Visteon Case Headed to Arbitration
Thursday, August, 25, 2016
Former CEO of Visteon Corp, Tim Leuliette seems to have won an early litigation round with Visteon, following the decision by a US District Judge in Detroit to temporarily halt the company’s lawsuit against Leuliette regarding severance pay worth $40 million. The judge denied the company’s request for an injunction that would block an arbitration hearing required under the former CEO’s employment contract. However, the judge also denied Leuliette’s motion to dismiss the case entirely and he left some issues open for reconsideration after arbitration is complete.
Leuliette has been retired from the company since June 2015. The retirement came following a $3.6 billion deal to sell 70 percent in Halla Visteon Climate Control to Seoul, South Korea-based Hankook Tire Co. Leuliette initiation arbitration against his former employer because of his severance packaged. Arbitration efforts began in February 2016 and Visteon responded by filing a federal lawsuit against Leuliette in March. Leuliette contends his leaving was covered under a “change in control” provision in his employment contract that would have been worth up to $48 million. It stated that he should receive a separate package for involuntary termination worth more than $5 million. The difference between the two packages is $40 million in accelerated stock awards.
The judge asked he be updated on the status of arbitration in six months and will revisit the case to determine if any issues within the lawsuit are viable once the stay has ended. There are no plans by either party to appeal the judge’s recent decision, so arbitration should begin shortly.