Wednesday, October 24, 2012

Already, Hints Of Gloria Allred's October Surprise For Romney Don't Make Sense

According to several online sources, Gloria Allred will use a messy divorce settlement, going back to 1986, as proof that Mitt Romney lied under oath.  This divorce centers around a Romney friend and Staples founder, Tom Stemberg, and his wife of the time, Maureen.  By Maureen's account, Romney testified that Staples stock was "overvalued" and further told the court that "I didn't place a great deal of credibility in the forecast of the company's future."  As a result of that, Maureen (and, I guess, now, Allred) has become bitter over the fact that Romney cheated her out of a significant amounts of alimony money because Staples has done so well.

But, here's the thing.  Staples had just opened the doors on its very first store in 1986; the same year as the divorce.  It was a fledgling company with a very uncertain future. More importantly, in 1986, Staples was privately held.  There was no stock to be valued or "overvalued", as Maureen claims.  So, its very doubtful that an astute businessman like Mitt Romney would have made such a statement.

In 1986, Romney's company, Bain Capital, ponied up $4.5 million to get Staples, as Stemberg's dream,  off the drawing board.  But, in 1986 Bain, itself, was struggling to get a footing because it had already picked so many losers.  In fact Wikipedia puts it this way:
"The Bain Capital team was initially reluctant to invest its capital. By 1985, things were going poorly enough that Romney considered closing the operation, returning investors' money back to them, and having the partners go back to their old positions. The partners saw weak spots in so many potential deals that by 1986, very few had been done."
So, in essence, a lot of what Romney and Bain were doing in 1985 and 1986 were a bunch of business crap shoots.  So, it's no wonder that Romney would have been extremely negative in his 1991 court testimony  -- looking backwards to 1986 -- he would have said the outlook on Staples was negative -- if in fact he even did testify to what Maureen is now claiming; over a quarter of a century later.

One last thing.  Staples became a publicly traded corporation in 1989.  By the end of 1990, the price of  its stock had fallen almost 30% from its initial offering price; meaning that the investment community wasn't too sure of the company's future.  So, Romney's initial appraisal of the company was true when you look at  how the stock traded in its first year or so on the stock market.  However, in 1991, the stock took off and, yes Romney's company, Bain, and Stemdberg were able to cash in.  But, remember, this was 6 years after the official divorce proceedings.

The problem, for Romney, is that a lot of people know that Staples is a very successful company.  So, if they hear that he understated that fact in court to cheat Maureen out of money, they are going to be outraged; especially woman.  Unfortunately, there isn't going to be a lot of time to get the above facts out to counter Allred's tactic here.  She knows this; and, that fact is simply disgraceful.


--- TMZ:  Mitt Romney Allegedly LIED in Court To Screw Over Friend's Wife:

--- Wikipedia: Staples, Inc.:

--- Wikipedia: Bain Capital:

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