(From the PBS News Hour Transcript of Potential Risks of Borrowing Money)
JOSH KOSMAN: The Boston Consulting Group last year predicted half of their companies would default. Let's say the companies that go bankrupt end up laying off a quarter of their people, a third. You know, you can easily get to more than a million people. That's a lot of people.
PAUL SOLMAN: In fact, says Kosman, half of the S&P-rated firms that went bankrupt last year, besides banks, that is, were private equity acquisitions, including Chrysler, Simmons, Six Flags, and "Reader's Digest," where retirees, including executives, had their pensions slashed by a debt-driven bankruptcy.
Ken Gordon was president.
KEN GORDON, former president, "Reader's Digest": I have lost 80 percent of my total pension.
PAUL SOLMAN: Did you ever imagine you might not see that money?
KEN GORDON: Not in my wildest dreams.
PAUL SOLMAN: Same for former editor in chief Ed Thompson.
ED THOMPSON, former editor in chief, "Reader's Digest": I lost about $75,000 a year.
PAUL SOLMAN: What was your reaction?
ED THOMPSON: Anger. How could they have screwed up this company to the point where they have to go through bankruptcy
JANE PERSONENI, former head of international advertising, "Reader's Digest": When you begin to see these people taking over, it's like Predator drones are coming in.
PAUL SOLMAN: Jane Personeni, head of international advertising, lost about a third of her pension.
JANE PERSONENI: Am I crying poverty? No, I'm not. But it certainly -- it was something I felt I had earned. It was something I thought was going to keep going. And it stopped.
PAUL SOLMAN: Others are near poverty, however.
