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Retailers sued for taking away Neiman Marcus chairman

Just as Burdines and Maas Brothers/Jordan Marsh were hoping their troubled parent company was back on the road to recovery in bankruptcy court, the department store chain was hit with a new multimillion-dollar legal challenge Monday. The Neiman Marcus Group Inc. filed suit in state court in Dallas on Monday claiming Federated and Allied Stores Inc. unlawfully romanced its chairman, Allen Questrom.

Chesnut Hill, Mass.-based Neiman Marcus wants $7-million in actual damages plus $12-million in punitive damages for what it called "tortious interference in enticing" its top executive to bolt a three-year employment contract.

"He is one of the top executives in retailing today," said Neiman Marcus spokesman Peter Farwell. "Although we have replaced him, we were severely damaged by his leaving."

Federated won Questrom with a $2-million bonus plus a salary of $2-million a year. Altogether it's a $12-million, five-year package.

Questrom insists it wasn't the money that pulled him into Federated's arms. Rather, he was drawn by the challenge of what many think is the most difficult situation in American retailing.

"It's like my wife says: I'm basically a masochist," said Questrom in explaining to the Miami Herald why he took the offer. "When things are going well, I become cranky and I eat too much."

But to accept the challenge Questrom had to extract himself from an employment contract with Neiman Marcus that doesn't end until September 1991. Neiman was paying Questrom $750,000 a year plus a minimum performance bonus of $150,000.

The suit names both Federated and Allied as defendants, but not Campeau Corp., whose chairman, Robert Campeau, was forced to give up the chairmanship after the two retail chains sought protection from creditors in U.S. Bankruptcy Court in January.

Also named in the suit is Olympia & York Ltd., the Toronto-based real estate giant controlled by the Reichmann family. Olympia & York fronted Federated and Allied $250-million in loans last fall to keep Christmas goods flowing into the chains' 258 department stores.

Olympia & York allegedly agreed at one point in the quest for Questrom to put up $7-million to protect his income should Neiman Marcus learn of his secret negotiations with Federated, according to the lawsuit.