Nobody Is Resting Easy At Simmons

Alan L. Mundt, a former mechanic at the Simmons Co. plant in Janesville, Wis., thought he could relax with a pretty safe nest egg. When the mattress manufacturer announced in January, 1989, that it was being sold to an employee stock ownership plan, Mundt recalls, "they told us that someone earning $20,000 a year could make $100,000 on the deal in 10 years' time." Things didn't work out that way. Mundt and his fellow employees were dismayed to see the company newsletter report that their stock in Simmons plummeted from an initial value of $4.10 a share to 50~, based on the company's net worth (table). Recently, Mundt left Simmons for a better-paying job, but he still has plenty of retirement savings tied up there. And now he and Jennifer A. Florin, a Simmons quilt operator, are suing executives involved in the deal for breach of fiduciary duty.

MESSY DEAL. The suit, filed in U. S. District Court in Madison, Wis., alleges that Simmons executives overvalued the company before selling it to the ESOP. Among the defendants: former Treasury Secretary William E. Simon and Wesray Capital Corp., a well-known LBO boutique that helped engineer the ESOP. If the lawsuit gains class-action status, Simmons employees could ask that more than $100 million be returned to the ESOP.