ShopNBC’s parent company, ValueVision Media, filed a 10-Q with the Securities and Exchange Commission Monday disclosing the Dec. 1 settlement of the breach-of-contract lawsuit that Aiu filed back in Nov. 21 last year. ShopNBC will record a charge of $1,505,000 in the third quarter to pay the settlement.
According to the filing, Aiu will get gross cash payments of $875,000 for severance-pay claims; $250,000 relating to the sale of her residence; and $360,000 in attorneys’ fees. That adds up to $1,485,00 to us, not $1,505,000, but we can’t explain the small discrepancy. Maybe we did the math wrong.
Whatever. It looks like Aiu, who was hired by ShopNBC March 3, 2008, made out quite nicely. She was a veteran of HSN and something called Jupiter Shop Channel Japan when she came to ShopNBC, assigned to try to turnaround the troubled channel. That March and April, she recruited three other senior executives to create her management team. Cost for those four execs in fiscal 2008: $1.1 million.
But ShopNBC didn’t give Aiu much time to do her thing. Six months after she was hired, on Aug. 22, ShopNBC management “terminated” her and the other three new company officials. The board named chairman John Buck CEO, and hired QVC veteran Keith Stewart as president and chief operating officer.
We were working at Multichannel News and covered ShopNBC’s second-quarter conference call in August 2008, when investors ripped Buck a new one (we couldn’t write that at Multi) for firing Aiu so quickly, without giving her a chance to do her thing. In all our years of reporting, we have never heard a more hostile and bitter conference call between investors and a company.
About four months later, Aiu sued ValueVision, i.e. ShopNBC. According to the Minneapolis Star Tribune, Aiu alleged in the suit that Buck had given the OK to her turnaround plan, and to her hiring the three new execs. But Aiu charged that Buck was not a very happy camper when she suggested that compensation to ShopNBC officers and its directors be cut, “as a a sign of solidarity with long-suffering shareholders,” according to the Star Tribune.
The paper also reported that Aiu claimed that she and her new team learned that ShopNBC’s business among its best repeat customers had been eroding for years, and that the board was unaware of this looming problem.
The lawsuit alleged that when Aiu presented her findings and suggestions to Buck, her told her to can the new management team. A couple of days later, Aiu and the three senior execs she brought in were “terminated,” as they tend to say in lawsuits.
The Star Tribune said that Aiu’s suit alleged that Buck intimidated employees who disagreed with His Highness. The litigation also alleged that Buck hit vendors up for discounts.
In a nutshell, Aiu charged that she was shitcanned without good cause and that she was — how shall we say it — stiffed out of $2.1 million in severance pay, the Star Tribune reported.
Stewart was promoted to the CEO position on Jan. 27 — the day after Multichannel News pinkslipped us — and Buck went back to his old sole title of chairman.
Stewart brought in a group of fellowQVC alum, and they are actually doing a great job of mounting a turnaround at ShopNBC. The network is not out of the woods by a long shot, but Stewart has managed to diminish the flow of red ink from a river to a trickle.
Tags: 10-Q, attorneys' fees, breach of contract, CEO, chairman, chief operating officer, filing, fired, homeshoppingista, investors, John Buck, Keith Stewart, lawsuit, Minneapolis Star Tribune, Multichannel News, pinkslipped, president, QVC, Rene Aiu, SEC, settle, settlement, severance pay, shitcanned, ShopNBC, suit, ValueVision Media