By March 1992 — barely nine months after the initial restructuring — Romney was hitting up the government and Bain's other creditors for a bailout, asking that the firm be allowed to repay its debts at just 35 cents on the dollar.
Why didn't Bain's creditors just push the firm into bankruptcy and divvy up its assets? After all, the firm was flush with borrowed cash following the 1991 restructuring.
The documents reveal that Romney had perverse leverage: The terms of the 1991 deal gave Bain the authority to reward its executives with massive bonuses, regardless of performance. If creditors refused to allow the firm to pay down its debt at a fraction of the legal value, in other words, Romney could begin to loot the firm's cash reserves by doling out unmerited bonus pay.