Beyond that "will and capability" question, would Jim Schultz have filed against KKR & Co. Inc. - would he have had the balls to do so? To take on a top tier major financial industry player - a private equity giant - with his grounding in elite private law firms earlier and most recently being on the payroll of a couple of Minnesota private equity players of lesser status? Where, when losing the election for Minnesota Attorney General he'd have to go back into private practice in a niche fitting his resume?
FIRST -
The complaint filed in the Minnesota Attorney General's lawsuit against Fleet Farm's dangerous neglectful sale of handguns to an unrelated pair of straw buyers is online, and in describing the parties to the litigation it states:
PARTIES
7. Keith Ellison, Attorney General of the State of Minnesota, is authorized under Minnesota Statutes chapter 8 and has common law authority, including parens patriae authority, to bring this action to enforce Minnesota’s laws, to vindicate the State’s sovereign and quasi-sovereign interests, and to remediate all harm arising out of—and provide full relief for—violations of Minnesota’s laws.
8. Defendant Fleet Farm LLC is a Delaware limited liability company with its principal place of business in Appleton, Wisconsin. Fleet Farm LLC is registered as a foreign limited liability company in Minnesota with a registered office address of 1010 Dale Street North, St. Paul, Minnesota 55117. According to federal court filings, Fleet Farm LLC is wholly owned by Fleet Farm Group, LLC. In turn, Fleet Farm Group, LLC is wholly owned by Fleet Farm Guarantor LLC, which is wholly owned by Fleet Farm Intermediate Holdco LLC, which is wholly owned by Fleet Farm Holdco LLC, which is majority owned, indirectly by one or more subsidiaries of KKR & Co. Inc.—a publicly traded private equity and investment banking firm. Fleet Farm LLC was formerly known as Mills Fleet Farm LLC until its name was changed in February 2019.
[bolding emphasis added] Cutting through layers of intermediary limited liability ventures, KKR & Co. Inc. is the bottom line player being sued. It's interests are on the line. It's intermediaries are asserted liable for inappropriate conduct leading to death at the hands of a criminal via a handgun it's agent sold to a straw buyer.
SECOND -
KKR & Co. Inc., also known as Kohlberg Kravis Roberts & Co., is an American global investment company that manages multiple alternative asset classes, including private equity, energy, infrastructure, real estate, credit, and, through its strategic partners, hedge funds. As of December 31, 2021, the firm had completed more than 650 private equity investments in portfolio companies with approximately $675 billion of total enterprise value.[2]: 7 As of December 31, 2021, assets under management ("AUM") and fee paying assets under management ("FPAUM") were $471 billion and $357 billion, respectively.[2]: 166
The firm was founded in 1976 by Jerome Kohlberg Jr., and cousins Henry Kravis and George R. Roberts, all of whom had previously worked together at Bear Stearns, where they completed some of the earliest leveraged buyout transactions. Since its founding, KKR has completed a number of transactions, including the 1989 leveraged buyout of RJR Nabisco, which was the largest buyout in history to that point, as well as the 2007 buyout of TXU, which is currently the largest buyout completed to date.[3][4]
In October 2009, KKR listed shares in the company through KKR & Co., an affiliate that holds 30% of the firm's ownership equity, with the remainder held by the firm's partners. In March 2010, KKR filed to list its shares on the New York Stock Exchange (NYSE),[5] with trading commencing four months later, on July 15, 2010.
As of 2010 KKR had offices in 21 cities in 16 countries across five continents.[1] The firm was headquartered in the Solow Building (9 West 57th Street, New York, New York), but in October 2015, announced its intention to occupy the newly-constructed 30 Hudson Yards.[6]
That is in Wikipedia's opening introductory paragraphs.
