Sued by Sears, Agency Files Countersuit Against Retailer
LOS ANGELES–Focus Media is expected to fight back against former client Sears, Roebuck and Co. this week, filing a cross complaint against its former flagship client with what Focus’ lawyer said will be “substantial claims against Sears and some Sears ex-
Sears summarily fired the Santa Monica, Calif., independent media agency last week and filed suit alleging breach of contract and constructive fraud, claiming the media shop was holding onto millions of dollars Sears had given it to buy media.
“Focus abused the trust and confidence of Sears by failing to pay to the Media Outlets the sums that it held on Sears’ behalf for that specific purpose,” alleges the complaint, filed in the Superior Court of the State of California in Los Angeles. Sears also contends that Focus
“continues to hold (and refuses to return) a minimum of $3,597,902 on [Sears’] behalf.”
Focus lawyer Bert Fields, an attorney with Los Angeles law firm Greenberg Glusker Fields Claman & Machtinger, characterized Sears’ claim for damages as “fairly Draconian.”
Focus president Tom Rubin declined to comment. Sears would only call its dispute with Focus an “unfortunate business situation.”
This is the same issue at the heart of Focus’ roiling dispute with two other former clients, Dreamworks SKG and Universal Studios, for whom Focus placed, but has not paid for, an estimated $3 million in media [Adweek, March 13].
The three former Focus clients represent at least $300 million in lost billings, and their departure sparked a steady exodus of staffers in the past year–as many as 100, according to some estimates. “And people are quitting as we speak,” said one source. Consequently, speculation that Focus will shut its doors has been rampant here.
Those who know Focus’ Rubin, however, are not surprised that he will fight to keep his listing agency from going under.
“He’s gonna duke it out with [Sears],” said one source. “This is no shrinking violet.”
If Focus does survive, it will likely encounter even more dramatic challenges. One media sales source said that the agency could very well be forced to do business on a “cash-on-advance” basis with the media. The source added that Focus, which has been “slow in paying its bills,” has to “rebuild its credibility in the marketplace and re-earn the trust of the media community.”
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