-cutting and efficiency-boosting schemes put lives at risk. The CEO of the private equity firm that wiped out hospitals — yes, hospitals — in Massachusetts owned not one, but two yachts, while patients were bleeding out because of his financial cost-cutting.

This isn’t a business model — it’s legalized looting. And it’s wrong.

I believe these practices should be illegal. There should be at least some level of accountability for the people pillaging our stores, restaurants, hospitals, nursing homes, and prisons. But Washington has done next to nothing to rein in these firms. That’s why I’m working on a few different bills to stop this.

I wrote my Stop Wall Street Looting Act to make sure these private equity firms are held accountable for the debt they saddle companies with — and it’s a start. My Corporate Crimes Against Healthcare Act specifically addresses the problem of private equity in the healthcare industry so no one can bankrupt a hospital and get away on their not one but two yachts scot-free.

These private equity firms are buying off politicians and spending millions on lobbying to ensure they can continue making millions off of these practices. The workers and the hospital patients and the consumers do not have an army of lobbyists to watch out for them — but this issue impacts people all across America, and it’s time we do something about it.

It’s going to take all of us continuing to raise the alarm to rein this legalized looting in. If you’re also sick and tired of these private equity firms raking in the big bucks while everyone else pays the price, chip in $28 or anything you can strengthen our grassroots movement for bold, systemic reform?

Thanks for being a part of this,

Elizabeth