No doubt, an 800 pound gorilla in the private equity marketplace. Jim Schultz's marketplace. Interested readers can follow the wiki link. Of interest here, the post continues:
Business structure
In a 2016 interview with Bloomberg, founder Henry Kravis described KKR in terms of three broad buckets: private markets, public markets, and capital markets.[9] The firm has traditionally specialized in private equity investments, focusing on specific industry sectors where the firm has created dedicated investment groups, including:
Core Americas Industries Core European Industries Core Asian Industries Industrials Business Services Retail & Consumer Financial Services Retail & Consumer Energy & Resources Retail & Consumer Energy & Natural Resources Financial Services Energy Financial Services Healthcare Technology Healthcare Industrials Media & Communications Industrials & Chemicals Media & Telecom Healthcare Infra & Utilities Technology Hospital & Leisure Technology, Media & Telecom Travel
Business segments
KKR's business operates in four segments: private markets, public markets, capital markets, and principal activities.[10]
Through its private markets segment, the firm manages and sponsors a group of private equity funds that invest capital for long-term appreciation, either through controlling ownership of a company or strategic minority positions. In addition to traditional private equity funds, KKR sponsors investment funds that invest in growth equity and core equity. The firm also manages and sponsors investment funds that invest capital in real assets, such as infrastructure, energy, and real estate.[10]
Private markets
KKR has raised 23 private and growth equity funds with approximately $102.9 billion of capital commitments through December 31, 2017. Its private equity investment strategy typically seeks to engage primarily in management buyouts, build-ups, or other investments with a view to acquiring a controlling or significant influence. The firm has sourced several smaller growth equity investments and expanded the business by launching dedicated growth equity funds.
KKR's first dedicated growth equity fund, launched in 2016, invests in the technology, media, and telecommunications sector, primarily in the United States, Canada, Europe, and Israel. In 2016, KKR also launched its second dedicated growth equity fund to pursue investments in the health care sector, also primarily in the United States. As of December 31, 2017, they have received $2.0 billion of capital commitments to these strategies.
In 2017, they further expanded on their private equity business by making their first core equity investment, targeting investments that have a longer holding period and a lower risk profile.
[...]
Capital markets
KKR's capital markets business mainly arranges debt and equity transactions for the firm, its portfolio companies, and third parties.[12] KKR's capital markets group raised $815 million of debt needed to close the purchase of Mills Fleet Farm in 2016.[13]
Principal activities
The Principal Activities segment uses KKR's balance sheet assets to support its investment management and capital markets businesses. KKR uses this capital for general partner commitments and to establish a track record for fundraising purposes in new strategies, such as the approximately $1 billion invested in KKR's real estate business as of 2017.[14]
[...]
In 2004 a consortium comprising KKR, Bain Capital and real estate development company Vornado Realty Trust announced the $6.6 billion acquisition of Toys "R" Us, the toy retailer. A month earlier, Cerberus Capital Management, made a $5.5 billion offer for both the toy and baby supplies businesses.[107] The Toys 'R' Us buyout was one of the largest in several years.[108] Following this transaction, by the end of 2004 and in 2005, major buyouts were once again becoming common and market observers were stunned by the leverage levels and financing terms obtained by financial sponsors in their buyouts.[109]
In 2005, KKR was one of seven private equity firms involved in the buyout of SunGard in a transaction valued at $11.3 billion. KKR's partners in the acquisition were Silver Lake Partners, Bain Capital, Goldman Sachs Capital Partners, Blackstone Group, Providence Equity Partners, and TPG Capital. This represented the largest leveraged buyout completed since the takeover of RJR Nabisco in 1988. SunGard was the largest buyout of a technology company until the Blackstone-led buyout of Freescale Semiconductor. The SunGard transaction was notable given the number of firms involved in the transaction, the largest club deal completed to that point. The involvement of seven firms in the consortium was criticized by investors in private equity who considered cross-holdings among firms to be generally unattractive.[110][111]
Since 2005 and the Buyout Boom
[...]
History
[...]
[red bolding added] Up there with Mitt Romney's Bain Capital, definite major leagues of private equity.
