Casten hit again on business deal
Wednesday, Sep 26, 2018 - Posted by Rich Miller
* Greg Hinz…
Democratic congressional candidate Sean Casten has been less than fully candid about a soured business deal that apparently left dozens of investors suffering millions of dollars in losses, financial records made available to Crain’s suggest.
Letters to shareholders sent by the Casten-headed Recycled Energy Development in late 2016 indicate that while preferred interest holders in the LLC would get their principal back with 15 percent annual interest when the sale of the company closed, common interest holders would get little if any return on their investment.
In fact, the roughly three dozen common interest holders in the company lost their entire stake, according to individuals close to the privately held firm. That differs from what Casten strongly implied in an earlier blog post and statement in response to inquiries about the company.
* Roskam campaign…
While “successful entrepreneur” Sean Casten has denied his investors’ lawsuit against him citing business mismanagement and breach of fiduciary duty, Crain’s Political Reporter Greg Hinz dug deeper to find that shareholders of his failed company, Recycled Energy Development, reported the meltdown cost them millions of dollars—but while they lost it all, Casten still made millions.
Crain’s obtained financial documents and letters that show Casten wasn’t being truthful when he said the lawsuits against him were nothing more than “an attempt at a hostile takeover,” “it ended amicably,” and his investors “still made money.” […]
“Casten has been sued for mismanagement, misconduct and a breach of fiduciary duty, which he has tried to cover up repeatedly as an amicable disagreement,” said Roskam for Congress Spokesman Veronica Vera. “Amidst his energy business meltdown, Casten chose to protect himself and his money over his investors.”
- Lt Guv - Wednesday, Sep 26, 18 @ 11:23 am:
That’s gonna leave a mark.
- Precinct Captain - Wednesday, Sep 26, 18 @ 11:34 am:
You invest and sometimes you lose. That’s how business works. Of course, career politician Peter Roskam wouldn’t know that. He’s been too busy spending a lifetime on the government dole, rigging the rules in favor of the already ultra wealthy, and stifling the ability of small businesses to grow.
- Slugger O'Toole - Wednesday, Sep 26, 18 @ 11:58 am:
What PC said, adding Roskam needs to be careful here. His buddy Trump skipped on billions of dollars declaring bankruptcy six times over the years (according to a 2016 WaPo report).
- Chicagonk - Wednesday, Sep 26, 18 @ 12:00 pm:
It would be interesting to see the original prospectus sent to the common interest holders.
- Lt Guv - Wednesday, Sep 26, 18 @ 12:35 pm:
While I concur that financial investment involves various levels of risk, the way this is framed raises doubts about Casten’s veracity. However, we’ve elected Rauner & Trump. We keep getting beaten over the head with reminders that veracity doesn’t matter anymore.
- TominChicago - Wednesday, Sep 26, 18 @ 12:44 pm:
Slugger I just don’t see Casten suggesting that he and Trump have anything in common.
- SSL - Wednesday, Sep 26, 18 @ 12:48 pm:
Casten has plenty of noise around him. Does he truly believe the things he says, or is he just choosing his words poorly? Comparing an abortion to gall bladder surgery is flippant at best, and just plain ignorant otherwise. Comparing Trump to Bin Laden was another attempt to pander to a base that was misguided.
Being a bad businessman is one thing, being an unscrupulous businessman should be a concern to the voters.
We won’t know the full story before the election, but being less than candid on this large of a character issue is problematic.
- Last Bull Moose - Wednesday, Sep 26, 18 @ 2:08 pm:
Hiding facts that are in public records is never smart.
I suspect Roskam has had the details for months. His ads lacked specifics, now he can quote Crains.
- cannon649 - Wednesday, Sep 26, 18 @ 2:50 pm:
Timing is everything.
How did Casten get picked to even run?
Hiding this type of stuff should be deal breaker and party officials should know it.
- VanillaMan - Wednesday, Sep 26, 18 @ 3:14 pm:
He’s a fake.
I knew it.
He was too smooth to be believed.
Every new trend that catches on become attractive to grifters like Cassens. It takes a while for realkty to shake them out.
If this was 1850, Cassens would be peddling a miracle elixer composed of coal oil, tobacco juice, and creek water.
- HawkeyeForEver - Wednesday, Sep 26, 18 @ 4:12 pm:
I don’t know the details, but it seems like Greg Hinz is sensationalizing information that a writer for a business publication should have a better handle on.
Recycled Energy Development was a private company. People buying common shares in it should have been “accredited investors” aware of the risks. Among those risks: You are in line behind preferred shareholders and debt holders in getting paid if a company is sold. Hinz does at least acknowledge that common shareholders having “to wait at the end of a long line to try to recover their investment” is “often the case in startups.”
Hinz cites “individuals close to the privately held firm” and “sources,” but doesn’t name names. If there are disgruntled investors, why wouldn’t they go on the record?
I think Roskam and the Congressional Leadership Fund have already played out the “shady businessman” angle. This election is going to be a referendum on Trump and Roskam’s role as a House Republican leader in pushing forward the Trump agenda. I think the people of the 6th District favor Casten’s policy positions and that will be what carries the day.
- #1 anon - Wednesday, Sep 26, 18 @ 4:52 pm:
The issue is entirely Casten telling the public that the people who sued him “still made money” when, allegedly, they lost their entire investment. Maybe his puffing up his successes and downplaying his failures matters, maybe it won’t but that’s the issue. It is not that sometimes you invest and sometimes you lose.
- Barrington - Wednesday, Sep 26, 18 @ 5:35 pm:
There are just a few signs out in Barrington. They are 50/50 Casten/Roskam. That is surprising.
- HawkeyeForEver - Wednesday, Sep 26, 18 @ 9:35 pm:
#1 anon writes, “The issue is entirely Casten telling the public that the people who sued him ’still made money’ when, allegedly, they lost their entire investment.”
The court proceedings on the lawsuit indicate that the person who sued Recycled Energy Development was a preferred investor, so I would assume he did make money.