GM

Bain Capital, a hedge fund run by Romney is in the news as a company that bleeds companies dry and provides profits to the investors. A hedge fund is a pile of money provided by individuals and the purpose is to return a profit. This money is sometimes referred to as venture capital. When banks think the risk is too high, companies turn to venture capitalist to get funding to keep going. Sometimes they win and sometimes they lose. To give an idea of how it would operate in a specific case you can think of the US Government as the venture capitalist in the General Motors bailout. Here is what happened.
When GM filed bankruptcy they had 80 billion in assets and 172 billion in liabilities, so the question is who took the losses.
GM bond holders lost 27 billion
650,000 GM retirees lost part of their health care benefits
GM stockholders lost all of their equity
GM shut down 14 US plants and that involves shedding 30,000 blue collar jobs and 14,000 white collar jobs.
The union gets a ten percent ownership in the new company and agrees to pay for half of the pension cost.
2,400 of 6,000 dealerships were closed.
Sold Hummer, Saab, Saturn, Pontiac and Olds.
By the time it was all over the company was half the size it was before but it was still in business. Without venture capital the entire company would have failed.
If GM had gone through Chapter 11 bankruptcy the end result would have been similar to what we have now except the bondholders and not the union would have made out better.