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LVMH once said that Tiffany "stood for love" but it now describes the New York jeweller as a "mismanaged" company with "dismal" prospects.

The Louis Vuitton-owner made the claims in a countersuit against Tiffany in a dispute over a $16.2bn takeover deal.

LVMH claims Tiffany is no longer the business it agreed to buy last November before the pandemic.

But Tiffany said LVMH's "specious" arguments are "another blatant attempt" to not pay an agreed $135 a share.

The jewellery firm, immortalised in Truman Capote's novel Breakfast at Tiffany's, has already filed a lawsuit against LVMH after the French luxury goods giant said it was walking away from the deal, which was struck last November before the pandemic.

'Burning cash'

Tiffany said it wanted LVMH to complete the takeover "on the agreed terms" and said it had only experienced one thirteen-week period of losses before becoming profitable again.

"LVMH's specious arguments are yet another blatant attempt to evade its contractual obligation to pay the agreed-upon price for Tiffany," Tiffany's chairman Roger Farah said.

But in its countersuit, LVMH said Tiffany's top five executives could receive $100m in bonuses if the deal goes ahead.

"The business LVMH proposed to acquire in November 2019 - Tiffany & Co, a consistently highly-profitable luxury retail brand, no longer exists," LVMH said in a court document.

It also accused the firm of paying large dividend payments when it posted losses, taking on extra debt and "burning cash".

"Tiffany's mismanagement of its business constitutes a blatant breach of its obligation to operate in the ordinary course," it said.

"There are many examples of mismanagement detailed in the filing, including slashing capital and marketing investments and taking on additional debt."

LVMH, which is led by France's richest man, Bernard Arnault, had initially offered $120 a share for Tiffany before raising it to $135. Since then, however, Tiffany's share price has dropped and is now trading at $116.44.

Tiffany kicked off the spat when it sued LVMH for stalling earlier this month.

Questions about the impact of coronavirus - which has slammed revenue in the luxury sector and prompted a 36% drop in Tiffany sales in the first half of the year - cast doubt over the deal.