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Bed Bath & Beyond is sued by ousted CEO over unpaid severance

FILE PHOTO: A person exits a Bed Bath & Beyond store in Manhattan, New York City

By Jonathan Stempel

NEW YORK (Reuters) - Bed Bath & Beyond Inc was sued on Friday by Mark Tritton, who was ousted last June as chief executive of the troubled home goods retailer, in a complaint accusing the company of failing to honor his $6,765,000 severance agreement.

According to the complaint filed in a New York state court in Manhattan, Tritton said Bed Bath & Beyond stopped making required bi-monthly payments in January, with its chief legal officer citing the need to preserve cash as the sole reason.

In those discussions, Bed Bath & Beyond "conceded Tritton was (and is) entitled" to severance payments, under his agreement dated four days after he was replaced as chief executive, the complaint said.

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Tritton also accused the company of "bad faith" for proposing a "buyout" of his severance at a discount but only if performance improves, even as it has resumed paying severance to some former employees.

Bed Bath & Beyond did not immediately respond to requests for comment after business hours. Tritton's lawyers did not immediately respond to similar requests.

The Union, New Jersey-based company is trying to turn around its business after taking on too much debt, being slow to embrace online sales and alienating consumers by de-emphasizing brand-name products.

Bed Bath & Beyond is closing hundreds of stores, and on Thursday announced plans to sell up to $300 million of stock.

It also estimated that sales in stores open at least one year fell 40% to 50% in the quarter ending Feb. 25, and again warned that bankruptcy was possible if its turnaround failed.

Shares of Bed Bath & Beyond closed down 16.6 cents at a record closing low of 42.7 cents on Friday.

The company is one of several "meme" stocks, and its shares traded at $30 as recently as last August.

(Reporting by Jonathan Stempel in New York; Editing by Will Dunham)