Cerberus Capital Management
Encyclopedia
Cerberus Capital Management, L.P. is one of the largest private equity
investment firms in the United States
. The firm is based in New York City
, and run by -year-old financier Steve Feinberg
. Former U.S. Vice President Dan Quayle
has been a prominent Cerberus spokesperson and runs one of its international units.
The firm's headquarters are located at 299 Park Avenue
in New York City
.
is named for the mythological
three-headed dog
that guarded the gates of Hades
. Feinberg has stated to his employees that while the Cerberus name seemed like a good idea at the time, he later regretted naming the company after the mythological dog.
The company has been a very active acquirer of businesses over the past several years and now has sizable investments in automotive, sportswear, paper products, military services, real estate, energy, retail, glassmaking, transportation, and building products. In 2006, its holdings amounted to $24 billion.
On October 19, 2006, John W. Snow
, President
George W. Bush
's second Treasury Secretary
, was named chairman of Cerberus.
J. Ezra Merkin
is a partner in Cerberus. Merkin invested his funds into Cerberus and its portfolio companies. His Gabriel fund invested $79 million in Chrysler, $66 million in GMAC and $67 million in Cerberus partnerships, according to year-end statements. The Gabriel Fund was a feeder fund
for Bernard L. Madoff Investment Securities LLC.
The Japanese bank, Aozora
, a Cerberus company lost $137 million to Bernard L. Madoff Investment Securities LLC. Aozora was part of the investment group that acquired 51 percent of GMAC from General Motors
.
On April 12, 2010 Cerberus acquired DynCorp International
, a private military contractor.
for $7.4 billion, promising to bolster the auto maker’s performance by operating as an independent company. In 2008, the plan collapsed due to an unprecedented slowdown in the U.S. auto industry and a lack of capital. In response to questioning at a hearing before the House committee on December 5, 2008 by Rep. Ginny Brown-Waite
, Chrysler President and CEO Robert Nardelli
said that Cerberus' fiduciary obligations to its other investors and investments prohibited it from injecting capital.
On March 30, 2009, it was announced that Cerberus Capital Management would lose its equity stake and ownership in Chrysler as a condition of the Treasury Department’s bailout deal, but Cerberus would maintain a controlling stake in Chrysler’s financing arm, Chrysler Financial. Cerberus would utilize the first $2 billion in proceeds from its Chrysler Financial holding to backstop a $4 billion December 2008 Treasury Department loan given to Chrysler. In exchange for obtaining that loan, it promised many concessions including surrendering equity, foregoing profits, and giving up board seats:
Chrysler Financial refused to take $750 million in Troubled Asset Relief Program (TARP) government bailout aid because executives didn't want to abide by executive-pay limits, and because the firm doesn't necessarily need the money. In January 2009, Chrysler Financial was the recipient of $1.5 billion from the Troubled Asset Relief Program. The company said that it used the money to fund 85,000 loans to purchase Chrysler automobiles. Chrysler Financial repaid the TARP loan in July 2009 by raising funds from an asset-backed securitization through the Term Asset-Backed Securities Loan Facility
program.
On April 30, 2009, Chrysler declared bankruptcy protection and announced that GMAC will become the financing source for new wholesale and retail Chrysler cars.
Chrysler Financial, once the exclusive lending arm of the storied automaker, remained owned by Cerberus until December 2010, when Toronto-Dominion Bank
announced that it would acquire Chrysler Financial for $6.3 billion.
' finance arm, in 2006 for $7.4 billion. It appointed Merkin as nonexecutive Chairman.
As of October 15, 2008, GMAC had $173 billion of debt against $140 billion of income-producing assets (loans and leases), some which are almost worthless, in addition to GMAC Bank’s $17 billion in deposits (a liability). Even if GMAC liquidated the loans and leases, it could not pay back all of its debt.
On December 10, 2008, GMAC said, "GMAC LLC, the auto and home lender seeking federal aid, hasn’t obtained enough capital to become a bank holding company and may abandon the effort, casting new doubt on the firm’s ability to survive. A $38 billion debt exchange by GMAC and its Residential Capital LLC mortgage unit to reduce the company's outstanding debt and raise capital hasn’t attracted enough participation." This was due in part because Cerberus had raised the credit requirements for car loans so high, virtually eliminating leasing, that they have been responsible for a sizable chunk of lost sales at GM due to customers inability to secure financing, in order to pressure GM into selling or trading their remaining stake in GMAC.
GM stands to write-off over a billion dollars in lost residuals – which they paid up front to GMAC. GMAC's exposure to the gap in residual values is around $3.5 billion.
