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Former Bed Bath & Beyond CEO Mark Tritton sued the company on Friday, accusing the struggling retailer of cutting off bi-monthly payment of his $6.76 million <\/strong>severance agreement in January.<\/span><\/span><\/span><\/span><\/span><\/p>\n In a 13-page complaint filed with the Supreme Court of the State of New York, Tritton accuses the company of breach of contract for failing to continue the payments following his departure from the company on June 23, 2022.<\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n According to the court document, Bed Bath & Beyond\u2019s chief legal officer, David Kastin, acknowledged the company stopped paying Tritton in order to preserve its cash reserves. Bed Bath & Beyond has struggled in recent months to avoid bankruptcy, warning just last week that it could not rule out needing bankruptcy protection if its latest attempt to raise $300 million\u00a0in the stock market fails.<\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n In discussions between Kastin, Tritton and his legal counsel, the company \u201cconceded Tritton was (and is) entitled to those payments and that Tritton complied with all requirements and\/or conditions,\u201d that would entitle him to his severance payments, the court complaint says.<\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n And instead of resuming the agreed-upon payments, Tritton says the company offered in \u201cbad faith\u201d to buy out his severance \u201cfor a sum lower than the contractually agreed amount \u2014 if the company\u2019s performance improves,\u201d despite the resumption of severance payments to some employees.<\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n Tritton says he made a final attempt to resolve the dispute by sending a March 13 letter to the company demanding the past due severance payments after the retailer announced that it had received further funding. However, the company didn’t respond, according to court documents.<\/p>\n In a statement to Retail Dive regarding the lawsuit, Bed Bath & Beyond said, \u201cAs is our practice, we do not comment on legal matters.\u201d<\/p>\n Tritton\u2019s attorneys didn\u2019t immediately respond to Retail Dive\u2019s request for further comment.<\/p>\n Tritton began serving as Bed Bath & Beyond\u2019s CEO in November 2019, following his time at Target where he successfully re-envisioned its private label strategy.\u00a0Under the employment contract with the company, Tritton agreed to serve as the company\u2019s president and CEO for three years, with an automatic one-year extension unless either party terminated the agreement in writing.<\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n Tritton received an annual base salary of $1.2 million. At the time of his departure, Tritton said in court documents that the total severance payment was based on two times the sum of his annual salary ($1.2 million) and a full target annual bonus for the 2022 fiscal year ($2.2 million) less any withholdings and deductions. The payments were due on the company\u2019s regular payroll schedule.\u00a0<\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n Tritton\u2019s lawsuit requests unspecified damages and attorney\u2019s fees.<\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n Tritton\u2019s allegation that the company simply stopped paying him when cash ran low is yet another apparent setback for the New Jersey-based company. Bed Bath & Beyond\u2019s troubles have accelerated in the last year, Cristina Fern\u00e1ndez, managing director and senior research analyst with Telsey Advisory Group, told Retail Dive in an email.<\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n \u201cThe company\u2019s performance peaked in 2011 and weakened in the following years mostly due to increased competition and price transparency as players like Amazon became big, a failure to invest in digital\/technology\/supply chain as consumers moved to shopping online, and a reliance on promotions\/coupons,\u201d Fern\u00e1ndez said.<\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n \u201cThe weakness was exacerbated by the shift to private label under CEO Mark Tritton as the product did not resonate well with the consumer nor brought new customers to the brand. We do not feel the strategy to add private labels was wrong as many companies have success in this area, but the execution was poor.\u201d<\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n One reason, Fern\u00e1ndez explained is that \u201cBed Bath did not properly test and develop the lines and the product was not that exciting or differentiated. Also, the company took away many national brands that consumers loved.\u201d Fern\u00e1ndez also said the company \u201cmade the mistake\u201d of spending about $1 billion in share repurchases in 2019 and 2020 before completing a turnaround and before making investments in technology and supply chain.<\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n Fernandez also described the company\u2019s approach to raising cash as unusual but said their efforts have bought them time. \u201cIf Bed Bath were to file for bankruptcy it would need to find a buyer or get a cash infusion to restructure under Chapter 11. Given it hasn\u2019t been able to find a buyer, there is a high chance that if they file for bankruptcy the company is liquidated.\u201d<\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n<\/p><\/div>\n