Ex-Foamex chairman: Why we fired the CEO

Last week I wrote about how reorganized Delco-based foam-rubber-substitute maker  FXI-Foamex Innovations hopes to merge its way to industry dominance under CEO John G. "Jack" Johnson Jr., the Philadelphia native (and Drexel grad) who ran the company until 2001, and again since 2007.

Johnson had told me he left Foamex because he and debt-fueled Foamex chairman Marshall Cogan didn't see eye-to-eye. Today I finally heard back from Cogan, a leveraged-buyout pioneer and former investment-banking partner of Citigroup founder Sandy Weill and ex-SEC chief Arthur Levitt. Cogan's version:

"Jack Johnson was fired because he did something behind the board of directors' back and negotiated the sale of the company (Foamex) to Clayton Dubelier," Cogan told me. "I asked the board to release him. Then I left the company," which Cogan said he'd created, from a Scott Paper Co. unit, "and built from $40 million to $1.2 billion." The Clayton sale was not consummated. That was in 2001.

Johnson had told me Cogan overloaded Foamex with debt, a big factor in its two bankruptcies. Cogan called Johnson an "egotist" who hadn't known enough about manufacturing, marketing, or foam: "He was the wrong person to be in charge."

I reminded Cogan that FXI-Foamex's current owners, Chris Pechock and his partners at New York buyout firm MarlinPatterson, think highly of Johnson. "I don't know those people," said Cogan. I asked if it's possible Johnson learned a lot since their falling out and Johnson's return to Foamex in 2007. "After six months after you're born, your character remains the same," Cogan told me.

"He made every wrong call he could make," he added, criticizing in particular the sale of Foamex's General Felt Industries unit. "Thank God I sold my stock" before the bankruptcies.