Can a former employer sue me for alleged tortious conduct?

This question is hard to answer without looking at your employment agreement, if you had one, and the demand letter from the former employer. In general, an employer can sue a former employee if the employee committed some act which breaches a contract or a common law duty which the employee owed to the employer.  I don't see how they could go after your last year's pay or expense reimbursements.  Presumably you worked for them and provided them services.  They have to pay you for that and can't get your work for free by threatening you with a lawsuit. In any event, there are too many variables to say specifically what your rights or their rights are at this point.  The only way for you to have any real comfort is to go see an attorney.  If you feel you can't afford one, you might check with the Travis County Bar Association to see if they have a lawyer referral service.  Most services will let you talk to a lawyer for 30 minutes or so for a pretty small fee (usually less than $100.00).  Thereafter if you and he or she decide you have a real problem, you can discuss how much it would cost to retain that attorney to defend you. If you do get sued, do not throw the papers in the trash.  Find someone who can advise you as to how to respond.  Failure to answer a lawsuit usually results in a default judgment which can follow you the rest of your life, even if the allegations are untrue. Good luck.