The comeback man
It is one thing to part company with a former executive. However, it is quite another to drag your ex-CEO through the courts on bogus charges which cannot be upheld. The privately-owned Warsteiner Brewery has done just that. For more than a year now the various court cases against its former CEO Prof. Dr. Gustavo Möller-Hergt, 46, have been widely publicised. Guess what? The nation laughed, the nation cried. Because Warsteiner has not been able to prove any of its allegations that there were some “irregularities” during Mr Möller-Hergt’s reign. In the meantime, Mr Möller-Hergt has made a comeback as a Senior Partner of the privately-owned Droege International Group AG where he runs the company’s direct investment division as Managing Director.
The first rule of business is: always settle out of courts with your former executives. World class companies or those aspiring to that status heed this rule. Does anybody remember Hugo Powell, Interbrew’s CEO who left under a bit of a cloud years ago? Or his successor John Brock? Rest assured that these gentlemen did not vacate their seat voluntarily. But did Interbrew engage them in a public spat over severance payments? No. These matters were settled quietly, out of courts. Rest assured, Interbrew paid a small fortune just to see the two men go.
In Germany, it seems, clocks are ticking differently. Or why would the owner of Warsteiner Brewery, Albert Cramer, 65, breach this rule unless he wants to prove his own self-importance to the world?
The story so far: in August 2007 Mr Möller-Hergt, who had been Warsteiner’s CEO since 2002, left the company having had fundamental disagreements with Mr Cramer. That much had been an open secret among German brewers for months. In other words, his departure had been expected. What came unexpectedly was the fact that Mr Cramer had given him a five year contract only a few months previously. What is more, Mr Cramer insisted that there had been some irregularities.
Accusing someone of having cooked the books is quite strong ammunition. Moreover, this immediately begs the questions: If Warsteiner’s internal auditors had given their consent to how things were run in Warstein over the years, why did they now reverse their judgement? Besides, why should Mr Möller-Hergt risk committing such a heinous deed given that he has to be considered a high-earner?
Mr Cramer dragged Mr Möller-Hergt to court in Argentine on claims that there were some irregularities in his running of Warsteiner’s Argentine beer and wine business. The Argentine court, however, found no such misdeeds and closed the case.
At this stage, people familiar with the situation began to wonder about Warsteiner’s legal counsel. The decision of the Argentine court should have told them to abandon their suit in the German courts. But they persevered, at Mr Cramer’s behest obviously.
Although they could not make their case at the Lower Court, they decided to appeal. The case is now at the Second Instance Court, and banking on Mr Cramer’s stubbornness, the case will be read at the Third Instance Court too.
Once the final verdict is cast, in a year’s time or so, Mr Cramer’s and Mr Möller-Hergt’s lawyers will have spent the better part of two years facing each other in court. And readers all over Germany will have been kept entertained with stories of Warsteiner’s obtuseness.
The sad thing is that Mr Cramer has better things to do than to feel vindictive. He ought to save his brewery. If estimates are to be believed, Warsteiner’s output this year is to decline 11 percent. Hopefully, Mr Cramer made enough profit last year to compensate this loss.
Otherwise, Mr Möller-Hergt’s compensation and litigation payments could be in danger – once he is awarded what is his due.
Am I being a sarky cow if I send Mr Möller-Hergt this advice: “Keep on drinking Warsteiner. You cannot afford not to.”
