Panel Dismisses Charges; Parallel Lawsuit Remains in Court
NEW YORK–A panel of arbitrators has deemed “unpersuasive” Interpublic’s claims that former Lowe & Partners/SMS chairman Marvin Sloves “tortiously interfered” with Lowe’s relationship with Mercedes-Benz, thereby causing the $125 million account to move to Merkley Newman Harty last year, sources said.
Lowe parent IPG had asked the panel to nullify Sloves’ consultancy contract on the grounds he entered into it fraudulently. As a result, IPG claimed that Sloves forfeited future compensation.
But the American Arbitration Association, in a decision expected to be revealed this week, found that IPG’s claims were “flatly and credibly contradicted” by the evidence, sources said. The panel considered the testimony of Sloves as well as Lowe Group chairman Frank Lowe, IPG CEO Phil Geier and former Mercedes CEO Mike Jackson, among others.
Sloves is now entitled to collect any salary and benefits owed to him, which could amount to “several million” dollars, a source said. Sloves did not return calls and his attorney, Moses Silverman, declined comment.
Still, a source who has reviewed the decision said, “It is a complete and total vindication for Marvin.” Another added, “There’s no question from the standpoint of the arbitrators that Interpublic had absolutely no case.” IPG general counsel Nick Camera declined comment.
It’s unclear how the decision will affect a parallel action in state Supreme Court here–a $25 million lawsuit IPG filed against Sloves last year. Some suggested that the suit would fall, while Camera maintained that the issues in court were “somewhat different” from those before the arbitrators.
Technically, that may be true since the suit, which alleges “breach of fiduciary duty,” is not limited to the scope of the consultancy agreement. Still, the allegations revolve around the same premise: that Sloves used his influence with Mercedes to cause the account to shift.
The parallel suit, meanwhile, remains before state Supreme Court Justice Franklin Weissberg, with an appearance scheduled for Feb. 29. K
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