In December 2008, Cerberus subsequently informed GMAC’s bondholders that the financial services company may have to file for bankruptcy
if a bond-exchange plan is not approved. The company had previously said it may fail in its quest to become a bank holding company because it lacks adequate capital.
In January 2009, Merkin resigned from his chairmanship as a condition by the U.S. government. Five days earlier, the Federal Reserve granted GMAC bank holding company status, so it could get access to the bailout money. On December 29, 2008, the U.S. Treasury gave GMAC $5 billion from its $700 billion Troubled Asset Relief Program (TARP). (On May 21, 2009, the U.S. Treasury department announced it would invest an additional $7.5 billion in GMAC, and on December 30, 2009, the U.S. Treasury department said that they would invest another $3.8 billion in GMAC because the company had been unable to raise additional funds in the private sector. This raised the total government investment in GMAC to $16.3 billion.)
Cerberus's investments in Chrysler and GMAC totaled about 7 percent of its assets under management.
At the end of May, 2009, Cerberus scaled back their ownership as a condition of the lender becoming a bank-holding company, when the bulk of GM's existing ownership stake in GMAC was placed into a trust, overseen by a trustee appointed by the Treasury, to be gradually dispersed. Cerberus distributed the majority of its stake in GMAC to its investors. The Federal Deposit Insurance Corporation
(FDIC) gave GMAC access to the Temporary Liquidity Guarantee Program
that allows companies to borrow money at lower interest rates. The initiative was created in October, 2008 to help banks borrow money by promising to repay investors if the banks defaulted. The U.S. Government also waived a rule that would restrict the amount of loans that GMAC could make to Chrysler's customers and dealers because both firms are owned in part by Cerberus Capital Management.
, the world's largest equipment rental company and traded on the NYSE
. After the credit markets began to tighten in August, Cerberus attempted to reduce the deal price. United Rentals refused to reprice the deal, and in November sued in the Delaware Court of Chancery
for specific performance
(i.e., a court mandate that Cerberus complete the deal). Cerberus took the position that the deal agreements capped its liability for walking away from the deal at $100 million. After a two-day trial, Delaware Chancellor William B. Chandler, III
ruled for Cerberus in a closely watched decision, allowing it to pay United Rentals the agreed-upon $100 million "reverse termination fee" and terminate the merger agreement.
Private equity
Private equity, in finance, is an asset class consisting of equity securities in operating companies that are not publicly traded on a stock exchange....
investment firms in the United States
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...
. The firm is based in New York City
New York City
New York is the most populous city in the United States and the center of the New York Metropolitan Area, one of the most populous metropolitan areas in the world. New York exerts a significant impact upon global commerce, finance, media, art, fashion, research, technology, education, and...
, and run by -year-old financier Steve Feinberg
Steve Feinberg
Stephen A. Feinberg is an American businessman active in the field of private equity. He is the founder and head of Cerberus Capital Management.-Early life:...
. Former U.S. Vice President Dan Quayle
Dan Quayle
James Danforth "Dan" Quayle served as the 44th Vice President of the United States, serving with President George H. W. Bush . He served as a U.S. Representative and U.S. Senator from the state of Indiana....
has been a prominent Cerberus spokesperson and runs one of its international units.
The firm's headquarters are located at 299 Park Avenue
299 Park Avenue
299 Park Avenue is an office building in New York City located on Park Avenue between 48th and 49th streets. The building is home to the New York headquarters of UBS Investment Bank which occupies approximately two-thirds of the floors as well as MeadWestvaco and GE Capital; private equity firms...
in New York City
New York City
New York is the most populous city in the United States and the center of the New York Metropolitan Area, one of the most populous metropolitan areas in the world. New York exerts a significant impact upon global commerce, finance, media, art, fashion, research, technology, education, and...
.
History
Founded in 1992, CerberusCerberus
Cerberus , or Kerberos, in Greek and Roman mythology, is a multi-headed hound which guards the gates of the Underworld, to prevent those who have crossed the river Styx from ever escaping...
is named for the mythological
Greek mythology
Greek mythology is the body of myths and legends belonging to the ancient Greeks, concerning their gods and heroes, the nature of the world, and the origins and significance of their own cult and ritual practices. They were a part of religion in ancient Greece...
three-headed dog
Cerberus
Cerberus , or Kerberos, in Greek and Roman mythology, is a multi-headed hound which guards the gates of the Underworld, to prevent those who have crossed the river Styx from ever escaping...
that guarded the gates of Hades
Hades
Hades , Hadēs, originally , Haidēs or , Aidēs , meaning "the unseen") was the ancient Greek god of the underworld. The genitive , Haidou, was an elision to denote locality: "[the house/dominion] of Hades". Eventually, the nominative came to designate the abode of the dead.In Greek mythology, Hades...
