Last week, following the replacement of the management team at New York & Co. (NYSE:NWY) subsidiary JasmineSola, I wondered whether the folks running the parent company might have trouble playing nice with others. Further details in the case of the litigation with Luciano Manganella indicate that it's the Jasmine founder who had the problems.

A complaint filed in the U.S. District Court for the district of Massachusetts lays out the entire sordid affair. The "litigation" hinted at in New York & Co.'s press release last week takes the form of a request for an injunction to keep $7 million of Sola's purchase price from reaching Manganella. That $7 million currently rests in an escrow account, and payment was contingent upon Manganella's continuing as president of JasmineSola for three years, and that he commit no "major employment breaches."

To make a short story of a longer, more sordid, tale, Manganella was fired by New York & Co. on June 22 for cause, that being that he had committed more than one violation of the firm's codes of conduct. An independent investigation commissioned by New York & Co. found that he had made lewd remarks to several employees, as well as unwelcome sexual advances. Additionally, "scores" of sexually graphic images were found on Jasmine computers used by him, along with threats to punish employees who would have reported the conduct.

Finally, New York & Co. learned that there were at least two previous legal proceedings alleging sexual harassment against Manganella, from 1999 and 2003.

In other words, New York & Co. seems to have done the right thing by giving Manganella the heave-ho, no matter what his talents for managing his business may have been. But on the other hand.

This shareholder can't help but wonder how New York & Co. could have been entirely unaware of this situation before the purchase. It's one thing to miss such vital information if you're handing a guy cash, taking the keys to the shop, and waving bye-bye. But if you're planning for a long and mutually profitable relationship, you ought to know more.

Finally, I still think this speaks ill of management's capacity for shareholder communications. A simple explanation that Manganella had been terminated "for cause" would have been a lot more informative and confidence-inspiring than the poorly-parsed explanation in the latest press release, which amounted to "we replaced his wife, and him, and by the way we're in litigation."

New York & Co. shareholders already have a tough time watching the firm's sales and share price wither while Chico's FAS (NYSE:CHS), Ann Taylor (NYSE:ANN), and bebe (NASDAQ:BEBE) roll along. Here's hoping management is tight-lipped because it's working on the next great fashion coup.

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At the time of publication, Seth Jayson had shares of New York & Co. View his stock holdings and Fool profile here . Fool rules are here .