Billionaire Marc Lasry, founder of Avenue Capital, sued his former employee, Gina Strum, in New York state court.
Lasry alleges Strum is attempting to extort him for $50M by threatening to spread false rumors and make things "really, really, ugly" for him and his firm.
Strum, who worked for Avenue from 2009 to 2013, had previously received a severance package and a $750,000 consulting contract.
Lasry alleges Strum's communications with him were often inappropriate and obsessive. Strum's lawyer, however, calls the lawsuit "blatantly fabricated and retaliatory".
According to the source:
When [Strum] left the firm in 2013, the lawsuit states that she was given "a severance package after she threatened to make false accusations about Avenue, and Avenue determined it was in its best interest to pay Ms. Strum — and agree to work with her in the future as a consultant if she could not find gainful employment — rather than face undue fallout from a public report of false accusations."
The lawsuit declines to say how much the package was, but Strum was later given $750,000 over two years as a part of a consulting arrangement.
What pushed Strum to ask for $50 million and threaten to "spread false and defamatory stories to destroy Mr. Lasry and Avenue and file a lawsuit" was the rejection of a business proposal Strum brought to the firm in 2023 which coincided with the last payout of the $750,000 arrangement.
"When Ms. Strum received the attention and the money she sought, she routinely complimented Plaintiffs," the suit states.
But when she "did not get her way — or when she thought she was not getting sufficient attention to advance as she had hoped — she became erratic and abusive." https://www.aol.com/billionaire-marc-lasry-claims-lawsuit-143213503.html (Oct. 22, 2024).
Commentary
According to the source, the consulting contract ended and then there was a demand for additional projects and/or money. Lasry alleges the lawsuit is extortion. Strum's side of the story is not known, but it is possible she will argue breach of the severance agreement.
In this matter, Lasry paid Strum a severance package that included an unknown payout and a consulting contract for $750,000 per year.
The severance package should have included a provision that stated the amount paid to Strum was in consideration for all wrongdoing, real or perceived, that occurred in her employment past, and that any existing employment dispute is now settled with the execution of the agreement. It is not known if such a provision was part of the severance package offered Strum.
The consulting arrangement outside the severance package is an oddity and not a best practice because it creates a new legally binding relationship with someone where the previous relationship was fractured.
In other words, the consulting arrangement allows Strum to take "another bite at the apple" not in the form of an employment claim, but in the form of a contract dispute or her treatment as a contractor. It is illegal to harass a consultant, including an ex-employee.
On the other hand, it is also illegal to threaten publication of secrets in violation of an agreement or as a means to blackmail or extort a former employer.
The final takeaway is that it is always better to make a clean break in employment matters and not allow obligations to linger and smolder.