. Feinberg has stated to his employees that while the Cerberus name seemed like a good idea at the time, he later regretted naming the company after the mythological dog.
The company has been a very active acquirer of businesses over the past several years and now has sizable investments in automotive, sportswear, paper products, military services, real estate, energy, retail, glassmaking, transportation, and building products. In 2006, its holdings amounted to $24 billion.
On October 19, 2006, John W. Snow
John W. Snow
| image=John W. Snow.jpg|imagesize = 250px| order=73rd| title=United States Secretary of the Treasury| term_start=February 3, 2003| term_end=June 28, 2006| predecessor=Paul O'Neill| successor=Henry Paulson| birth_date=| birth_place=Toledo, Ohio...
, President
President of the United States
The President of the United States of America is the head of state and head of government of the United States. The president leads the executive branch of the federal government and is the commander-in-chief of the United States Armed Forces....
George W. Bush
George W. Bush
George Walker Bush is an American politician who served as the 43rd President of the United States, from 2001 to 2009. Before that, he was the 46th Governor of Texas, having served from 1995 to 2000....
's second Treasury Secretary
United States Secretary of the Treasury
The Secretary of the Treasury of the United States is the head of the United States Department of the Treasury, which is concerned with financial and monetary matters, and, until 2003, also with some issues of national security and defense. This position in the Federal Government of the United...
, was named chairman of Cerberus.
J. Ezra Merkin
J. Ezra Merkin
Jacob Ezra Merkin is a former money manager and financier. He was a close business associate of Bernard Madoff, and is alleged to have played a significant part in the Madoff fraud. He served as the Non-executive Chairman of GMAC until his resignation on January 9, 2009, at the insistence of the...
is a partner in Cerberus. Merkin invested his funds into Cerberus and its portfolio companies. His Gabriel fund invested $79 million in Chrysler, $66 million in GMAC and $67 million in Cerberus partnerships, according to year-end statements. The Gabriel Fund was a feeder fund
Feeder fund
A feeder fund is an investment fund which does almost all of its investments through a master fund via a master-feeder relationship.It is a situation similar to a fund of funds, except that the master fund performs all the investments....
for Bernard L. Madoff Investment Securities LLC.
The Japanese bank, Aozora
Aozora Bank
is a Japanese commercial bank that offers service in 19 branches in Japan and in 5 overseas representative offices.-History:Aozora Bank is the successor of the Nippon Credit Bank , which was founded in 1957 under a special government trust banking license alongside the Long-Term Credit Bank of...
, a Cerberus company lost $137 million to Bernard L. Madoff Investment Securities LLC. Aozora was part of the investment group that acquired 51 percent of GMAC from General Motors
General Motors
General Motors Company , commonly known as GM, formerly incorporated as General Motors Corporation, is an American multinational automotive corporation headquartered in Detroit, Michigan and the world's second-largest automaker in 2010...
.
On April 12, 2010 Cerberus acquired DynCorp International
DynCorp International
DynCorp International is a United States-based private military contractor. Begun as an aviation company, the company now also provides air operations support, training and mentoring, international development, intelligence training and support, contingency operations, security, and operations and...
, a private military contractor.
Chrysler
In 2007, Cerberus and about 100 other investors purchased an 80% stake in ChryslerChrysler
Chrysler Group LLC is a multinational automaker headquartered in Auburn Hills, Michigan, USA. Chrysler was first organized as the Chrysler Corporation in 1925....
for $7.4 billion, promising to bolster the auto maker’s performance by operating as an independent company. In 2008, the plan collapsed due to an unprecedented slowdown in the U.S. auto industry and a lack of capital. In response to questioning at a hearing before the House committee on December 5, 2008 by Rep. Ginny Brown-Waite
Ginny Brown-Waite
Virginia "Ginny" Brown-Waite is the former U.S. Representative for , serving from 2003 until 2011. She is a member of the Republican Party....
, Chrysler President and CEO Robert Nardelli
Robert Nardelli
Robert Louis "Bob" Nardelli was the chairman and chief executive officer of Chrysler. He had earlier served in a similar capacity at The Home Depot from December 2000 to January 2007. Prior to that, Nardelli had risen to become one of the top four executives at General Electric...
said that Cerberus' fiduciary obligations to its other investors and investments prohibited it from injecting capital.
