Dow Chemical Fight Turns Toxic

As any fired executive well knows, there's no better way to air corporate dirty laundry than by filing a lawsuit. At Dow Chemical, the soiled shirts and muddied pants are only beginning to flap in the wind.

The drama started on April 12, when Dow fired two senior executives for allegedly holding unauthorized merger talks. For months, press reports speculated that Dow was "in play," despite its repeated denials.

On Tuesday, both executives filed separate lawsuits against the company and its C.E.O., Andrew Liveris. Romeo Kreinberg, the former head of one of Dow's business units, seeks $600 million for defamation and wrongful termination. Pedro Reinhard, the company's former C.F.O., seeks a more modest $75 million in damages.

Kreinberg's lawsuit contains the juiciest bits, perhaps as a reflection of his attorney's fees should he win. Liveris saw Kreinberg as a threat, he says, and just three weeks before his termination, Liveris allegedly told him he'd fire him if he didn't adjust his "negative body language" and "attitude."

Perhaps the best part of wrongful termination suits like these is that they inevitably bring seemingly innocent outsiders into the laundry room. Enter J.P. Morgan Chase C.E.O. Jamie Dimon.

According to Kreinberg's suit, Liveris misconstrued information that Dimon gave Liveris at a dinner meeting two days before Kreinberg was fired.

Liveris wanted to know if anyone was shopping Dow around, and Dimon, according to the suit, said his bank had held informal talks with several people close to Dow, including Kreinberg.

Dimon allegedly emphasized that these people had no authority to sell the company, and he advised Liveris to inform the board, cautioning him to "not jump to any conclusions."

Two days later, Kreinberg and Reinhard were escorted out of Dow Chemical by security guards, and they haven't seen a dime since.

Dow Chemical's formal response to the lawsuits came in the form of a lawsuit of its own on Tuesday. The company is suing the former executives for breaching their fiduciary duties to Dow.

All of this legal action is not only lining the pockets of the lawyers involved, it's accomplishing the very thing Liveris wanted from the beginning: Nobody's talking about an imminent Dow takeover anymore. Go figure.

by Megan Barnett