The footnote 13 re KKR and Fleet Farm, links to a Reuters item stating in part:
When private equity firm KKR & Co set its sights on a small Midwestern retailer in late 2015, it turned to some of the largest banks on Wall Street to obtain debt financing for the acquisition. It found no takers.
After a handshake deal with the company over the Thanksgiving holiday weekend, KKR was unable to get the money it needed from the two dozen banks it contacted, as a sharp market sell-off sparked a broad pull-back from lending.
Rather than walk away from the deal, a team of capital markets professionals on the 41st floor of KKR’s headquarters in Midtown Manhattan took matters into their own hands.
“We started to feel the banks wobble,” Adam Smith, KKR’s head of capital markets, told IFR. “The debt markets were shut.”
Bypassing the banks - and their underwriting fees - Smith’s team raised the entire US$815m of debt needed to close the purchase directly from investors, allowing KKR’s acquisition of Mills Fleet Farm, a retailer that sells items from hunting rifles to farm supplies, to be announced a few weeks later.
LONG JOURNEY
The Mills deal marked the culmination of a decade-long effort by KKR to build a fully fledged capital markets business.
It originally set up the group in late 2006, during a leveraged buyout boom that pushed deal sizes to new highs - and before the subsequent bust just a year or so later.
As equity cheques got bigger prior to the crash, sponsors were forced to partner up in so-called club deals to get enough downpayment together. But KKR, sceptical about the strategy of sharing lucrative business tips with rivals, was thinking about how to go it alone.
“You would have multiple sponsors with their hands on the steering wheel and that is just a very tough way to drive,” said Smith, who joined the firm in 2007 from law firm Simpson Thacher and helped jump-start the capital markets initiative.
“We decided to go out and raise our own money.”
[...]
[red bolding added] And so, international ultra big money player, KKR stands tall.
But not too tall for Keith Ellison to take on for the safety and benefit of Minnesotans at risk from straw purchased handguns - bought from neglectful vendors - and ending up in the hands of criminals unable to lawfully purchase or own them. Ending up on lawns where tiny children could have ended up dead. Aiding and abetting being one count alleged in the Attorney General Ellison's complaint. Negligence being another count.
Then, in what insults the intelligence of every single Minnesota voter, urban, suburban, exurban and rural, we have Jim Schultz not even sling his own mud, but from hiding behind a skirt via the campaign manager, Jim telling Strib via the surrogate that taking on KKR in court is a miniscule and desperate act:
Christine Snell, Schultz's campaign manager, called Ellison's Tuesday news conference "the last gasp of a dying campaign."
"In response to Jim Schultz's historic endorsement by 22 county sheriffs and many law enforcement organizations, the best Keith Ellison could muster was endorsements from a few DFL attorneys," Snell said. "That is embarrassing for Keith, but not surprising in light of his relentless hostility to police and the reckless Defund-the-Police policies he has embraced."
Either Schultz and advisors are that clued out, or they are bullshitting every citizen of the State of Minnesota expecting an intelligence level that would buy into that crap.
Either way it looks bad. It looks unbelievably amateur.
Hiding. Hedge fund man talking up crime, crime, crime ducks chance to make a substantive comment on a private equity giant being indirectly liable for handgun violence escalation in Minnesota after his having nationally made race baiting assertions against Ellison's handling of his job to FOX host Laura Ingraham:
[...] quite frankly, Keith Ellison is disconnected from the community. If they [Ellison and his House successor Rep. Ilhan Omar] were connected to the community, they would know there's areas of north Minneapolis that have become a shooting gallery, there's areas of St. Paul where on any given day, you might be carjacked or otherwise [...]
A shooting gallery? North Minneapolis, and let's see, that would be what ethnicity? Well, it turns out a "shooting gallery" with KKR-Fleet Farm retailed handguns; and Schultz has the balls to have the campaign manager sling shit while quietly taking a hike, personally. Courage? You decide.
_________UPDATE__________
Trickle down -and- Know who you are dealing with.