On March 30, 2009, it was announced that Cerberus Capital Management would lose its equity stake and ownership in Chrysler as a condition of the Treasury Department’s bailout deal, but Cerberus would maintain a controlling stake in Chrysler’s financing arm, Chrysler Financial. Cerberus would utilize the first $2 billion in proceeds from its Chrysler Financial holding to backstop a $4 billion December 2008 Treasury Department loan given to Chrysler. In exchange for obtaining that loan, it promised many concessions including surrendering equity, foregoing profits, and giving up board seats:
"In order to achieve that goal Cerberus has advised the Treasury that it would contribute its equity in Chrysler automotive to labor and creditors as currency to facilitate the accommodations necessary to affect [sic] the restructuring."
Chrysler Financial refused to take $750 million in Troubled Asset Relief Program (TARP) government bailout aid because executives didn't want to abide by executive-pay limits, and because the firm doesn't necessarily need the money. In January 2009, Chrysler Financial was the recipient of $1.5 billion from the Troubled Asset Relief Program. The company said that it used the money to fund 85,000 loans to purchase Chrysler automobiles. Chrysler Financial repaid the TARP loan in July 2009 by raising funds from an asset-backed securitization through the Term Asset-Backed Securities Loan Facility
Term Asset-Backed Securities Loan Facility
The Term Asset-Backed Securities Loan Facility is a program created by the U.S. Federal Reserve to spur consumer credit lending. The program was announced on November 25, 2008 and was to support the issuance of asset-backed securities collateralized by student loans, auto loans, credit card...
program.
On April 30, 2009, Chrysler declared bankruptcy protection and announced that GMAC will become the financing source for new wholesale and retail Chrysler cars.
Chrysler Financial, once the exclusive lending arm of the storied automaker, remained owned by Cerberus until December 2010, when Toronto-Dominion Bank
Toronto-Dominion Bank
The Toronto-Dominion Bank , is the second-largest bank in Canada by market capitalization and based on assets. It is also the sixth largest bank in North America. Commonly known as TD and operating as TD Bank Group, the bank was created in 1955 through the merger of the Bank of Toronto and the...
announced that it would acquire Chrysler Financial for $6.3 billion.
GMAC
Cerberus acquired 51 percent of GMAC, General MotorsGeneral Motors
General Motors Company , commonly known as GM, formerly incorporated as General Motors Corporation, is an American multinational automotive corporation headquartered in Detroit, Michigan and the world's second-largest automaker in 2010...
' finance arm, in 2006 for $7.4 billion. It appointed Merkin as nonexecutive Chairman.
As of October 15, 2008, GMAC had $173 billion of debt against $140 billion of income-producing assets (loans and leases), some which are almost worthless, in addition to GMAC Bank’s $17 billion in deposits (a liability). Even if GMAC liquidated the loans and leases, it could not pay back all of its debt.
On December 10, 2008, GMAC said, "GMAC LLC, the auto and home lender seeking federal aid, hasn’t obtained enough capital to become a bank holding company and may abandon the effort, casting new doubt on the firm’s ability to survive. A $38 billion debt exchange by GMAC and its Residential Capital LLC mortgage unit to reduce the company's outstanding debt and raise capital hasn’t attracted enough participation." This was due in part because Cerberus had raised the credit requirements for car loans so high, virtually eliminating leasing, that they have been responsible for a sizable chunk of lost sales at GM due to customers inability to secure financing, in order to pressure GM into selling or trading their remaining stake in GMAC.
GM stands to write-off over a billion dollars in lost residuals – which they paid up front to GMAC. GMAC's exposure to the gap in residual values is around $3.5 billion.
In December 2008, Cerberus subsequently informed GMAC’s bondholders that the financial services company may have to file for bankruptcy
Bankruptcy
Bankruptcy is a legal status of an insolvent person or an organisation, that is, one that cannot repay the debts owed to creditors. In most jurisdictions bankruptcy is imposed by a court order, often initiated by the debtor....
if a bond-exchange plan is not approved. The company had previously said it may fail in its quest to become a bank holding company because it lacks adequate capital.
In January 2009, Merkin resigned from his chairmanship as a condition by the U.S. government. Five days earlier, the Federal Reserve granted GMAC bank holding company status, so it could get access to the bailout money. On December 29, 2008, the U.S. Treasury gave GMAC $5 billion from its $700 billion Troubled Asset Relief Program (TARP). (On May 21, 2009, the U.S. Treasury department announced it would invest an additional $7.5 billion in GMAC, and on December 30, 2009, the U.S. Treasury department said that they would invest another $3.8 billion in GMAC because the company had been unable to raise additional funds in the private sector. This raised the total government investment in GMAC to $16.3 billion.)
