The most recently ousted CEO of hapless ValueVision Media has accused Chairman John Buck of unprofessional conduct and stiffing her for $2.1 million in severance.
Rene Aiu, a veteran retail executive, spent about six months earlier this year trying to revive the long-suffering Internet and TV peddler known as "Shop NBC" before Buck fired her in August.
Aiu's breach-of-contract lawsuit is yet another ugly chapter in what may be the beginning of the end of the ValueVision story.
General Electric, the owner of NBC and ValueVision's biggest shareholder, has indicated that it may be throwing in the towel on what has become the worst-run of the broadcast retailers.
Management told investors last week that its investment banker, Piper Jaffray & Co, is proceeding with a plan that could lead to the sale or liquidation of the Eden Prairie-based company.
The company, which went public in 1994, has not been profitable for years. Shares have fallen from a high of $50 in 2000 to less than 50 cents in recent days.
"If I was a director of that company, I would be ashamed," said Carlo Cannell of Cannell Capital. His firm owns more than 5 percent of the stock, and since September Cannell has pressed Buck to sell or liquidate the company.
Craig-Hallum Inc., which researches companies for institutional clients, estimated in September "VVTV's" liquidation value at $6 per share, including $2.39 per share in cash, which the company continues to burn.
Buck dismissed Aiu after just six months and took her job, the latest of several moves amid bad performance that's been pilloried by investors and analysts who have given up on the board.
Aiu, who was hired with much fanfare in March, says in a lawsuit filed last week that Buck and the board affirmed her long-term turnaround plan and allowed her to hire several veterans of the broadcast-shopping network industry. However, Buck got upset when Aiu proposed cuts to officer and director compensation as a sign of solidarity with long-suffering shareholders, according to the suit.
A spokesman said Monday that Buck and the board would not comment on the litigation; the company has yet to file a response in Hennepin County District Court.
Aiu's suit said she and her reconstituted management team discovered that ValueVision's business among key repeat customers had been eroding for several years, but that the board was clueless. When Aiu presented her results and course of action, the suit said, Buck told her to fire the new management team. Buck fired Aiu and three other senior managers several days later.
The suit also alleges Buck intimidated employees who disagreed with him and pressured vendors for discounts, creating a culture of distrust and ill will.
"This information along with a strategic action plan to rectify the crisis was provided to the board and its response was to terminate the messengers, again ignoring its duties to shareholders," Aiu said.
Aiu's suit claims that she was fired without good reasons and denied a couple of years of severance pay.
After the firings, Deborah Fine of Fine Capital, a major ValueVision shareholder, told Buck in August: "It's a shame that you're not hiring an outside investment banker to put the company up for sale, and, frankly, that you and the board feel that you still have a right to shepherd the company forward."
During a conference call last week, Buck and other executives declined to take questions.
In October 2007, Buck fired CEO William Lansing, a former NBC Internet and Fingerhut executive, after 3 1/2 years at ValueVision.
Last week, Buck and newly hired Chief Operating Officer Keith Stewart told investors that they have a plan in place to build "sustained growth and profitability."
Buck, 57, a former Fingerhut and Honeywell executive, was paid nearly $300,000 in cash and stock in 2007 as chairman of ValueVision, according to the company's proxy statement.
Only one thing is clear about the mess at ValueVision: Executives and board members have done a lot better than the stockholders over the years.
Star Tribune staff writer Jackie Crosby contributed to this story.
Neal St. Anthony • 612-673-7144 • email@example.com