Case studies: The financial fallout of poor labor practices

The document provides case studies of Packers Sanitation (PSSI/Fortrex) and Hearthside Food Solutions to demonstrate the financial risks associated with poor labor practices. In both instances, child labor scandals and safety violations contributed to credit rating downgrades, loss of business, and eventual bankruptcy or restructuring, resulting in private equity investors losing their equity to lenders.

• Packers Sanitation (PSSI), owned by Blackstone, faced significant financial decline following a 2022 child labor scandal where over 100 children, some aged 13, were employed across eight states. This led to a $1.5 million penalty in February 2023, the loss of contracts with Cargill, Tyson Foods, and JBS, and multiple credit rating downgrades by Moody's due to labor risk and unsustainable debt.
• Despite rebranding as Fortrex in January 2025, the company experienced a 14.5 percent year-over-year revenue drop in Q2 2025. By December 2025, Fortrex completed an out-of-court restructuring where lenders took control of the equity, causing Blackstone's Core Equity Partners fund investors to lose their investment.
• Hearthside Food Solutions, acquired by Charlesbank Capital and Partners Group, exhibited a pattern of safety violations, including 20 federal safety procedure violations in five years. Following a February 2023 investigation into unlawful child labor and a $4.5 million settlement in late 2024, the company filed for bankruptcy in November 2024.
• Hearthside's bankruptcy resulted in the shedding of $1.9 billion in debt and a transfer of majority ownership to lenders, meaning investors in Charlesbank and Partners Group funds lost out. After rebranding as Maker's Pride and being acquired by Apollo and Oaktree, the company continued to face labor issues, including a September 2025 ruling requiring a new union election and the rehiring of four employees in London, KY.

APA

Private Equity Stakeholder Project (2026). Case studies: The financial fallout of poor labor practices. https://pestakeholder.org/news/case-studies-the-financial-fallout-of-poor-labor-practices/

Chicago

Private Equity Stakeholder Project. Case studies: The financial fallout of poor labor practices. 2026. https://pestakeholder.org/news/case-studies-the-financial-fallout-of-poor-labor-practices/.

Wikipedia

{{cite report |author=Private Equity Stakeholder Project |title=Case studies: The financial fallout of poor labor practices |date=5 March 2026 |url=https://pestakeholder.org/news/case-studies-the-financial-fallout-of-poor-labor-practices/ |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{privateequitystakeholderproject2026case, author = {{Private Equity Stakeholder Project}}, title = {{Case studies: The financial fallout of poor labor practices}}, institution = {Private Equity Stakeholder Project}, year = {2026}, month = mar, url = {https://pestakeholder.org/news/case-studies-the-financial-fallout-of-poor-labor-practices/}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }