DOW
Fired managers file suits for nearly USD 700m / Company also sues / "Negative body language"
Dow Chemical (Midland, Michigan / USA; www.dow.com) and the two top managers it spectacularly fired last month, Romeo Kreinberg and Pedro Reinhard, are gearing up for what could be a very costly fight – see Plasteurope.com Web of 12.04.2007. In the midst of the mud-slinging, dirty laundry is starting to be aired.
According to US reports, Kreinberg and Reinhard are suing Dow, and CEO Andrew Liveris personally, for a total of USD 675m. Kreinberg, who was vice president for performance plastics and chemicals, wants USD 600m in compensation for "defamation and wrongful termination." In a statement, he charged "malicious and irresponsible conduct" on the part of Dow and Liveris. Board director Reinhard, a long-time CFO, is seeking USD 75m for libel and breach of contract. In its own suit, Dow is attempting to recover USD 50.9m in bonuses.
Dow dismissed the executives on 12 April 2007, accusing them of violating the company's Code of Business Conduct by holding unauthorised merger talks with "third parties" about a potential acquisition of the US chemical industry's top player – possibly by Middle East interests. This followed persistent takeover rumours in the press. Both men have vehemently denied the charges.
The "New York Times" places investment bank JP Morgan Chase CEO James Dimon at the centre of the corporate thriller. It notes that the suits point to Dimon as Liveris' sole "informant." Kreinberg and Reinhard have acknowledged meeting the bankers at a meeting in Oman / United Arab Emirates, that they say was to discuss gas prices. Their version is that they were queried by JP Morgan Chase managers as to Dow's receptiveness to a buyout, but replied that they were unauthorised to discuss such a proposal. Dow, which says the firings were based on a single source with "impeccable credentials," charges that its now ex-managers scheduled the meeting.
The paper suggests that the real reason for the firings may have been more personal. Three weeks before the firings, it says, Liveris wrote a "scathing performance review" about Kreinberg, threatening him with dismissal if he did not change his "negative body language" within three months. "Frankly, your recent behaviour was the last straw and I will not allow such destructive behaviour to be repeated," the CEO is said to have told the plastics executive.
According to US reports, Kreinberg and Reinhard are suing Dow, and CEO Andrew Liveris personally, for a total of USD 675m. Kreinberg, who was vice president for performance plastics and chemicals, wants USD 600m in compensation for "defamation and wrongful termination." In a statement, he charged "malicious and irresponsible conduct" on the part of Dow and Liveris. Board director Reinhard, a long-time CFO, is seeking USD 75m for libel and breach of contract. In its own suit, Dow is attempting to recover USD 50.9m in bonuses.
Dow dismissed the executives on 12 April 2007, accusing them of violating the company's Code of Business Conduct by holding unauthorised merger talks with "third parties" about a potential acquisition of the US chemical industry's top player – possibly by Middle East interests. This followed persistent takeover rumours in the press. Both men have vehemently denied the charges.
The "New York Times" places investment bank JP Morgan Chase CEO James Dimon at the centre of the corporate thriller. It notes that the suits point to Dimon as Liveris' sole "informant." Kreinberg and Reinhard have acknowledged meeting the bankers at a meeting in Oman / United Arab Emirates, that they say was to discuss gas prices. Their version is that they were queried by JP Morgan Chase managers as to Dow's receptiveness to a buyout, but replied that they were unauthorised to discuss such a proposal. Dow, which says the firings were based on a single source with "impeccable credentials," charges that its now ex-managers scheduled the meeting.
The paper suggests that the real reason for the firings may have been more personal. Three weeks before the firings, it says, Liveris wrote a "scathing performance review" about Kreinberg, threatening him with dismissal if he did not change his "negative body language" within three months. "Frankly, your recent behaviour was the last straw and I will not allow such destructive behaviour to be repeated," the CEO is said to have told the plastics executive.
10.05.2007 Plasteurope.com [208100]
Published on 10.05.2007
German version of this article...