As Bankruptcy Insider examined last issue, over nearly four years President Obama has signed certain legislation and promoted certain policies that have had some unintended consequences, with some companies ultimately filing for bankruptcy. And, of course, several government-backed companies have ended up in bankruptcy court, most recently A123 Systems Inc. on Tuesday, Oct. 16.

On the flip side, Republican challenger Mitt Romney has had to deal with allegations the private equity firm he co-founded in 1984, Bain Capital LLC, hurt companies with loads of debt while taking out profits.

Obama has alleged on www.BarackObama.com and a section of www.RomneyEconomics.com that while at Bain, "Romney and his investors made $400 million from four companies that went bankrupt" -- namely, American Pad & Paper Co., Stage Stores Inc., GS Industries Inc. and Dade Behring Holdings Inc.

Romney left Bain in February 1999 to manage production of the 2002 Salt Lake City Winter Olympics. The bankruptcies came between January 2000 and August 2001, but according to reports, Romney retained ownership of 100% of Bain's shares until as late as 2002.

Although Bain Capital declined to answer specific questions for this story, the firm defends its record.

"Despite the distortion that unfortunately accompanies political campaigns, the truth is that fewer than 5% of our companies filed for bankruptcy while under our control," Bain Capital said Tuesday in an e-mailed statement. "We are proud of the extraordinary record of success of our portfolio companies and their management teams, who have grown revenues in more than 80% of the 350 businesses in which we have invested, including many that faced significant headwinds."

Most parties that worked on the four cases that were contacted for this story declined comment or did not return calls. The Private Equity Growth Capital Council, a PE advocacy organization, also did not return calls, but the group in February launched "Private Equity at Work," a website designed to show the positive effects of PE investments.

"There is a real lack of understanding about private equity -- what it does, how it works and who benefits from it," PEGCC president and chief executive Steve Judge said in a Feb. 2 statement. "The headlines have tended to focus on a few unsuccessful investments. This effort focuses on our successes, of which there are many more, and showcases the true value that private equity investment brings to companies, workers, investors and the U.S. economy."

Determining what happened in the four cases in question, without an insider viewpoint, quickly devolves into a particularly strident version of he said, he said.

Take, for example, GS Industries, also known as GST Steel. Bain Capital became the majority shareholder of GS Industries in 1993, according to Romney's website.

In addition to a two-minute ad by the Obama camp on the Charlotte, N.C., steel company, which ran widely in May, www.RomneyEconomics.com posted a six-minute version featuring veteran steelworkers from the company's long-shuttered Kansas City, Mo., plant, which was among the first to close following GST's Feb. 7, 2001, Chapter 11 filing in the U.S. Bankruptcy Court for the Western District of North Carolina in Charlotte.

The Obama video alleged without explanation that Bain Capital loaded the company with $125 million in bond debt, which Bain executives profited from after GS Industries filed for bankruptcy. Steelworkers in the ad alleged that once Bain Capital gained control of GST, its Kansas City mill began having quality issues, job cuts began, and working conditions declined.

Romney countered with an ad, which also ran widely in May, highlighting Bain Capital's involvement in Steel Dynamics Inc. -- now the fifth-largest steel producer in the U.S. with $8 billion in revenue, his website said.

He also has defended his and Bain Capital's work at GST on his website. "GS Industries invested more than $100 million into updates at the Kansas City plant, and by 1997 the company was recording more than $1 billion in annual revenues. Against all odds, GS Industries gave its employees eight more years of employment while competitors continued to shed jobs," the site said.

Romney blamed the decline of GST instead on an American market "flooded" with foreign steel at unsustainably low prices, which forced "more than 30 American steel companies into bankruptcy," including GST.

That the industry was troubled is unquestioned. Enough steel companies were in bankruptcy for famed distressed investor Wilbur L. Ross Jr. of WL Ross & Co. LLC to roll their assets into International Steel Group Inc., later sold to LNM Group in 2004 for $4.5 billion.

According to The Deal Pipeline, a North Carolina judge on June 12, 2003, confirmed GST's liquidation plan. During the bankruptcy proceedings, the debtor sold its assets, and steelworkers' pension, life and health insurance plans were cut. At least one portion of its former assets, later known as Georgetown Steel Co., was back in Chapter 11 by Oct. 21, 2003. Georgetown Steel sold its assets for $18 million in June 2004 -- to International Steel.

Similar claims from the Obama and Romney camps surround the other three cases, with allegations of heaping debt onto healthy companies on the one hand and successful operations brought down by external pressures on the other hand.

In vitro diagnostics product supplier Dade Behring Holdings Inc. was owned by Bain Capital, GS Capital Partners LP and Aventis SA when it filed for Chapter 11 protection on Aug. 1, 2001, with a prepackaged reorganization plan.

"With Dade Behring, Mitt Romney and his investors took over a healthy company and loaded it with debt," www.Romney­Economics.com alleged.

A source involved in the case, however, says the 1994 purchase of what was Dade International Inc. was "a typical leveraged buyout deal." The source frankly terms Obama's accusations "b-------. [Obama's] just trying to muddy the waters."

Romney's website said Bain Capital bought the struggling Deerfield, Ill., division of Baxter International Inc., yes, laid off some workers, and turned it into the third-largest in vitro diagnostic company in the world and the largest in the U.S.

The source describes Bain's management team as "stellar." The team, the source says, now runs Six Flags Inc. and is responsible for increasing the value of the theme park company since it emerged from bankruptcy protection on April 30, 2010.

Dade Behring defaulted on its bank credit agreement in December 2000 partly because of the falling euro, a Deal Pipeline article shows.

A 1999 refinancing had allowed Dade to repurchase $420 million of its stock from management and its largest shareholders, Bain Capital and GS Capital. The buyback was financed with $456 million in additional senior debt, though, and by late 1999, the company's debt had reached $1.5 billion.

Unlike with GST, however, the company's story has a happy ending for almost all. (Regional department store retailer Stage Stores also reorganized and operated 834 stores as of July 28, up from 342 at the time of its June 1, 2000, petition.)

During the bankruptcy proceedings, there were no layoffs, and the business remained strong, the Romney site said.

Dade's plan took effect on Oct. 3, 2002, converting the company's outstanding $678.2 million in debt into equity.

According to The Deal Pipeline and Securities and Exchange Commission filings, German energy, healthcare and infrastructure giant Siemens AG ultimately purchased Dade Behring in a $77 per share deal valued at $7 billion on Nov. 6, 2007.

Bain gave up "huge value," the source says, because of the timing of the case and market conditions.

John C. La Liberte of Sherin and Lodgen LLP, who was not involved in any of the Bain bankruptcies but concentrates on business- and bankruptcy-related litigation, says the presence -- or lack -- of some form of fraudulent conveyance lawsuit hints at the appropriateness of a debt investment. The lack of a suit "tells me that there was nothing improper in terms of how things were conducted," he says.

According to The Deal Pipeline, creditors of Dade Behring did assert the 1999 stock purchase was a fraudulent conveyance. The outcome of the claim was unclear. Unsecured creditors of bankrupt KB Toys Inc. also alleged a $121 million stock buyback in April 2002, funded by cash on hand and new borrowings, amounted to a fraudulent conveyance to majority owner Bain Capital and others. The case was settled.

Still, allegations and truth are two different things.

La Liberte -- a Boston attorney and admitted Romney supporter -- points out that some businesses either have a broken business model or are not run efficiently and then seek the assistance of bankruptcy court, actions not necessarily attributable to Bain's actions.