Suit against Fleet Farm is logical, in that it is a major player in the retail handgun market, where action against it and against curable lax practices will wake up the retail handgun industry, top down.
For a scale of things this retailer, besides being tied to the financing giant KKR, where the action will be noticed and awareness will trickle out, the big dog's stress is noticed throughout the pack. Trickle around and down being at play.
So pick the right target to get maximum regulatory impact. Sue big. Which is what Ellison was not afraid to do. Online pages of interest related to the scale of Fleet Farm handgun merchandising:
Page 1 - https://www.fleetfarm.com/category/hunting/firearms/handguns/_/N-3492940777
Ten pages of community risk of death if merchandising is allowed to be trickled out indiscriminately, each sale for a profit. 3 x 9 listings per page, except for page 10 having fewer. That is 27 per page. That is a lot. And money is made selling ammo.
There is more logic to squeezing handgun sales to responsible buyer/users only to curb a profligate spread of illegal weapons held by extremely bad actors posing threat to one another and to the community at large than there is to other possible action. Stopping or at least trimming straw buyer activity is a more effective step, and cheaper than any stop-and-frisk dreams Jim Schultz might hold as policy to try to sell to the gulible among the public. Bigger new prisons to house all those Schultz claims to want to see via a war on crime would be more costly, and less effective than focus on a rational choke point for separating bad guys from valid purchasers.
And this is a civil action. It is not a criminal pursuit of individual bad actors one after another. It is a precise and well thought out pinch on the pulse of handgun leakage into wrong hands. It is the opposite of racist incitement or fear mongering, for votes.
That video was put online by the Schultz campaign. No solutions. Hostile rhetoric. Content challenged.
In order to deconstruct what Schultz is up to from the start: Begin with this seldom viewed minute and a half long Schultz campaign kick-off video put by him onto YouTube Jan 9, 2022. What does he say via the item that is not simply stated, fear-loaded, easy-attack vitriolic rhetoric?
Does he show himself as somehow "the better man for the job" as well as a well grounded knowledge of what the job is?
There are under ten comments to the video on YouTube, with the only one which got a thumbs up saying:
We're still waiting. It is a simple request. Aside from blowing smoke - What's the plan?
Also, what's the motive? What's in it for Jim? Name recognition so when voting is over with Ellison reelected and it is time to move back to private practice, at that point having better prospects than before? Why now? Opportunism after the George Floyd protesting? Like Nixon's "law and order" and "silent majority" posturing after the King assassination riots? Not earlier, nor later after more relevant seasoning for the demands the actual job entails? Seize the moment?
FURTHER: Websearch = fleet farm assault weapon handgun sales initiated when
Timing of decision making facts were not returned, but there is a short reddit thread returned with one entry stating:
I work with the former owners of MFF they get more and more pissed off every time the new company changes another thing they worked so hard to create.
Notice how you said fleet farm and not mills fleet farm, the company is dropping Mills from the name, they stopped advertising AR guns and accessories over a year ago. Before that Mills had a very good store brand made by Adams.
They also did a lot of military surplus and surplus ammo which was dropped under the new company.
The new company fired/demoted almost every store manager and only offer part time jobs now and the sporting goods section has went to shit. The people in stores no nothing about anything, I actually go to gander now.
A Strib April 2018 returned item, in ending noted:
Companies that have made changes to their gun policies do not always make them permanent. After the Sandy Hook shooting in 2012, Dick's halted sales of assault-style rifles but then started selling them at its Field & Stream stores a few months later. When asked on "Good Morning America" at the end of February if the company might later start selling assault-style rifles again, Chief Executive Ed Stack said, "We have eliminated these guns permanently."
Several retailers that sell guns have not made recent changes, including Bloomington-based Gander Outdoors, Cabela's and Bass Pro Shops.
Although the company still uses the name "Mills Fleet Farm" in its advertising, the Mills family no longer has significant involvement or ownership. More than a year ago the Mills family sold the firm to KKR, a New York investment firm, for a reported but unconfirmed $1.2 billion.