Cerberus's investments in Chrysler and GMAC totaled about 7 percent of its assets under management.
At the end of May, 2009, Cerberus scaled back their ownership as a condition of the lender becoming a bank-holding company, when the bulk of GM's existing ownership stake in GMAC was placed into a trust, overseen by a trustee appointed by the Treasury, to be gradually dispersed. Cerberus distributed the majority of its stake in GMAC to its investors. The Federal Deposit Insurance Corporation
Federal Deposit Insurance Corporation
The Federal Deposit Insurance Corporation is a United States government corporation created by the Glass–Steagall Act of 1933. It provides deposit insurance, which guarantees the safety of deposits in member banks, currently up to $250,000 per depositor per bank. , the FDIC insures deposits at...
(FDIC) gave GMAC access to the Temporary Liquidity Guarantee Program
Temporary Liquidity Guarantee Program
The Temporary Liquidity Guarantee Program is a program adopted by the Federal Deposit Insurance Corporation on October 13, 2008 during the Global financial crisis of 2008 to encourage liquidity in the interbank lending market....
that allows companies to borrow money at lower interest rates. The initiative was created in October, 2008 to help banks borrow money by promising to repay investors if the banks defaulted. The U.S. Government also waived a rule that would restrict the amount of loans that GMAC could make to Chrysler's customers and dealers because both firms are owned in part by Cerberus Capital Management.
Broken deal for United Rentals
In the summer of 2007, Cerberus agreed to buy 100% of United RentalsUnited Rentals
Founded in 1997 by Bradley S. Jacobs and seven others, United Rentals, Inc. is the largest equipment rental company in the world, with more than 600 rental locations throughout the United States, Canada, and Mexico. Their diverse customer base includes construction and industrial companies,...
, the world's largest equipment rental company and traded on the NYSE
New York Stock Exchange
The New York Stock Exchange is a stock exchange located at 11 Wall Street in Lower Manhattan, New York City, USA. It is by far the world's largest stock exchange by market capitalization of its listed companies at 13.39 trillion as of Dec 2010...
. After the credit markets began to tighten in August, Cerberus attempted to reduce the deal price. United Rentals refused to reprice the deal, and in November sued in the Delaware Court of Chancery
Delaware Court of Chancery
The Delaware Court of Chancery is a court of equity in the American state of Delaware. It is one of Delaware's three constitutional courts, along with the Supreme Court and Superior Court.-Jurisdiction:...
for specific performance
Specific performance
Specific performance is an order of a court which requires a party to perform a specific act, usually what is stated in a contract. It is an alternative to award/ for awarding damages, and is classed as an equitable remedy commonly used in the form of injunctive relief concerning confidential...
(i.e., a court mandate that Cerberus complete the deal). Cerberus took the position that the deal agreements capped its liability for walking away from the deal at $100 million. After a two-day trial, Delaware Chancellor William B. Chandler, III
William B. Chandler, III
William B. Chandler III is a former judge in the U.S. state of Delaware. He served on the Delaware Court of Chancery with the title of Chancellor....
ruled for Cerberus in a closely watched decision, allowing it to pay United Rentals the agreed-upon $100 million "reverse termination fee" and terminate the merger agreement.
Notable acquisitions
- Pharmaceuticals — In December 2004, the company announced the acquisition of BayerBayerBayer AG is a chemical and pharmaceutical company founded in Barmen , Germany in 1863. It is headquartered in Leverkusen, North Rhine-Westphalia, Germany and well known for its original brand of aspirin.-History:...
's plasmaBlood plasmaBlood plasma is the straw-colored liquid component of blood in which the blood cells in whole blood are normally suspended. It makes up about 55% of the total blood volume. It is the intravascular fluid part of extracellular fluid...
products business and renamed it Talecris Biotherapeutics. It purchased Talecris for $83m, and sold the bulk of its shares in October 2009, for a net gain of $1.8bn.
- Paper products — The company acquired MeadWestvaco's paper business for $2.3B in 2005 and renamed it NewPage. Cerberus also purchased, from Georgia Pacific Corporation, its Distribution Division/Building Products and all of its associated real estate. It renamed this new company BlueLinx HoldingsBlueLinx HoldingsBlueLinx Holdings is a Fortune 1000 company based in Atlanta, Georgia. It is the largest building products wholesaler in the country.History...
