Monday, 19 March 2018
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Leuliette wins temporary halt to Visteon lawsuit; case will go to arbitration

Leuliette contends his departure was covered by a “change in control” provision added to his employment contract.

DETROIT — Former Visteon Corp. CEO Tim Leuliette appeared to win an early round in litigation with his former employer, after U.S. District Judge Terrence Berg in Detroit agreed to temporarily halt Visteon’s lawsuit against him in a severance pay dispute that could be worth $40 million.

Berg late last week denied Visteon’s request for an injunction to block an arbitration hearing required under Leuliette’s employment contract. But he also denied Leuliette’s motion to dismiss the court case entirely, and left some matters open for reconsideration when arbitration is concluded.

Leuliette retired from Visteon in June 2015, after the company wrapped a $3.6 billion deal to sell its 70 percent stake in Halla Visteon Climate Control to Seoul, South Korea-based Hankook Tire Co. and private equity firm Hahn & Co.

Leuliette initiated arbitration against Visteon over his severance package in mid-February, and Visteon responded by bringing a federal lawsuit against him March 31. Leuliette contends his departure was covered by a “change in control” provision added to his employment contract, which could have been worth up to $48 million, according to a May 2015 proxy statement submitted to the U.S. Securities and Exchange Commission.

The proxy states that he received a separation package consistent with an involuntary termination, worth roughly $5.3 million. The major difference between the packages is $40 million in accelerated stock awards, according to the proxy statement.

Berg also instructed attorneys to update him on the status of arbitration in six months, and he will revisit whether any of the lawsuit is viable once the stay is over. Sean Crotty, an attorney for Leuliette and partner at Crotty & Schiltz LLC, declined to give details on the pay dispute but said he has no plan to appeal or challenge Berg’s order as it stands.

“From Mr. Leuliette’s public pleadings, arbitration is what he has pursued and he wants to move forward in that proceeding as expeditiously as possible,” he said.

Jeffrey Jones, an attorney for Visteon and partner at Jones Day, could not be reached for comment this week on whether the company will appeal. In its request for an injunction against the arbitration, last May, Visteon argued that some parts of the dispute either predate or are outside the scope of an arbitration agreement, and a substantial piece of it is likely to come to court anyway.

“Visteon is likely to be irreparably harmed if it is forced to proceed in an arbitration that will ultimately be rendered inappropriate, unnecessary, or without jurisdiction,” the request states.

“(But) Leuliette will suffer no harm if he is simply required to litigate these matters in the correct forum; and the public interest supports resolving these contract interpretation issues at the outset rather than requiring the parties to litigate issues in arbitration that will ultimately be rendered moot.”

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