Bryan Lodder is suing Parkland for breach of contract. He was on a two- year contract worth pounds 304,000 a year. He is also seeking to retain share options in the company.
Mr Lodder was asked to resign as chairman and chief executive five days after the group had reported disappointing half-year results. The group turned in a loss of pounds 3.7m after exceptional items, largely restructuring costs which followed a pounds 16m investment in a new high-technology dyeing and finishing plant in Nottingham.
When Mr Lodder took over as chief executive the company was losing more than pounds 3m a year. He subsequently turned it around into profits of more than pounds 3m a year until this year's setback.
The board claimed that he had been asked to resign because "his plans for the future were unrealistic and we lost confidence in him".
However, since his departure, Parkland shares have continued to plummet, falling from a high of 187.5p in September to a close of 106.5p last night.
Institutional investors are also understood to be concerned at Mr Lodder's treatment and the lack of any obvious succession plan at Parkland.
The company is 24 per cent owned by the Hanson family, one of whom, Paul Hanson, sits on the board as deputy chairman. John Hanson was chief executive until he recruited Mr Lodder into the company, Mr Hanson then left to run Greenwoods, a chain of small menswear shops owned by his father-in- law.
The chairman of Greenwoods, a 64-year-old textiles director called John Jackson, has taken over temporarily as chief executive of Parkland.Reuse content