Risk Management

Ex-Dow CFO Sues Company

Last month, the company asserted that J. Pedro Reinhard and another executive were involved in unauthorized discussions with third parties about th...
Stephen TaubMay 8, 2007

J. Pedro Reinhard — the onetime chief financial officer fired last month by Dow Chemical — has sued his former employer for libel and breach of contract.

The complaint, filed in U.S. District Court for the Southern District of New York, also names chairman and chief executive officer Andrew Liveris as a defendant. According to a press release from Reinhard, the lawsuit seeks recovery for damage to Reinhard’s reputation resulting from “false and malicious statements” by Liveris and Dow.

Reinhard is also seeking compensation and benefits that he asserts are due him but that the company has ceased to pay since April 12.

“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,” said Reinhard, in his statement. “Throughout my entire professional career at Dow, I have demonstrated the highest standards of ethics and integrity, and have acted in accordance with my fiduciary responsibilities.”

Last month, Dow fired Reinhard, who at the time was a senior advisor as well as a board member, and executive vice president Romeo Kreinberg, asserting that they were “involved in unauthorized discussions with third parties about the potential acquisition of the company.”

Britain’s Sunday Express had reported in February that a bid for Dow was in the offing; shortly before the firings, the tabloid reportedly wrote that a group of private equity firms and Middle Eastern investors were close to announcing a $50 billion buyout. Despite this and similar whispers, however, the company stated flatly at the time that it has had “no discussion about a leveraged buyout.”

In his statement Tuesday, Reinhard asserted, “I have and will continue to categorically deny that I have been part of any secret effort to take over or acquire Dow Chemical.”

The complaint seeks both compensatory and punitive damages for libel, and compensatory damages for breach of contract, amounting to no less than $75 million. “When you injure someone’s reputation and good name, the law holds you accountable,” stated Gary Naftalis, legal counsel for Reinhard, in a statement.

A phone call to Dow from CFO.com, requesting comment on Reinhard’s lawsuit, was not immediately returned.