Asset Stripping

Asset stripping is a term used in the finance racket, one with a virtue; its meaning is very clear. A firm can have a lot of assets lying round unnoticed: its reputation, patents, good will, a pension fund. The latter is one prone to be worth megabucks. Taking controlling of it is relatively straightforward. Pushy lawyers, a sleepy judge and lotsa money goes walkies. If the Financial Engineers get it right, all will have been sub rosa, secret, a done deal before the workers or unions realized they were being robbed. Another approach is Sale And Leaseback; convert the assets into cash then siphon them off through an offshore entity based in the Turks and Caicos Islands or similar jurisdiction. It worked for the rogues that took Southern Cross for megabucks. It made others envious.

The Wiki accuses people of this kind of fraud, include Russia and China but manages to ignore Her Majesty's Government's whole hearted complicity, selling off the taxpayers' property in order to steal or waste the billions it made

Asset Stripping ex Wiki
Asset stripping is a method in which a company or an individual, known as a corporate raider, attains control of another company, and then auctions off the acquired company's assets. The sold assets are often used to repay the debt of the corporate raider, which may have been increased due to the acquisition.[1] The process of asset stripping is utilised by corporate raiders in order to repay the debts they may have, whilst increasing their net worth. A company that may become susceptible to asset stripping is a company whose individual assets are worth more than its collective net worth.

The term is generally used in a pejorative sense as such activity is not considered productive to the economy. Asset stripping is considered to be a problem in economies such as Russia or China that are making a transition to the market. In these situations, managers of a state-owned company have been known to sell the assets which they control, leaving behind nothing but debts to the state.


Sale And Leaseback ex Wiki
Leaseback, short for sale-and-leaseback, is a financial transaction, where one sells an asset and leases it back for the long-term; therefore, one continues to be able to use the asset but no longer owns it. The transaction is generally done for fixed assets, notably real estate and planes, trains and automobiles, and the purposes are varied, including financing, accounting, and taxing.
The Wiki makes heavy weather of this one. Perhaps the writer is not very competent or is trying to obscure the truth. Sale-and-leaseback converts assets into cash which can then be used, moved, stolen, whatever. It makes sense in the short to medium term. Eventually the rent outweighs other advantages.