By Jonathan Stempel
NEW YORK (Reuters) – Bed Bath & Beyond Inc was sued on Friday by Mark Tritton, who was ousted last June as chief executive of the troubled home goods retailer, in a complaint accusing the company of failing to honor his $6,765,000 severance agreement.
According to the complaint filed in a New York state court in Manhattan, Tritton said Bed Bath & Beyond stopped making required bi-monthly payments in January, with its chief legal officer citing the need to preserve cash as the sole reason.
In those discussions, Bed Bath & Beyond “conceded Tritton was (and is) entitled” to severance payments, under his agreement dated four days after he was replaced as chief executive, the complaint said.
Tritton also accused the company of “bad faith” for proposing a “buyout” of his severance at a discount but only if performance improves, even as it has resumed paying severance to some former employees.
Bed Bath & Beyond did not immediately respond to requests for comment after business hours. Tritton’s lawyers did not immediately respond to similar requests.
The Union, New Jersey-based company is trying to turn around its business after taking on too much debt, being slow to embrace online sales and alienating consumers by de-emphasizing brand-name products.
Bed Bath & Beyond is closing hundreds of stores, and on Thursday announced plans to sell up to $300 million of stock.
It also estimated that sales in stores open at least one year fell 40% to 50% in the quarter ending Feb. 25, and again warned that bankruptcy was possible if its turnaround failed.
Shares of Bed Bath & Beyond closed down 16.6 cents at a record closing low of 42.7 cents on Friday.
The company is one of several “meme” stocks, and its shares traded at $30 as recently as last August.
(Reporting by Jonathan Stempel in New York; Editing by Will Dunham)
