Mace to former CEO: Not so fast!
Glad to see Mace isn’t giving up that $4 million without a fight.
I just noticed that the company on Friday filed a motion to vacate that $4 million award to the CEO they fired:
HORSHAM, Pa.–(BUSINESS WIRE)–Mace Security International, Inc. (“MACE” or the “Company”) (NASDAQ Global: MACE) announced that it filed a motion in federal court yesterday to vacate an arbitration award entered against the Company which awarded Louis D. Paolino, Jr., the former Chairman and CEO of the Company, $4,148,912 plus attorney fees and reinstated 1,769,682 stock options held by Mr. Paolino through July 10, 2010. A panel of the American Arbitration Association entered the award on May 4, 2010 in connection with an arbitration initiated by Mr. Paolino. The arbitration panel based the award on its ruling that the Company was obligated to pay Mr. Paolino a severance payment under Mr. Paolino’s Employment Contract with the Company, due to the Company’s termination of Mr. Paolino on May 20, 2008.
The motion to vacate, which was filed in U.S. District Court, Eastern District of Pennsylvania, yesterday, contended that the award should be vacated because (1) the arbitrators exceeded their powers; (2) the arbitrators acted in manifest disregard of the law; (3) the award was procured by undue means; (4) the award is completely irrational; and, (5) the award is a product of the evident partiality of the arbitrators. Motions to vacate arbitration awards are difficult to achieve and the Company cannot predict the success of the motion to vacate, but does intend to prosecute the motion to vacate vigorously.
Dennis Raefield, the Company’s CEO and President, said: “While we continue to restructure the company to bring our overhead in line with the current level of sales, we will pursue our legal remedies with respect to the arbitration award.”
I would have liked to see Dennis give a more forceful quote, but I’m sure there are legal reasons why he can’t. If I were to guess, this is what what Dennis was thinking:
“Basically, Paolino and his buddies rigged it so that if anybody noticed that he stunk at his job, he’d get a grossly ridiculous payout, so he’d win either way. That an arbitrator can’t understand the concept that you don’t get a severance package when you do your best to run a company into the ground - well, that I just don’t get.”
Or maybe he was thinking: “Gosh, I hope the Celtics kick the crap out of the Lakers tonight.”
Hard to say, really.
Also, I really like “completely irrational” as part of a legal argument. Just wanted to put that out there.