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There is or isn't money in them thar mattresses

Mon, 10/05/2009 - 12:50pm — vastleft

NYT:

How so many people could make so much money on a company that has been driven into bankruptcy is a tale of these financial times and an example of a growing phenomenon in corporate America.

You'll never guess who ends up under the bus and without anything they didn't manage to hide in their own mattresses:

The deal was a fiasco for the employees. As part of the buyout, Simmons stopped contributing to its pension plan, since the stock ownership plan shares were meant to pay for the employees’ retirements. But then the bottom fell out of the housing market and Simmons, with its large debt, stumbled. Its pensions crumbled as the value of the stock plan shares plunged.

While those employees were cranking out "no-flip" mattresses, their company was being flipped around to a dizzying list of owners. I'm sure there's a great conservative-libertarian way to blame the workers for their bad decisions in life. There usually is.

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Ponzi mattresses

By koshembos on Mon, 10/05/2009 - 1:07pm

Of course it's the workers now and in the future since Simmons was doing quite well until the leeches came is. But under the bus you also find pension funds, small investors and bigger investors who made their money the old fashioned way - produced something.

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KoshemBos

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Yours is the classic example

By CMike on Mon, 10/05/2009 - 3:10pm

Of this.

Correntewire needs a new index entry.

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Thanks CMike

By okanogen on Tue, 10/06/2009 - 1:08pm

I was going to write the same thing, here's from the extractions at LOLFed:

"Simmons says it will soon file for bankruptcy protection, as part of an agreement by its current owners to sell the company — the seventh time it has been sold in a little more than two decades — all after being owned for short periods by a parade of different investment groups, known as private equity firms, which try to buy undervalued companies, mostly with borrowed money.

For many of the company’s investors, the sale will be a disaster. Its bondholders alone stand to lose more than $575 million.

But Thomas H. Lee Partners of Boston has not only escaped unscathed, it has made a profit. The investment firm, which bought Simmons in 2003, has pocketed around $77 million in profit, even as the company’s fortunes have declined. THL collected hundreds of millions of dollars from the company in the form of special dividends. It also paid itself millions more in fees, first for buying the company, then for helping run it. Last year, the firm even gave itself a small raise."

That whole last graf is my favorite. And when I say "favorite", I mean "most bile-inducing".

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Sorry, I don't fall in love with politicians. I'm not that desperate.

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