, based in AtlantaAtlanta, GeorgiaAtlanta is the capital and most populous city in the U.S. state of Georgia. According to the 2010 census, Atlanta's population is 420,003. Atlanta is the cultural and economic center of the Atlanta metropolitan area, which is home to 5,268,860 people and is the ninth largest metropolitan area in...
.
- Government Services (Military, Energy, and Food & Drug) — owns IAP Worldwide Services, which bought Johnson ControlsJohnson ControlsJohnson Controls, Inc. is a company, based in Milwaukee, Wisconsin, USA. It was founded in 1885 by professor Warren S. Johnson, inventor of the first electric room thermostat....
' World Services division in February 2005. Previously owned Multimax (purchased predecessor company in 2000 and Multimax in 2006; sold entire holding in 2007 to Harris CorporationHarris CorporationHarris Corporation is a Florida-based international communications equipment company that produces wireless equipment, electronic systems, and both terrestrial and spaceborne antennas for use in the government, defense, and commercial sectors. It is also the largest private-sector employer in...
). The company is also completing acquisition of the private military contractor DynCorp InternationalDynCorp InternationalDynCorp International is a United States-based private military contractor. Begun as an aviation company, the company now also provides air operations support, training and mentoring, international development, intelligence training and support, contingency operations, security, and operations and...
.
- Real Estate — Through investment affiliate Cerberus Real Estate, the company has been making direct equity, mezzanine, first mortgage, distressed and special situation investments in all asset types. It also controls Miami BeachMiami Beach, FloridaMiami Beach is a coastal resort city in Miami-Dade County, Florida, United States, incorporated on March 26, 1915. The municipality is located on a barrier island between the Atlantic Ocean and Biscayne Bay, the latter which separates the Beach from Miami city proper...
-based LNR Property, a large real estate development and investment firm through subsidiary Riley Property. Cerberus also controls Kyo-ya, a Japan based group of entities that owns several StarwoodStarwoodStarwood may refer to:* Starwood Hotels & Resorts Worldwide* Starwood Amphitheatre* Starwood Club of Los Angeles, California* Starwood Festival...
managed assets in California, Hawaii and Florida. In 2010, LNR Property was charged with fraud in a lawsuit regarding the sale and purchase of property known as Newhall Ranch. The Newhall Land and Farming CompanyNewhall Land and Farming CompanyThe Newhall Land and Farming Company is a land management company based in Valencia, California, United States. The company is responsible for the master community planning of Valencia, as well as the management of farm land elsewhere in the state...
was acquired by Lennar CorporationLennar CorporationLennar Corporation is a Fortune 500 company based in Miami, Florida, United States, in the Fountainbleau area. It was founded in 1954.In 2008, Lennar was the United States' second largest homebuilder, constructing homes in 17 different states throughout the United States, including Arizona,...
and LNR Property, through a holding company, LandSource Communities Development LLC. Interests in LandSource were sold to CalPERSCalPERSThe California Public Employees' Retirement System or CalPERS is an agency in the California executive branch that "manages pension and health benefits for more than 1.6 million California public employees, retirees, and their families"...
and others, and the developer later declared bankruptcy. Landsource Creditor Litigation Liquidating Trust has now brought suit in bankruptcy court claiming that the transactions were fraudulent.
- Retail — Cerberus purchased 655 of the 2,500 Albertson's, Inc., grocery stores, forming Albertsons LLCAlbertsons LLCAlbertsons LLC is a North American grocery company based in Boise, Idaho, with over 240 supermarkets located in Arizona, New Mexico, Colorado, Texas, Louisiana, Arkansas, and Florida under the Albertson's and Super Saver Foods banners...
of Boise, IdahoBoise, IdahoBoise is the capital and most populous city of the U.S. state of Idaho, as well as the county seat of Ada County. Located on the Boise River, it anchors the Boise City-Nampa metropolitan area and is the largest city between Salt Lake City, Utah and Portland, Oregon.As of the 2010 Census Bureau,...
, in June 2006. They also had an ownership stake in the now-bankrupt Mervyn's department stores, which was acquired from Target Corp. In June 2007, Cerberus acquired Torex Retail Plc., a retail solutions provider in troubled waters, for approximately 400 million US dollars.
- Transportation — Acquired bankrupt ANC RentalANC RentalANC Rental Corporation was a Delaware corporation, created in October 1999 by AutoNation, Inc. as a wholly owned subsidiary.The company owned Alamo Rent A Car, National Car Rental, CarTemps and was a 2000 AutoNation spin-off to its shareholders, made public on July 3, 2000...
