Dow Chemical, Ex-CFO Take Each Other to Court
Federal lawsuits were filed Tuesday from both sides following Dow Chemical's decision last month to fire two top-ranking officials whom it accused of trying to secretly negotiate a leveraged buyout of the company.
In U.S. District Court in Bay City, Mich., Dow Chemical sued J. Pedro Reinhard, a senior adviser and 37-year veteran of the company who spent 10 years as its chief financial officer, and Romeo Kreinberg, a divisional executive vice president.
Dow fired the two men on April 12, only days after Dow Chemical disputed a British newspaper report saying the company was in buyout talks.
The Midland-based company accuses Reinhard and Kreinberg of breach of fiduciary duty and breach of contract, and seeks the repayment of three years of deferred stock awards and stock options worth millions of dollars. It also seeks a declaration that it is no longer contractually obligated to pay them more money.
In a lawsuit filed in U.S. District Court in New York, Reinhard alleges libel and breach of contract against his former employer and Andrew N. Liveris, Dow Chemical's chairman and chief executive. Reinhard is seeking at least $75 million in damages.
'I am deeply saddened that I have to file a lawsuit to clear my good name and restore my reputation against a company to which I devoted 37 years of loyal service,' Reinhard said in a statement.
Kreinberg earlier denied any wrongdoing. A telephone message seeking comment on Dow Chemical's suit was left at his home in Key Biscayne, Fla.
Both he and Reinhard are residents of Key Biscayne.
In its lawsuit, Dow Chemical said the day after an April 8 story in the Sunday Express saying a consortium of Middle Eastern investors and U.S. buyout firms were interested in acquiring the company, the CEO of 'a major international financial institution' and another banker had dinner with Liveris and another Dow Chemical executive.
The bank CEO said his company's London affiliate had been working on behalf of Middle Eastern investors on potential transactions involving Dow Chemical, and identified Reinhard and Kreinberg as being involved in the talks, according to the suit.
In his lawsuit, Reinhard said he was told on the evening of April 11 to report to Liveris' office the next morning. Liveris told him that he'd received information that Reinhard had been involved in discussions with banks about a Dow Chemical takeover.
Reinhard said he was given the option of resigning and when he did not, Liveris fired him.
Chris Huntley, a Dow Chemical spokesman, said Liveris fired Reinhard as a senior adviser and gave him the option of resigning from the board, which he did not do.
'I have and will continue to categorically deny that I have been part of any secret effort to take over or acquire Dow Chemical,' Reinhard said Tuesday.
'When you injure someone's reputation and good name, the law holds you accountable,' said Gary Naftalis, a New York attorney representing Reinhard.
Reinhard still is on the company's board because only shareholders, not management, can remove directors.
A vote to remove him from the panel is scheduled for Thursday's annual shareholder meeting.