Harwood Feffer LLP Announces Investigation Of Sealy Corporation
NEW YORK, Sept. 27, 2012 /PRNewswire/ -- Harwood Feffer LLP ( www.hfesq.com) is investigating potential claims against the board of directors of Sealy Corp. ("Sealy" or the "Company") (NYSE: ZZ) concerning whether the board has breached its fiduciary duties to shareholders.
On March 11, 2012, a Sealy shareholder owning approximately 14.5% of Sealy's outstanding shares sent a letter to the Company expressing concern about certain issues related to the composition and decision-making of the Company's board. Specifically, from 2004 to 2008, Sealy was controlled by its majority shareholder, Kohlberg Kravis Roberts & Co. L.P. ("KKR"). KKR no longer owns the majority of the Company but continues to be Sealy's largest shareholder owning 46% outstanding common stock. Even though KKR does not own the majority of Sealy, it is represented by 7 of the 9 Sealy directors, or 78% of the board. The remaining 53% of public shareholders have no board representation.
Sealy's KKR dominated boards have pursued a strategy whereby the Company has been overloaded with debt and has failed to adequately fund advertising initiatives for its products. As a result, since Sealy went public its common equity has lost almost 90% of its value. By contrast, the Company's competitors who spent more on advertising have seen their common equity values and market shares increase substantially. Moreover, KKR has caused Sealy to pay over $52 million since 2004 in fees for consulting services provided by KKR even though many of the consulting services are questionable, ineffective, and unnecessary.Our investigation concerns whether the Sealy board of directors has breached its fiduciary duties to shareholders, grossly mismanaged the Company, and/or committed abuses of control in connection with the foregoing. If you own Sealy shares and wish to discuss this matter with us, or have any questions concerning your rights and interests with regard to this matter, please contact:
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