, then owner of the NationalNational Car RentalNational Car Rental is a rental car company based in Clayton, Missouri. National was founded by 24 independent rental car agents on August 27, 1947...
and AlamoAlamo Rent A CarAlamo Rent a Car is the third-largest car rental agency in the United States. Based in Clayton, Missouri, it has branches across the United States, Canada, Mexico, Central America, South America, parts of Africa, Europe, and Australia, and various Caribbean islands...
car rental chains, for $230 million in October 2003 and purchased DaimlerChryslerDaimlerChryslerDaimler AG is a German car corporation. By unit sales, it is the thirteenth-largest car manufacturer and second-largest truck manufacturer in the world. In addition to automobiles, Daimler manufactures buses and provides financial services through its Daimler Financial Services arm...
's 45% share of debis AerFinance, an aircraft leasing business, in May 2005. Complete acquisition of debis AirFinance (later renamed AerCap) was concluded in July 2005. Also acquired North American Bus IndustriesNorth American Bus IndustriesNorth American Bus Industries, commonly known as NABI, is a major transit bus manufacturing company based in Anniston, Alabama. NABI was founded in 1992 when the Hungarian firm Ikarus Bus, a key bus supplier to Central, Eastern Europe, spun off a majority share of their American operations to...
, Optima Bus CorporationOptima Bus CorporationOptima Bus, LLC, formerly Chance Coach Inc., is a brand of small transit buses manufactured by North American Bus Industries. It was established in 1976 in Wichita, Kansas....
, and Blue Bird Corp.Blue Bird Corp.The Blue Bird Corporation, originally known as the Blue Bird Body Company, is an American manufacturer of school and activity buses. Established in 1932, the company has also manufactured transit buses, motorhomes, and specialty vehicles such as mobile libraries and mobile police command centers...
in the busBusA bus is a road vehicle designed to carry passengers. Buses can have a capacity as high as 300 passengers. The most common type of bus is the single-decker bus, with larger loads carried by double-decker buses and articulated buses, and smaller loads carried by midibuses and minibuses; coaches are...
manufacturing sector.
- Automotive — PeguformPeguformPeguform GmbH is an automotive manufacturer headquartered in Bötzingen /Germany near Freiburg im Breisgau.Peguform is a manufacturer of plastic components for car and truck application.The corporation has worldwide about 6500 employees....
, GDX Automotive, and ChryslerChryslerChrysler Group LLC is a multinational automaker headquartered in Auburn Hills, Michigan, USA. Chrysler was first organized as the Chrysler Corporation in 1925....
.
- Staffing Services — Radia International, whose operating branches include Technical Aid Corp, Talent Tree Inc, Willstaff Inc, Advantage, Holland Group, Advantage Professional and Technical Aid Corp Europe Ltd.
- Financial Services — General MotorsGeneral MotorsGeneral Motors Company , commonly known as GM, formerly incorporated as General Motors Corporation, is an American multinational automotive corporation headquartered in Detroit, Michigan and the world's second-largest automaker in 2010...
sold a 51% stake in its GMAC finance unit to an investor group led by Cerberus Capital Management in November 2006. GM expected to receive $14 billion over the next three years from the sale of General Motors Acceptance Corp. In December 2006, Cerberus acquired the Austrian bank BAWAG P.S.K.BAWAG P.S.K.BAWAG P.S.K. Bank für Arbeit und Wirtschaft und Österreichische Postsparkasse Aktiengesellschaft is the fourth largest bank in Austria...
for a reported EUR3.2 billion. In August 2007, Cerberus announced that it was closing one of their mortgage companies, Aegis Mortgage. It owns half of a 9.9 % share (5%) with the Gabriel Group in Bank LeumiBank LeumiBank Leumi is an Israeli bank. It was founded in London as the Anglo Palestine Company on February 27, 1902, by members of the Zionist movement to promote the industry, construction, agriculture, and infrastructure of Palestine.-History:...
, purchased in 2005, but as of April 19, 2009, it was decided to sell in order to boost capital.
- Firearms — Acquired Bushmaster Firearms, Inc., from Windham, MaineWindham, MaineWindham is a town in Cumberland County, Maine, United States. The population was 17,001 at the 2010 census. It includes the villages of South Windham and North Windham...
native Dick Dyke for an undisclosed sum in April 2006, and purchased Remington ArmsRemington ArmsRemington Arms Company, Inc. was founded in 1816 by Eliphalet Remington in Ilion, New York, as E. Remington and Sons. It is the oldest company in the United States which still makes its original product, and is the oldest continuously operating manufacturer in North America. It is the only U.S....
in April 2007. Under Cerberus direction, Bushmaster Firearms acquired Cobb Manufacturing, a well-respected manufacturer of large-caliber tactical rifles in August 2007. Cerberus also acquired DPMS Panther ArmsDPMS Panther ArmsDPMS Panther Arms manufactures a wide range of military and civilian rifles in St. Cloud, Minnesota. The rifles are chambered for the .223 Remington, 5.56x45mm NATO, .308 Winchester, .260 Remington, .300 Remington SA Ultra Mag, 6.8mm Remington SPC, and .204 Ruger cartridges, among others...
