During the Q&A of the Leaders in the Distressed Investing Arena panel, Michael Psaros of KPS Capital Partners LP made an interesting observation on the role of unionized labor in the dealmaking and turn-around process.
"Some of the deals I saw were unbelievable," he said, commenting that in their efforts to get the deals done in industries like automotive, they "just took the existing union contracts" without getting a renegotiation before the deal closed. The result being that "PE basically buried their heads in the sand" when it came to union contracts, which may come back to bite them later on as they "just gave the union a veto on your exit." In addition to all the other excesses that have to work themselves out of the system in 2008, he's hoping labor issues will as well. - George White
