The man who was second in command at NorthWestern Corp. claims he was wrongfully terminated and wants the company to pay him millions.
Former president and operating officer Richard Hylland said the company owes him $25 million, plus interest, legal costs and punitive damages.
Hylland also filed civil claims against NorthWestern for defamation of character, emotional distress and interference with current or future business contracts.
He resigned as an executive in a letter dated April 28 and resigned from the board of directors May 1.
NorthWestern balked at paying Hylland's severance.
On April 30, he asked the American Arbitration Association to arbitrate his employment agreement.
Hylland is arguing that the company changed his employment agreement and must make a "golden parachute" payment.
He could not immediately be reached for comment.
NorthWestern, a South Dakota utility that provides electricity and gas to former Montana Power customers, said it is fighting Hylland's severance claims.
"We dispute his claims and we intend to vigorously defend the arbitration he has requested," spokesman Roger Schrum said.
The board appointed a special committee to study Hylland's performance. On May 6, the committee said his conduct warranted termination under his employment contract.
When Merle Lewis, NorthWestern's chief executive and board chairman, resigned in January, he received a $3.5 million "golden parachute" payment, plus other benefits like the use of a free car until 2004.
But the board balked at paying Hylland.
Hylland was an architect of a controversial private equity investment company set up in 1999.
The fund was designed to pay top executives when NorthWestern's nonutility subsidiaries made profits above the industry average.
Hylland was paid $800,000 under the partnership last year, in addition to his salary and bonuses.
Since then NorthWestern has been forced to restate earnings for the first nine months of 2002.
Instead of profits from these subsidiaries, the company reported huge losses of $892 million for 2002. The company also carries heavy debt.
On top of that, several class action lawsuits have been filed by share holders recently claiming NorthWestern misrepresented its financial condition.
Stock values have fallen dramatically from a 52-week high of $20.32 and closed Monday at $2.18.
The shakeup of executives that began in January continues.
Lewis was replaced by Gary Drook, who now is top boss at NorthWestern.
On May 7, the company named Lawrence Ramaekers to take Hylland's board position. Ramaekers is a retired president of the parent company that owns Alamo Rent-A-Car and National Car Systems.
He is considered an expert in helping troubled companies and was the first executive to receive an achievement award from the Turnaround Management Association.
On May 2, the company put John Charters on paid leave. Charters was the head of Expanets, NorthWestern's money-losing telecommunications subsidiary.
Bill Austin, the new restructuring officer at NorthWestern, took over Charters' duties.
Jan Falstad can be contacted at (406) 657-1306 or at firstname.lastname@example.org.