Telecommunications company Avaya files for bankruptcy
Not to take away from challenges of the legacy telecommunications industry right now, but this article slides in the private equity LBO part of Avaya&#x27;s story at the very end - and then only hints at what happened here.<p>I hope the pensioners and benefits obligations get paid the money they are owed ASAP, because this is a classic story of private equity (Silver and TPG) financially engineering a cash-siphon from a dying dinosaur and then &quot;phoning it in&quot; when it came to the manage out&#x2F;re-price of new risk.<p>I don&#x27;t have a problem with mega private equity and I can see some kool-aid drinkers saying &quot;any acquisition made in October 2007 (the technical peak of the pre-crisis market) was going to have a tough time working out as played&quot;. But this was a deal designed to fail from the start.<p><i>Basically the private equity stunt here was: find a company that has $100, take $99 of it, use the company&#x27;s last $1 to buy a lottery ticket, try to convince other investors that $1 ticket is a winner. They failed huge here.</i>