Return of the native.

• Position: Employee ownership of North Carolina's largest private company Burlington Industries Inc.; includes related article on process of compiling list of largest private companies in North Carolina

Home is where the heart is - that is, unless you're talking about a business. Then it's where whoever controls the voting stock happens to be.

Take, for example, Burlington Industries, the Greensboro-based textiles giant that is making its first appearance on the North Carolina 100 at the top of the list. Though it went private in a leveraged buyout back in 1987, this is the first year it has qualified for the annual ranking of the state's largest closely held companies.

"In October of 1990, Burlington Industries management and its employees through an ESOP [employee stock ownership plan] acquired majority ownership and voting control of the company," explains Mike Henderson, a tax partner with Arthur Andersen & Co., which compiles the North Carolina 100. Management and employees now own all of the company's voting stock and 51 percent of the common stock.

"Before 1990, Burlington was controlled by out-of-state institutions.'

Though its headquarters remained in North Carolina, the real power was parked in the portfolio of Morgan Stanley & Co., the Wall Street investment bank that masterminded the $2.2 billion LBO. During the three years of Burlington's Babylonian captivity, the debt-ridden company sold off 20 of its businesses and slashed its payroll. Meanwhile, Morgan Stanley milked at least $176.6 million in fees and dividends. Not bad for a $46.3 million cash investment.

Most of the money to buy Burlington's public stock - and fend off a hostile takeover - came from a consortium led by Morgan Stanley, Bankers Trust New York Corp. and Equitable Life Assurance Society of the United States. By last fall, however, Morgan Stanley and Bankers Trust had pretty much had their fill of Burlington.

In October they traded a big chunk of their common stock - and all of their voting rights - in return for less-volatile preferred stock. The two New York institutions now own 13 percent of Burlington's common equity, down from 62 percent in 1982.

I think [Morgan Stanley and Bankers Trust] decided that they would rather be preferred stockholders and receive a guaranteed income rather than be common stockholders with no income potential," says Richard Snipes Jr., a Charlotte benefits consultant. -1 think it was a case of two banks getting nervous. ... And management saw a nice chance to get rid of two banks who won't always be looking over management's shoulder anymore."

That appears to be the company line. "Burlington now is principally owned by 26,000...