Carat, IMS in Court

Opening arguments were heard last week in Inde pendent Media Services’ lawsuit against Aegis Group’s Carat USA alleging breach of contract, misuse of trade secrets, unfair competition and illegal interference with bus iness relations. IMS is seeking $30 million in damages.

IMS filed suit in April 2001 after Carat won New Line Cinema’s $125 million media business. The suit alleges that Carat based its winning compensation proposal on information that was revealed during 1999 merger talks with IMS.

Discussions about a possible merger began because Carat wanted to pursue movie-studio business and was looking for a partner with entertainment credentials, said Abe Skoff, partner at New York law firm Moses & Singer, which is representing Carat.

During those talks, the suit alleges, IMS revealed that it was charging New Line a commission of 3.95 percent on media buying.

IMS contends that a contract signed by executives of both parties on Oct. 13, 1999, stipulated that the shops would “not solicit or engage” the other’s clients for 12 months.

“When Carat was approached by New Line within that period, they … told the studio that the contract with IMS was changed before it was signed, deleting the ‘or engage’ portion,” said Bruce Fader of Proskauer Rose, IMS’ New York law firm.

In last year’s review, Carat asked for a fee of 3 percent, said Fader.

Carat insists that New Line volunteered what it was paying on commissions, that it wanted to pay no more than 3 percent and that it was looking for an agency with greater buying clout, said Skoff.