Posted Apr 01, 2009 11:10 am CDT
After a hostile takeover of a direct marketing firm in 2003, corporate counsel William Wachtel reportedly said in a management meeting that the best way to avoid paying severance to previous managers was to “kill them or hope they die.”
The words, arguably said in jest, have come back to haunt Wachtel, of Wachtel & Masyr in New York. The statement was introduced as evidence in a whistle-blower/defamation action and is being blamed for a February $2.1 million Hudson County, N.J., jury verdict, including $250,000 in punitive damages, the New Jersey Law Journal reports.
The case stems from the 2003 acquisition by hedge fund Chelsey Capital of Hanover Direct, a Weehawken, N.J., direct-marketing company. Wachtel was placed on the Hanover board.
According to the paper, Hanover’s former chief financial officer Charles Blue claimed Wachtel got him fired because Blue opposed a plan to deny severance to another member of old management based on trumped up “good cause” for termination, which Blue believed violated the Employee Retirement Income Security Act.
The board of directors eventually terminated Blue in 2005 based on findings of an independent investigation by Wilmer Cutler Pickering Hale & Dorr in Washington, D.C. into accounting irregularities at the company’s Roanoke, Va., distribution center.
But Blue argued that Wachtel’s statement sent a message that the new owners were not going to pay the benefits and felt so strongly about it that they might retaliate against Blue for interfering.
Wachtel last week asked that damages be reduced or a new trial be granted.