KEY POINTS:
When it came, the end was brutal and quick. On September 25, Topps Meat Co, the largest manufacturer of frozen hamburgers in the United States, recalled 150,000kg of frozen ground beef. A month earlier a handful of people had fallen ill, some hospitalised, suffering from diarrhoea and dehydration - symptoms linked to the e.coli virus.
Topps was undeniably in a perilous financial position after the recall.
But some question how it came to fold so quickly.
To union leaders, the fact that Topps was jointly owned by two private equity firms ensured its death was quick and clinical.
To them, such instant collapse raises questions not just about health and safety but the ability of private equity firms to withstand shocks.
Topps' burgers had been identified as a potential source of the outbreak which allegedly spread to 30 people. A week later the New Jersey-based firm expanded the recall to 9.9 million kilograms of ground beef - equivalent to its entire US$90 million ($118.5 million) annual sales.
The recall meant that after 67 years in business, Topps closed down with immediate effect.
In a subsequent analysis of the collapse, the New York Times reported "the [US] government determined that the company reduced its testing of ground beef and neglected other safety measures in the months before the recall".
And the summer e.coli outbreak was by no means the first time the firm had health and safety issues.
Prior to its demise, the firm was worth US$31 million. "In one week, we have gone from the largest US manufacturer of frozen hamburgers to a company that cannot overcome the economic reality of a recall this large," said Anthony D'Urso, Topps' chief operating officer.
And there are other shocks coming. The global economy is teetering, with the US sub-prime banking crisis spreading like an infection. Banks are scaling back credit. Next year's forecasts are gloomy. The cost of corporate debt is well over base interest rates - an indication that the market is shying away from risk and that growth will be compromised.
Loans made by banks to fund buyouts earlier this year are now worth well below their value on financial markets. In Europe, bankers are sitting on US$116 billion worth of bank debt which they cannot sell down to other banks at a profit.
The situation is a recipe for disaster. Some are suggesting there is a very real chance that the circumstances which predicated a burnout of the leveraged buyout sector in America during the late 1980s are about to repeat themselves 20 years later.
Only this time the buyout sector has made such rapid incursions that the implications for the economy and workers could be more severe.
Last week, in Paris, the masters of the private equity world met at the annual Super Investor conference. The six previous events had been a gaudy celebration of how far and how fast the industry had come.
Soaring above the clouds, tycoons including Damon Buffini, Guy Hands and Stephen Schwarzman of Blackstone Group transformed the corporate landscape with debt-fuelled deals.
This year was different. The new chief executive of the British Venture Capital Association, Simon Walker, admitted the mood was "cautious".
"The era of easy credit is over. People are cautious. Having said that, there are always opportunities around," he said. Opportunities for distressed purchases, perhaps. Guy Hands, one of the most aggressive deal-makers around, fed the idea that an industry was crashing to earth.
In a speech to some of the most sophisticated investors on the planet, Hands said the era of the large buyout was at an end and that there might be casualties. "I don't think this is a blip ... this will spill into the broader market," he said. Hands suggested there would inevitably be opportunities for buyers of distressed companies that had borrowed too much.
Nervousness is tangible. Senior executives at US banks suggested that businesses which have borrowed greatly on the back of property assets could be vulnerable.
"Expect a lot of housing and construction deals to go into distress shortly," said one senior insider. Others believe retailers are under severe pressure.
Banks that have funded takeovers, such as the one that saw Bridgepoint Capital led by William Jackson acquire Fat Face, are having serious difficulties selling the debt.
Only last week, Blackstone Group, manager of the world's biggest leveraged buyout fund, reported third-quarter profits that missed analysts' estimates as real estate fees fell, sending its shares down more steeply than at any time since it went public in June: Blackstone shares have fared terribly ever since flotation.
On this basis, Foxtons, the largest London estate agent which was sold last May for £390 million ($105 million) to BC Partners, needs to be watched closely.
While the super-rich were in Paris, high-level supranational union leaders and legislators from Britain, Germany and the US met in secret - ironically to ensure that measures to tame buyout kings are placed at the heart of the international agenda.
Unions have watched aghast in recent years as wages have been cut, hours extended and workers have been laid off in what has been the most voracious tide of corporate takeovers ever seen.
Union leaders are up in arms at the way in which private equity is allowed to obtain tax relief on the debt it uses to fund takeovers, hold investments offshore to escape tax, and operate in secrecy.
"As much as US$725 billion was spent on buyouts in 2006, yet no one can give an estimate for the total amount of outstanding global leveraged buyout [LBO] debt, or tell us who holds the securities, or in what form," said Peter Rossman of the International Union of Food, Farm and Hotel Workers, who was in Paris. "A default in the market for LBO debt could just as easily have been the trigger for the meltdown in global credit markets as the collapse of sub-prime markets, yet no central bank is willing to report regularly on their members' risks stemming from LBO exposure.
The sub-prime crisis was supposed to be limited to North America - look what happened. Global action is certainly needed, but complacency still rules.
Maybe complacency is misguided. Angela Merkel, the German Chancellor, did attempt to place what some are referring to as the "financialisation" of business on to the agenda of the recent G8 meeting she hosted.
The move was blocked by the United States and Britain.
In such a febrile environment, even the performance of a sector that never puts a foot wrong has come under the microscope. UK gambling company insiders say that Europe's biggest gaming firm, Gala Coral, is failing to reach performance targets set by its private equity owners.
Gala is Britain's biggest bingo operator but in recent months the game has been hit by the smoking ban.
For Permira, which bought into a highly leveraged business 18 months ago, the situation has created major difficulties.
Gala says there is nothing to worry about. "Our financial backers don't impose targets, management does.
"We have been and are currently trading fully in line with expectations and the last few months have seen promising signs in the business."
This week in London, City grandee Sir David Walker will demand that the private equity industry report on its companies' performance and prospects.
Walker will announce the conclusions of a longstanding private equity investigation into issues of trans- parency.
The question is, will buyout kings be prepared to admit that the deals they cooked in the good times may be about to unwind?
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