That means KKR's buyout was in 2017 for over a billion dollars, while noting that gun outlets can alter policy when major mass shootings happen with old policy later restored. That and the Reddit comment about part time staffing after the KKR takeover together bolster the thrust of the AG's lawsuit aimed against negligent practices, while indicating even a settlement consent decree might need ongoing attention. (The Strib item names other large retail outlets which ought to be expected to pay attention to the present litigation focus on Fleet Farm.)
Discovery in the litigation, if it gets to that, likely would entail profitability of handgun sales vs. profitability of general merchandising, in toto, store by store and over time, and would likely yield informative discovery responses helpful to the AG in overall quelling of straw buyer crime, whether such crime is originating at Fleet Farm outlets or otherwise.
BOTTOM LINE: Filing that lawsuit was a progressive step toward quelling gun-related crime and illegal gun toting criminals. It was experienced measured action. Not hot divisive momentary election-focused rhetoric. It says much about the differing styles of the two Attorney General candidates. Voters should take notice.
FURTHER: The KKR SEC 10k filing is online. For 2021. Many find such filings informative. For 2022, absent a prompt settlement, KKR would have to report the tort suit against its gun sale practices to the SEC as an outstanding legal matter of impact. Absent a prompt settlement, a likelihood exists that plaintiffs' tort lawyers nationwide might take notice with consequent actions filed, possibly class actions, related to handgun crime victims. Victims of handgun crimes where weapons were purchased by straw parties from KKR controlled outlets in Minnesota or elsewhere.
FURTHER: MPR coverage of the AG press conference shows by image a large range of Minnesotans having personal interests or stakes in the filing and its ultimate outcome. Some may be victims already represented by counsel.
Nothing done in campaigning by Schultz should be viewed as having somehow precipitated this filing. It is the responsible statewide official acting to protect Minnesotans, independent of how Schultz campaigns. The question for Schultz is not about causation, but whether Minnesotans, on reflection, could imagine his ever filing such a lawsuit, against a giant of the industry in which he earned his living most recently before deciding to run for office.
Incidentally -
The question of will to take on the likes of private equity giant KKR likewise applies to GOP politician Mike McFadden, who makes his money from private equity, with a mergers and acquisitions background, where KKR stands as an international powerhouse in the areas of commerce from which McFadden has been gaining his livelihood.
McFadden, however, is not on the ballot this cycle. McFadden outside of his job is presently content to serve on the Board of Cristo Rey Jesuit High School while also the co-founder and Board member spearheading OurChildreMN.com, which is figureheaded by fellow Catholic Alan Page, the former Notre Dame and Vikings football standout and former Minnesota Supreme Court Justice, with that entity's declared organic aim and purpose being alteration of Minnesota's Constitution in a way which arguably might ultimately be advanced as favorable toward vouchers.
Vouchers also are being touted by Scott Jensen and suburban Catholic high school founder Matt Birk, while the focal person of major parts of this post, the GOP's anti-abortion candidate Jim Schultz, who "lives with his wife and three kids in the west metro and attends Holy Family Catholic Church in St. Louis Park" seems not to presently care to be on record anywhere online as to education policy, of any kind in any direction; as if affirmatively hiding from taking an unpopular stand on vouchers.
What is clear, Schultz hides from issues when his finger to the wind suggests it wise.
The man hides by scrubbing his campaign website. Specifically, his present Issues campaign webpage:
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The Schultz campaign "ISSUES" webpage as first archived Feb. 17, 2022, by Internet Archive's Wayback Machine:
Compare and contrast. You may need to click each image to enlarge and read.
Yes. He cut weak GOP candidate Kim Crockett loose with no lifeboat. It seemed appropriate to the campaign, apparently. Election posturing, from issue to non-issue.
Integrity? You decide.
Jeff Thiemann
8 months ago