December 14, 2007. Remington Arms acquired Marlin Firearms in January 2008. In October 2009, Remington Military products acquired silencer manufacturer Advanced Armament Corporation. These companies were combined into the Freedom GroupFreedom GroupFreedom Group is an American firearms manufacturer holding company which has acquired notable brands such as Bushmaster, DPMS, and Remington Arms.Freedom Group is owned by Cerberus Capital Management, a private equity investment firm.-Companies:...
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- Entertainment — Acquired a group of seven television stations, Four Points Media GroupFour Points Media GroupFour Points Media Group LLC is a television station holding company founded by the private equity firm Cerberus Capital Management in 2007 with its purchase of seven television stations previously owned by CBS Television Stations, a subsidiary of CBS Corporation.Four Points Media Group took over...
, from CBS CorporationCBS CorporationCBS Corporation is an American media conglomerate focused on commercial broadcasting, publishing, billboards and television production, with most of its operations in the United States. The President and CEO of the company is Leslie Moonves. Sumner Redstone, owner of National Amusements, is CBS's...
in 2007. As of September 8, 2011, these stations are in the process of being sold to the Sinclair Broadcast GroupSinclair Broadcast GroupThe Sinclair Broadcast Group is an American telecommunications company that operates the largest number of local television stations in the United States. Headquartered in Hunt Valley, Maryland, it owns a total of 57 stations across the country in 35 primarily small and medium markets, many of...
for $200 million.
- Other holdings of the investment group include the Aozora BankAozora Bankis a Japanese commercial bank that offers service in 19 branches in Japan and in 5 overseas representative offices.-History:Aozora Bank is the successor of the Nippon Credit Bank , which was founded in 1957 under a special government trust banking license alongside the Long-Term Credit Bank of...
in Japan and cable operator Galaxy Cable.
- In 2007, Cerberus took over Corvest a promotional products company based out of Largo, FL with arms based in Simi Vally, Ca & Thorfare, NJ. With this purchase, Cerberus placed over 200 people out of work by closing the New Jersey Toppers & another 100 or so people were put out of work with the closing of the Simi Valley Company.
- In 2007, Cerberus sold a holding in Formica, Inc.Formica (plastic)Formica is a brand of composite materials manufactured by the Formica Corporation now based in Newcastle, Tyne & Wear, a division of the New Zealand company Fletcher Building. In common use, the term refers to the company's classic product, a heat-resistant, wipe-clean, plastic laminate of paper or...
- In 2010, Cerberus was the lead investor that gained an ownership stake in PanavisionPanavisionPanavision is an American motion picture equipment company specializing in cameras and lenses, based in Woodland Hills, California. Formed by Robert Gottschalk as a small partnership to create anamorphic projection lenses during the widescreen boom in the 1950s, Panavision expanded its product...
as part of a debt restructuringDebt restructuringDebt restructuring is a process that allows a private or public company – or a sovereign entity – facing cash flow problems and financial distress, to reduce and renegotiate its delinquent debts in order to improve or restore liquidity and rehabilitate so that it can continue its...
agreement with shareholder MacAndrews & ForbesMacAndrews & Forbes HoldingsMacAndrews & Forbes Holdings, Inc. is the principal holding company used by and wholly owned by businessman and private equity investor, Ronald Perelman...
, the holding company of billionaire Ronald PerelmanRonald PerelmanRonald Owen Perelman is an American business magnate. Through his company MacAndrews & Forbes Holdings Inc., he has invested in various companies in grocery, cigar, licorice, makeup, car, photography, television, camping, security, lottery, jewelry, banks, and comic book industries.-Early...
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- In March 2010, Cerberus agreed to buy New England's largest community-based health-care system Caritas Christi Health CareCaritas Christi Health CareCaritas Christi Health Care was a non-profit Roman Catholic healthcare system in the New England region of the United States. It was established in 1985 and was the second largest healthcare system in New England. In 2010, Caritas Christi was sold to the private equity firm Cerberus Capital...
for $830 million. Caritas Christi will be acquired through newly formed Cerberus affiliate Steward Healthcare System LLC.