CHICAGO (CN) - Blame for a "shocking" calculation error that left Walgreen's with a $1.1 billion earnings forecast reduction was improperly laid on the CFO, he claims in court.
Wade Miquelon says he served as the chief financial officer of Walgreen Co. for six years before personal reasons caused him to step down on Aug. 4, 2014.
Miquelon left with the praise of his fellow employer, well earned as evidenced by the company's offer in April of a promotion that would put him in line to succeed Gregory Wasson as Walgreen's CEO, according to the complaint.
That fell apart on Aug. 19 when "the Wall Street Journal published an article with a headline that no CFO would ever want to see: 'Walgreen Shakeup Followed Bad Projection - CFO, Pharmacy Chief Leave After Bungled Forecast Related to Prescription Drug Business,'" according to the complaint filed Thursday in Cook County Court.
"The article contained entirely false, defamatory, disparaging and devastating statements that attacked Miquelon professionally and personally," Miquelon states. "The sources cited also were stunning: The Wall Street Journal described information received from 'investors,' who in turn cited 'Walgreen directors' and 'people familiar' with the situation, people whom Miquelon likely would have counted among his colleagues only days before."
Miquelon allegedly heard from some company officers that an internal memo by an Investor Relations director reported that Wasson had made disparaging remarks about Miquelon at a meeting.
"Miquelon immediately pressed [general counsel Thomas] Sabatino to have Walgreens publicly report the truth and se the record straight: that Miquelon had not been forced or pressured to leave and, indeed, had performed his job exceedingly well and had never 'bungled' a forecast," the complaint states (emphasis in original). "But the company refused, suggesting that response would prompt further coverage and therefore would not be in the company's best interest."
When the Wall Street Journal published another "even more defamatory article" on Sept. 30, Walgreen refused to issue a statement refuting the false information, according to the complaint.
"Together, the two Wall Street Journal articles spelled out in plain but highly inflammatory English a story of utter professional failure: that Miquelon 'bungled' the company's earnings before interest and taxes (EBIT) forecast for Fiscal Year 2016, that he was personally responsible for a 'shock[ing]' 'calculat[ion]' error that necessitated a $1.1 billion reduction in the FY 2016 EBIT goal, and that he was forced or pressured out of the company," Miquelon says. "This story is flatly contradicted by the facts."
He claims that Wasson worked with him on the forecast and was well aware that there was no calculation error. Rather, market-related issues made the company unable to meet its goal, and Miquelon says he pushed Wasson to revise the forecast.
Miquelon claims the real motivation behind the defamatory statements came from activist investors, one of whom allegedly insisted in a conference call that Miquelon increase - rather than decrease - the FY 2016 earnings forecast and recommend a tax inversion.
According to the complaint: "This investor then told Miquelon that, if Miquelon did not recommend these things, two other activist investors that he mentioned by name would 'stop at nothing to get you out of the way, including getting personal dirt on you and embarrassing you publicly. ... I wouldn't be surprised if that wheel is in motion.'
"Instead of defending Miquelon and resisting such abusive tactics, Wasson and [director Stefano] Pessina ultimately decided to disparage and defame Miquelon, as a way to deflect investor disappointment with the entirely proper decisions Miquelon advocated, i.e., to lower the FY 2016 EBIT forecast and not to re-domicile the company offshore," Miquelon says.
Miquelon claims his career has been ruined by these false accusations, and he has "no recourse other than this lawsuit."
He seeks damages for breach of contract, defamation, and tortious interference, as well as a declaration that he has the right to pursue these claims without waiving his severance benefits.
Walgreen's spokeswoman Emily Hartwig said the company doesn't comment on pending litigation.
Miquelon is represented by Nathan Noffman with Dechert LLP.