you have to wonder if he is thinking he can start a wrongful termination suit
That was my initial thought when reading your original post. I'd get some legal advice if I was you but, from what you've said, I don't think you have a lot to worry about.

My only concern would be that I'm not sure he has been subordinate. Certainly he was not turning up to work but in the UK (don't know about the US) you can't actually be sacked for that without going through a disciplinary process. And him saying that he thought you were trying to get him to quit isn't insubordination either. It's paranoid and a bit weird, certainly, but it really doesn't constitute insubordination.

I don't think you'll need to worry about that though because you're paying him three months salary which is more that he would be entitled to under a redundancy. Any tribunal is going to find, at worst, that he was unfairly dismissed but has already been fully compensated.